Thursday, January 31, 2008
USPS Performance Indicates Rough Year Ahead
Continued volume declines could threaten CPI cap, certain services.
BY Matt Kinsman
First Class Mail volume declined in the first fiscal quarter of 2008, while Standard Mail, which typically makes up for the decline in First Class, also fell, raising a red flag of warning about the stability of the entire USPS rate structure.
First Class Mail, made up of personal letters, most bills, and Standard Mail, which includes catalogs and direct mail, combined accounts for about 94 percent of the total mail processed by the United States Postal Service. If those categories continue to decline, the billions in revenue they produce will decline too, forcing the USPS to raise rates, probably across the board, including for magazines.
Standard mail declined by 2.6 percent to 27.7 billion pieces in the first fiscal quarter of 2008, and First Class declined by 3.9 percent, to 24.4 billion pieces.
Revenue was up 3.5 percent to $20.4 billion in the first quarter and the USPS posted a profit of $672 million. However, the revenue was $500 million less than forecast for the first quarter (October through December), which is typically the best-performing financial period for the USPS because of the holidays.
"As First Class and Standard decline, together which pay for almost all of fixed costs, something will have to pay those fixed costs," says David Straus, postal counsel for American Business Media. "My guess is we'll see tension building with the CPI cap, reduced volumes and USPS cost-cutting efforts met with Congressional opposition. One of most pressing issues will be the Postal Service's efforts at reconfiguring its network, contracting out some of its labor and whether they'll be stymied by Congress or whether they can downsize. We could see a reduction of service, including cutting out some deliveries. There are all sorts of wild theories out there, like charging for home delivery."
When the USPS agreed to the CPI cap last fall, Nina Link, president and CEO of Magazine Publishers of America, said: "Having the next increase, which is likely in the spring, and all future increases under the CPI system will literally save publishers billions of dollars in postage costs in the coming years."
Wednesday, January 30, 2008
Worldwide, magazines are holding up
Forecast of 3.4 percent growth in ad spending to 2010
By Heidi Dawley
Magazine publishing in the U.S. may have become gloomy for certain categories, but worldwide it's in healthy shape, with emerging markets making up for the slowdowns in mature markets like the U.S.
And the picture for magazines worldwide looks brighter still going forward, even if they're not seeing anywhere the growth in ad revenue as the internet.
Worldwide ad spending on magazines grew 2.7 percent in 2007, and that pace is forecast to pick up to 3.4 percent a year through 2010.
Much of that growth is coming in countries like India and China.
"It is still a relatively positive outlook in the west, but much more so in the emerging markets," says Rolf Rohwer, marketing and research manager at the International Federation of the Periodical Press, which just released a new study.
But even with the growth in the developing markets, magazines are seeing their share of total media dollars shrink, and that's expected to continue, falling from 12.5 percent in 2006 to 11.4 percent by 2010, according to figures provided to IFPP by ZenithOptimedia.
But there's some consolation. Spending on magazines has kept ahead of inflation over recent years, always a welcome sign for any media. Notes Jonathan Barnard, head of publications for ZenithOptimedia: "It is rising in real terms."
Also, as Barnard further notes, magazines are doing better than newspapers worldwide, where ad spending is forecast to rise roughly 2.8 percent a year on average over the next three years.
Barnard thinks this is the case in part because the magazine experience isn't so easily replicated online. "The experience of reading a magazine is different from a newspaper. The relaxed experience people have browsing through the magazine isn't the same while you are in front of your computer console clicking away."
But magazines have also held the attention of the younger generation better than newspapers, he notes.
What's driving the growth of magazines in developing economies is the emergence of a middle class of growing affluence. They can afford magazines as they could not before, and they can afford the products advertised in them. That in turn makes magazines a more attractive medium to brand advertisers, more so than newspapers.
In China, ad spending on magazines more than doubled between 2001 and 2006, from $145 million to $375 million, and it's forecast to reach $515 million this year. Magazines have also grown their share of market, from 2.3 percent in 1995 to 3.3 percent in 2006.
In the U.S., magazines ad spending grew from $21.5 billion in 2001 to $25.2 billion in 2006 and is forecast to hit $28.3 billion in 2008, according to FIPP figures.
Monday, January 28, 2008
BoSacks Speaks Out; Someone please explain to me the difference between general publishing in the new digital world order and custom publishing. This article states that
custom publishers would rather call themselves "custom marketers." That's because what used to be custom publishing now includes word-of-mouth, the internet, e-mail newsletters, mobile alerts, deeper database crunches and complex behavioral modeling. Does that or does that not sound like a ripe formula for our traditional publishers as we head deeper and deeper into nichedom?
So I put forward the proposition that niche publishing and custom publishing - no, make that custom marketing - is the very same thing, and that a profitable rose by any other name is still and yet a profitable rose.
"There is a tide in the affairs of men, Which taken at the flood, leads on to fortune. Omitted, all the voyage of their life is bound in shallows and in miseries. On such a full sea are we now afloat. And we must take the current when it serves, or lose our ventures."
Custom Publishing Gets a Makeover
Fueled by Tech Advances, Niche Expands to Include E-Mail, Word-of-Mouth
By Nat Ives
NEW YORK (AdAge.com) -- Custom publishing, the arm of the magazine business that turns out titles such as Jeep and Departures, is being transformed as surely and swiftly as any other feature in the media landscape -- to the point that some practitioners even correct you for still calling it custom publishing.
"We would rather call it custom marketing today," said Wendy Riches, exec VP at one of the biggest custom players, Meredith Publishing Group. That's because what used to be custom publishing now includes word-of-mouth, the internet, e-mail newsletters, mobile alerts, deeper database crunches and complex behavioral modeling.
The expansion in related spending can hardly help but transform the field at the same time: Custom revenue ballooned to $37.4 billion in 2006 from $22.1 billion just two years before, according to Veronis Suhler Stevenson.
Connecting with customers
Then there's the media and marketing revolutions going on elsewhere, which have served to elevate the relationship management that is custom's key strength. "In a world of oversupply, where there's very little product differentiation in the marketplace and even some commoditization, it then becomes critical for these organizations to truly create a relationship with their existing customers," said Chris Schraft, president of Time Inc. Content Solutions.
Custom publishing and associated efforts, as a result, are marching across the magazine business. Content Solutions, whose publications include MyFord and Merrill Lynch Rewards, recently opened an interactive-specialist unit called Liquid Dialogue. Next month the Custom Publishing Council, up to 90 members from 25 when it split from the Magazine Publishers of America in 2002, will publish the second issue of Content, its own magazine.
"The core premise of why people do custom publishing hasn't changed," said Val Valente, VP-publishing director at Rodale Custom Publishing, which has produced titles for major advertisers including Bloomingdale's, Kraft Foods and Johnson & Johnson. "The desire to communicate directly with consumers, control the message, wrap the brand in an editorial context, generate loyalty, express a brand identity -- all those reasons still hold true. Custom publishing has become part of the larger concept that's out there in the market called branded content, where companies are saying, 'We need to control our message.' We're just riding that wave."
Maybe so, but the surfboards are getting pretty fancy. Meredith, for example, recently bought a database-analytics company called Directive to build out its custom abilities. "As the technology's gotten better, the costs have come down," Ms. Riches said. "We can now build enormously strong predictive models to help us. It would be who's most likely to be interested in this new car, what are the characteristics of a really high-value owner, somebody who changes their car frequently, who is loyal to a particular make of car."
Mark Stanich, chief marketing officer of American Express Publishing, said the sector could still use a higher profile. "Custom does get overlooked sometimes," he said. "But it's really cost-efficient, and it's really targeted. You know exactly who these people are, and you know they buy a lot of stuff from you. Why wouldn't you want to talk with them?"
Sunday, January 27, 2008
Print Inserts Pass TV Ads As Important Influence in Purchase Decisions
Based on research findings released by Vertis Communications, twenty-seven percent of adults indicated they look for information in advertising inserts as part of making a purchase decision. That's up from 19% ten years ago. Television advertising is no longer the main influencer in purchasing decisions, according to Vertis. TV ads are now the main influencer for 8% of consumers, compared to 22% in 1998.
Other research findings indicate that women have become more involved in the decision making process for purchasing home electronics products. In 1998 about 69% of women 18 to 24 participated in such decisions, but as of this year 91% report being part of the process, says Vertis.
The report, Vertis' Customer Focus: Decade of Data study revealed that for adult men 18 and older, TV advertising is no longer the main influencer in their purchasing decisions, down 8 percent from 1998 to 22 percent.
Advertising inserts have grown to become the most influential medium for both adult men and all adults in America. Twenty-four percent of men and 27 percent of total adults indicated they turn to this medium when making a purchasing decision, compared to just 16 percent and 19 percent, respectively, 10 years ago.
Scott Marden, director, marketing research for Vertis Communications, says " . . .Americans' use of new media, entertainment and information vehicles have become increasingly more fragmented... "
Looking deeper into the study, young adults have drifted away from personal interaction when choosing leisure activities. Since 1998, the number of young adults participating in team sports has decreased from 19 percent to 13 percent, while the amount of time spent with computers has drastically increased, from 8 percent to 21 percent in the same 10 years.
Additionally, the number of young adults going out to the movies has decreased from 13 percent in 1998 to just 3 percent in 2008, while the number of adolescents staying home to watch television or rent videos has increased from 24 in percent in 1998 to 32 percent in 2008.
Marden continued, "...tracking trends in leisure preferences and media activities arms marketers with an acute awareness of where and when this important consumer group can be reached."
The Customer Focus: Decade of Data study, which surveyed 3,000 consumers via telephone, further revealed the following:
· In 2008, 91 percent of women ages 18-24 report they are a part of the process, with cell phones, desktop computers and digital cameras being some of the most popular purchases for this age group
· 68 percent of women age 50 and older now have access to the Internet, up from 30 percent in 1998
· In the past 10 years, the percentage of women ages 25-34 who are single or living with their significant others has increased from 30 percent in 1998 to 38 percent in 2008
· In 2004, 31 percent of adults indicated they entered a store without any prior research; this number is down to 17 percent in 2008. Prior to entering a store in 2008, the study indicates approximately 57 percent of adults will look through advertising circulars, 50 percent will conduct research on the Internet, and 38 percent will utilize catalogs to retrieve additional information
· In today's current crises in the housing and gas markets, 40 percent of Americans indicated they're less likely to make purchases over $100 in the coming year, 24 percent more than after 9/11
· Adults are shifting their vacation agendas in 2008 to include fewer trips via automobile, decreasing 5 percent since 1998, while fewer adults are planning to take a vacation in 2008, down from 70 percent 10 years ago to 67 percent today.
· 40 percent in 1998 to 43 percent in the new year
BoSacks Speaks Out;
I'm not the first nor the last to say it, but as we all know, it's not the size, but the magic it performs that counts. This is as true for magazines as anything else. The discussion below of alternate, smaller-sized magazines is neither new nor all that adventurous. The magazines will work very well for some readers and not so well for others. At best they are a stop-gap performance. The sizes that are now being discussed for these travel-sized magazines are pretty much the same size as the Sony e-reader and the Amazon Kindle. So, is the magazine industry laying the ground work for size acceptance with this new introduction or is it just my imagination? OK, I guess it's just my imagination.
"An optimist will tell you the glass is half-full; the pessimist, half-empty; and the engineer will tell you the glass is twice the size it needs to be"
In men's magazines, a question of size
Britain's FHM will introduce a travel-size edition
By Heidi Dawley
In men's magazines, the eternal question is whether size does in fact matter, and in Britain, where competition among men's titles has been especially fierce, it's a question that's being asked more and more.
FHM thinks it may have the answer.
This spring, the monthly title is set to launch a smaller version that it hopes will help attract readers on the go.
This idea of what's called a travel-size edition is not new. It's been a popular tactic in the women's market for some years now. FHM will be one of the few major men's titles to give it a go.
Media buyers think it might well attract new readers. "The travel format has certainly seemed to work in the women's sector. A number of magazines have brought it out," says Steve Goodman, managing director, print trading at GroupM. "So for FHM to try it is a very sensible move."
For FHM, as well as its brethren, the last few years have not been stellar. The magazine sold an average of 311,590 copies a month in the first six months of 2007, according to ABC figures. That was down 25.9 percent on the same six months in 2006 and way down from the 750,000 copies it sold monthly not so many years ago.
Among the problems facing FHM and the other monthlies was the flush of men's weeklies launched in recent years, mostly downmarket publications. That led the monthlies to chase downmarket in an effort to hold onto their readers, and not with success. "They were tarnished with that," says Mark Gallagher, press director at Manning Gottlieb OMD.
But the monthlies have also been hurt by the internet, which comes as no surprise.
So in 2007, FHM brought in a new editor Anthony Noguera, who had been head of Emap's men's magazine portfolio, to help bolster FHM's fortunes. Noguera oversaw a redesign that came out in August.
"FHM is very different from how it was a few months ago. It is less in that downmarket sphere that it was pulled into to compete with the others," says Gallagher.
The decision to bring out a travel edition, which will be published in select markets alongside the larger edition, is likely to be another part of that effort to help create distance from the others in the market, believes Gallagher.
FHM has not yet said how big the travel edition will be. The regular edition is 12 inches by about 8 ¾ inches.
The travel edition is likely to be similar in size to other travel editions in the glossy monthly market. For instance, Glamour, the magazine credited with bringing this size to the market, is 8 ¾" tall and just over 6 ½" wide.
FHM has said that the travel edition will be a scaled-down version of the regular edition, having the same content and page layouts. It will retail for the same price as the full-size edition -- $7.60 an issue.
The travel size first really took off in Britain in 2000 when Glamour launched into the market. The magazine chose what it called the "handbag size" when it launched.
Glamour flew off the newsstands, overtaking Cosmopolitan to become the No. 1 women's glossy just about 18 months after launch.
Not surprisingly, others followed suit, launching travel editions alongside their regular-sized editions in commuter markets.
A number of publications continue to publish at least part of their circulation in this format, including Marie Claire and Elle, which implies that the publishers believe it to be successful, although it hasn't resulted in huge upward spikes in circulation.
How it does for men's titles is an open question. One title that tried it was James Brown's Jack magazine. It launched in that size, but later abandoned it and has since folded.
Thursday, January 24, 2008
A Venerable Magazine Energizes Its Web Site
By RICHARD PÉREZ-PEÑA
A year ago, The Atlantic's Web site was, to put it gently, weak - in content, staff, traffic and advertising.
Today, with big-name bloggers and video, it barely resembles the same site, having evolved into one of the livelier places on the Web for public policy debate and news analysis. And the number of readers going to the site has quadrupled.
Readership will get another boost starting Tuesday, when TheAtlantic.com will abolish the fire wall that has allowed only subscribers to the print magazine to see most of its articles online. It will make its archive accessible, too.
Executives hope that a rise in traffic brings to The Atlantic, one of the nation's oldest publications, something it hasn't had in many years: a profit.
The Web site "functioned for too long as just a marketing arm for the print magazine, rather than publication in its own right," said James Bennet, the editor in chief. For years, he said, "it was a very small number of people, working very hard, who kept it alive."
Other magazines that report on public affairs and culture, like The Economist, Harper's and The New Republic, also have fire walls; The New Yorker does not, although some articles cannot be read online.
By comparison, a year ago The Atlantic made fewer articles available to nonsubscribers and offered less Internet-only material. It had no blogs. But in February, it hired Andrew Sullivan, the iconoclastic, sometimes conservative commentator, who is one of the nation's most prominent journalists. Justin Smith, the president of Atlantic Media, estimated that the addition of Mr. Sullivan's blog accounts for 30 percent of the increased traffic.
In April, James Fallows, a national correspondent for the magazine who has a big following, moved his own blog to TheAtlantic.com. Several other bloggers, on both the political left and right, were added over the course of the year. The result has been a sort of digital conversation, with writers testing themes that later turn into long-form articles, and responding - sometimes negatively - to each other's postings and to articles in the magazine.
"A highly turbulent Web site where people are engaging in argument with each other turns out to work very well with the idea of a polished monthly magazine about the same kind of political and cultural debate," Mr. Bennet said.
The site has added video and put more articles outside the fire wall, including archival pieces by the likes of Mark Twain.
The number of visitors jumped to 308,000 last month from 72,000 in December 2006, according to comScore Media Metrix. (Like most publications, The Atlantic says the true numbers are much higher.) The print magazine sells about 400,000 copies, a figure that has more or less held steady.
Mr. Smith said The Atlantic had long done a poor job of selling ads online but is hiring more ad sellers, and Goldman Sachs will sponsor the elimination of the fire wall, buying all the ad space this week.
"The magazine is still in the red, in the $3-to-$5-million range," he said, but he hopes to be in the black in five years.
The Atlantic seems to have stabilized after a period of turmoil. The previous editor in chief, Michael Kelly, stepped down in 2002, and the owner, David G. Bradley, left the post vacant for more than three years. (Mr. Kelly was killed in Iraq in 2003 while reporting for the magazine.)
While the managing editor, Cullen Murphy, ran the magazine, it won numerous awards for excellence but circulation dropped sharply. In 2005, Mr. Bradley moved The Atlantic from Boston, where it was founded in 1857, to Washington, leading Mr. Murphy and many other staff members to leave.
For a few months, it seemed that no one was in charge, until Mr. Bennet was hired less than two years ago.
Wednesday, January 23, 2008
Because of Niches, Magazines Still Strong
By Steve Tarter, Journal Star
Jan. 20--PEORIA -- While the Internet casts a giant shadow over much of the print world, magazines remain in the sun.
Newspaper publishers fret that younger readers go online for their news, but magazines continue to command loyal audiences, many of them young.
"There are more magazines than ever before," said Samir Husni, a journalism professor at the University of Mississippi known as "Mr. Magazine" with a Web site dedicated to the subject. "There are more specialized magazines today than there were in the mid-1960s." Husni said magazines have changed, most notably with the demise of "the 800-pound gorilla," he said, referring to general-interest magazine.
Richard Stolley, formerly of Pekin, was an editor at Life when the fabled weekly folded in December, 1972.
"Everybody was devastated. Subscribers were upset. It was a grim experience," said Stolley, who started his media career as a 15-year-old sports editor for the Pekin Times in 1944.
At the time Life went under, its circulation was 8 million, Stolley said. "We picked up the Look subscriber list (after that magazine closed) but that only hastened its demise. Production costs were astronomical. We were losing money on every magazine," he said.
Other magazines have replaced old titles, but with a different approach.
"We've seen the demise of Life, Look and other general-interest magazines but since the mid-1990s, there's been a big explosion of titles on the marketplace," said Husni.
"Publishers no longer launch magazines looking for a million readers. The new face of magazines are niche titles that may never exceed 10,000 in circulation," he said.
Husni estimated only 10 percent of the magazines published today fall into the general-interest category, down from 30 percent just 20 years ago.
While niche titles proliferate the magazine industry is seeing other changes. "The big three newsweeklies -- Time, Newsweek and U.S. News & World Report -- have lost 1 million readers in combined circulation over the past 16 years," said Mark Glaser, who writes an online media column for the University of Southern California's school of journalism.
"But the magazine business as a whole remains relatively healthy because of the rise of so many niche publications and the staying power of glossy entertainment news," he said.
Magazines have met the challenge of the Internet, note observers like Ed Moran, director of product innovation at the New York-based consulting firm Deloitte & Touche USA.
"There's something very seamless and easy about reading a magazine. They're high-quality, have high-resolution images. They're easy to scroll through and they don't need an Internet connection," he said in an interview with Media Life magazine. "Online can be a pale representation and I think that's something we tend to forget." Said a report from Washington, D.C.-based Bivings Group, a firm that creates Web sites for national companies: "We can expect that the pressure on magazines to 'change their ways' is less forceful than the pressure facing newspapers.
"Many experts in the newspaper industry fear the evolution of the Internet and theorize that newspapers must either 'change or die' -- either leverage the Internet or face being replaced by it," the report said. "In contrast, it is unlikely that magazines, complete with their glossy photos, eye-catching headlines and tangible qualities could actually be replaced by the Internet." That's not to discount the impact the Internet has had on the magazine industry. Many magazines now maintain Web sites for additional communication with readers -- through forums, blogs, games and contests.
"Digital editions of magazines are more like a TV channel than a magazine. The good ones are not competition to print, just a different medium," said Husni. "The problem with many of the (magazine) Web sites I've seen is that they are one-way streets. We send readers to the Web from the print side and we never ask them to come back.
"Rather than looking at technology as a competitor, we need to look at it as an add-on." There's room for all media when the focus is on a subject people want to know about, Husni said. "Look at celebrity magazines. It's not just People. We have six different celebrity titles that are all successful because we have the Internet and TV feeding the addictiveness of the public," he said.
Being able to adapt to change is key, Husni added. "I tell people that newspapers are not dying but committing suicide because they refuse to change content," he said.
An example of how specific some magazines get is Garden and Gun, one of the hottest new magazines in 2007, Husni said on his Web site, mrmagazine.com. "What started as a celebration of the sporting life and the Southern land has evolved into a magazine full of experiences and sights and sounds that engages not only those living or intrigued by that lifestyle but also by those who appreciate the art and culture of the South," he noted.
While most young people have gravitated to the Web, some magazines still count on a youthful audience. "When reading for pleasure, boys prefer magazines over books and newspapers," said Kristen Harrison, a professor of speech communication at the University of Illinois.
Harrison, who is doing a research project with another U of I professor, Bradley Bond, said video game magazines are among the most influential with preadolescent boys. "If you look at these magazines, video game characters (displayed in magazine ads) are depicted as superheroes having bodies with oversized muscles," she said.
The U of I team concluded exposure to gaming magazines promotes a drive for muscularity in young males, a drive that might lead to steroid use.
Conversely, a thin body appears to be the model for many girls' magazines, said Harrison.
Young people remain interested in working on magazines, said Jim Burwitz, who teaches a class on magazine production at Bradley University.
"I'm pleasantly surprised how strong the interest is in four-color publications. People say it's a dying medium but it's far from its way out," said Burwitz, editor of Pathways, the alumni publication for the University of Illinois College of Medicine at Peoria.
Trade magazines like Pathways often provide jobs for those interested in the magazine field, he said.
Genevieve Diesing, a 2007 Northern Illinois University graduate who interned at the Journal Star last summer, recently was hired by a magazine in Chicago. As associate editor at the Chicago division of Schofield Media, an international publisher of trade magazines, she writes and edits copy on several different industries.
"I like what I'm doing now. It doesn't require the same passion as newspaper writing but it pays the bills and gives me experience while I try to get my foot in the door at more commercial magazines," she said.
Meanwhile, magazines continue to evolve. Two popular titles, CosmoGirl and Popular Mechanics, are slated for development as webisode projects. The online series will feature two- or three-minute episodes that will launch on the magazines' Web sites.
If successful, the Fox TV-Hearst Magazine collaboration might even be expanded to the network TV level, noted Advertising Age.
Tuesday, January 22, 2008
BoSacks Readers Speak Out: On MPA: Mags Must Adapt Or Die
Re: MPA: Mags Must Adapt Or Die
Bo- I agree this is infuriating. I have been associated with the magazine business since 1985 when PIB reports came in binders. The MPA and PIB seem to have conspired to present information that has as much believability of cold war soviet era crop reports. I remember listening to soviet reports of ever increased production of crops, shoes, autos all of which were to point to vitality while the nation crumbled from the inside. How is this different?
Submitted by a Publisher)
Re: Wrong Again: The MPA and Readers
Bo: Perhaps the MPA misunderstands their mission? Bob, you use the word entrepreneurial a lot when you speak and sometimes when you write, I was wondering if there are any people at a management level of the MPA that understands what you are talking about. Is there a single entrepreneur in their ranks? If not, WHY not?
Re: Wrong Again: The MPA and Readers
Bob, The MPA is so clueless. users? 24/7? No wonder they are losing circulation. They don't know what they are doing!
(Submitted by an Industry Supplier)
Re: BoSacks Speaks Out: I Love Printing
I think I watched it like 6 times already. That is the best!!
Submitted by a Senior paper Buyer)
This video can still be found at www.bosacks.com - look for Bo's Videos on the right side of the web page
Re: BoSacks Speaks Out: I Love Printing
Bo, that was terrific. This guy is my new hero. All our CSR's are still laughing/crying.
Another cool moment in time. The BoSacks brilliance, where you never know what Bo will find and send out to the troups. Bravo.
(Submitted by a Senior Plant Manager)
This video can still be found at www.bosacks.com - look for Bo's Videos on the right side of the web page
Re: NewPage Announces Integration Restructuring Plans
and the beat goes on. Hope the paper buyers are reading this news. No more two year guarantees will be available, let alone one year protection. More customers who have purchased their own paper will now ask the printers to get the deals because the large printers will have more purchasing power. All the rules are going to change because the candy store for paper is finally closed. Amen.
(Submitted by a Senior paper Person)
Re: NewPage Announces Integration Restructuring Plans
God I hope people read this all the way through. For those who didn't please note: "we are merging the operations in a manner that will actually increase our 2008 North American production by 3-8% compared to the combined production in 2007."
(Submitted by a Senior Paper Manager)
Re: Shelter Magazine Publishers Adjust to Changing Housing Market
I didn't read U.S. House and Garden, but it was my wife's favorite magazine, by far. Dominique Browning's editorial put H&G far ahead of the competitors. Even Conde Nasty makes mistakes, and this one was huge. Their PR hype says that while circulation and customer loyalty were strong, somehow the media types didn't think the advertisers were interested. Hmmmmm...loyal, affluent subscribers...will pay anything that circulation will charge for their subscriptions...but some idiot in the CN marketing department thinks the title is old. Well, it's gone, and nothing to be done about that. Just make sure somebody shoots the idiot. My wife called and demanded a refund of her unfulfilled subscription, and was told that she was "not the first one" to do so. If she wanted Architectural Digest, offered as a substitute, she would have ordered it. Instead, she's resigned to enjoying the UK version of House and Gardens, for which she happily pays US$130 per year...for a monthly!
(Submitted by a Senior Director of MFG and Dst)
Re: The Passion of Steve Jobs
We are Mac people, because publishing is overwhelmingly a Mac environment, and I still think Macs are less irritating than other computers. But I am very tired of hearing about Steve Jobs. I first signed a contract with a publisher over 20 years ago, and compiled an 1800-page reference book on a little Kaypro pc because it cost a fraction of what Jobs was demanding for an Apple machine. He was trying to sell hardware instead of capturing the industry with his unique operating system and its features, and he might as well have been selling washing machines. If he was as smart as he thinks he is, we never would have heard of Bill Gates.
(Submitted by a Semi-retired writer)
Re: The Passion of Steve Jobs
Steve will not make a reader but watch the iPhone to become the mobile reader and the air to become the reader for college kids. Kids love Apple and they are the future consumers who want to but all Apple products. Kids today buy a new iPod each year.
(Submitted by a Vice President of Manufacturing Operations)
Re: The Passion of Steve Jobs
But are the 40% who don't read the one's advertisers and marketers want to reach? I highly doubt it.
(Submitted by a Publisher)
Re: The Passion of Steve Jobs
I suppose I'm getting old, but I find myself wondering how bad a Depression we would have to have to put all the #$*% video games and 'reality' TV out of business. How do we know that an electronic reading platform wouldn't make some inroads? I think book design is in a bad way; I work in a big-box bookstore and I don't see that many books that make me want to pick them up and look at them . . . but I'm probably just full of hot air . . .
(Submitted by an Unknown)
Re: Reaction Intense to Magazine Cover
Dave Seanor made this error in judgment because he is from the publishing side of the industry. He thought he was supposed to provide his customers with all the noose that was fit to print. No printer would have made a similar error because we know that, when dealing with customers, no noose is good noose.
(Submitted by a Senior Printer)
Sunday, January 20, 2008
Reaction Intense to Magazine Cover
By DOUG FERGUSON http://ap.google.com/article/ALeqM5g8bZqdcoe9gLMIhLuRLdt3Bq6nOQD8U7URH00 The editor of Golfweek magazine said he was overwhelmed by negative reaction to the photo of a noose on the cover of this week's issue, illustrating a story about the suspension of a Golf Channel anchor for using the word "lynch" in an on-air discussion about how to beat Tiger Woods.
"We knew that image would grab attention, but I didn't anticipate the enormity of it," Dave Seanor, vice president and editor of the weekly magazine, said from the PGA Merchandise Show in Orlando, Fla.
"There's been a huge, negative reaction," he said. "I've gotten so many e-mails. It's a little overwhelming."
Among the critics was PGA Tour commissioner Tim Finchem, who said he found the imagery to be "outrageous and irresponsible."
"It smacks of tabloid journalism," Finchem said in a statement. "It was a naked attempt to inflame and keep alive an incident that was heading to an appropriate conclusion."
Kelly Tilghman was suspended for two weeks because of comments she made during the second round of the Mercedes-Benz Championship, when she and analyst Nick Faldo were discussing young challengers to Woods.
Faldo suggested that "to take Tiger on, maybe they should just gang up (on him) for a while."
"Lynch him in a back alley," Tilghman replied.
Tilghman said she apologized directly to the world's No. 1 player, and Woods' agent issued a statement that said it was a non-issue.
Seanor said editors at the magazine debated several choices for a cover, and he took responsibility for the noose. The title of the cover is "Caught in a Noose," with a sub-title, "Tilghman slips up, and Golf Channel can't wriggle free."
Golf Channel didn't deal with Tilghman's comments until Newsday in New York first wrote about the "lynch" reference three days after the broadcast. The suspension was announced shortly after the Rev. Al Sharpton demanded on CNN that Tilghman be fired.
"We're a weekly news magazine. The big story of the previous week was Kelly Tilghman, and that's what we chose," Seanor said. "How to illustrate that? It was tough. Do you put Kelly Tilghman out there? But was it so much about her or the uproar?
"This is emblematic of why people were so offended."
The Golfweek staff previously had scheduled a meeting with PGA Tour officials Thursday morning, and Seanor said the noose quickly became "item 1-A" on their agenda.
He said dozens of customers at the merchandise show stopped by the Golfweek stand and put an issue in their bag, with some stopping to discuss and complain.
"Most people who are objecting to it - within the golf industry - are saying this episode was just above over," Seanor said. "I think it's indicative of how, when you bring race and golf into the same sentence, everyone recoils."
Seanor said he was struck by the paucity of black customers among the thousands of people at golf's largest merchandise exposition.
"Look at the executive suites at the PGA Tour, or the USGA, or the PGA of America. There are very, very few people of color there," he said. "This is a situation in golf where there needs to be more dialogue. And when you get more dialogue, people don't want to hear it, and they brush it under the rug. This is a source of a lot of pushback."
Seanor said he expected canceled subscriptions over the issue. He was not sure how it would affect advertising. Golfweek is published by Orlando-based Turnstile Publishing Co.
Asked if he regretted the cover, Seanor paused before answering.
"I wish we could have come up with something that made the same statement but didn't create as much negative reaction," he said. "But as this has unfolded, I'm glad there's dialogue. Let's talk about this, and the lack of diversity in golf."
He denied the cover was an attempt to sell more magazines, noting that Golfweek is 99 percent subscriptions.
"I was a little shocked by the commissioner's reaction," he said. "It was rather strong, particularly from someone who rarely comments on things on his own tour."
The day after Tilghman was suspended, Finchem said it was clear the Golf Channel was "was taking this unfortunate incident very seriously."
"Over the years, many PGA Tour players and staff have had the chance to get to know Kelly," he said. "Knowing her, her comment seems to us to be very uncharacteristic and we believe it was completely inadvertent. We have no reason to believe that she was intentionally malicious in her remark."
Golfweek is one of two weekly magazines devoted entirely to golf.
Golf World, coincidentally put on its cover this week a photo of Bill Spiller, one of the black pioneers in the sport, to commemorate the 60th anniversary of his push to integrate the PGA Tour.
Golfweek Fires Editor Over 'Noose' Cover
A cover about a controversy becomes a controversy of its own.
Golfweek has fired its editor less than a week after publishing a noose on its cover.
Dave Seanor, the editor responsible for the controversial cover, has been replaced with senior writer Jeff Babineau, the magazine confirmed Friday.
The cover was an attempt to illustrate a story on the racially-insensitive remarks made by a Golf Channel announcer about Tiger Woods. The anchor, Kelly Tilghman, suggested on-air that Woods' rivals "lynch him in a back alley."
"We apologize for creating this graphic cover that received extreme negative reaction from consumers, subscribers and advertisers across the country," William P. Kupper Jr., president of Turnstile Publishing Co., the parent company of Golfweek, said in a statement . "We were trying to convey the controversial issue with a strong and provocative graphic image. It is now obvious that the overall reaction to our cover deeply offended many people. For that, we are deeply apologetic."
Seanor's firing came a day after the PGA Tour threatened to pull all of its advertising out of the magazine.
"Clearly, what Kelly said was inappropriate and unfortunate, and she obviously regrets her choice of words," PGA Tour commissioner Tim Finchem said in a statement. "But we consider Golfweek's imagery of a swinging noose on its cover to be outrageous and irresponsible. It smacks of tabloid journalism. It was a naked attempt to inflame and keep alive an incident that was heading to an appropriate conclusion."
"We know we have a job ahead of us to re-earn the trust and confidence of many loyal readers," Babineau said in a note  posted on the Golfweek Web site. "Our staff is very passionate about the game. Our wish is that one regretful error does not erase more than 30 years of service we've dedicated to this industry."
Thursday, January 17, 2008
BoSacks Speaks Out: I Love Printing
I don't care who you are or what you do for a living; if you read my column you must see this video. It is the best, the funniest, the most poignant video of the printing business that I have ever seen or thought I might see. I intend to add it to all my lectures, I will cajole all my friends to come over for cocktails and a movie, I will implore all my readers . . . yes that means you to click on the link and see this video. And I also will send to Warren, the President & CEO of Pazazz Printing, and the star of this undertaking a huge thank you note.
Wednesday, January 16, 2008
2008 Print Budget Realities
Everyone wants to know the future, particularly when it relates to love and money. While we can't help in the love department, we can do something about the money part . . . at least as it relates to the cost of printing in 2008.
We spoke with industry expert Dick Gorelick, president of Gorelick & Associates, Inc. and the Graphic Arts Sales Foundation, and asked him what he predicts for the coming year.
PS: Is it inevitable that costs will rise for printing in 2008?DG: Yes. We believe that unit costs of manufacturing and distributing print will increase at a rate exceeding that of inflation. The key to offsetting the increases will be to address both sides of the cost-benefit equation. More effective, productive use of print is the only way to offset the full effect of these increases, which really began in December 2007.
PS: How will paper prices affect print costs this year?
DG: They'll be a major contributor to increased print costs in 2008. The increases seen in 2007 will continue this year, particularly for coated publication papers.
PS: What kind of paper price increases are we talking about?
DG: It's difficult to generalize because of differences in individual stocks, grades and mills, but I expect the increase to be in the neighborhood of 25 percent for coated and 20 percent for uncoated during the course of the year. Our original projections did not include the tariffs proposed on imported coated paper from China, South Korea and Indonesia.
PS: What accounts for these increases?
DG: Paper manufacturers have closed many large mills, some permanently, in order to bring supply into balance with demand. Transportation costs are also increasing as paper production has shifted offshore due to environmental rules that have discouraged the building and upgrading of mills in the United States.
PS: What about energy costs and their impact on transportation costs? Those have to be increasing as well.
DG: Absolutely. The price of oil just hit a $100 a barrel on January 3 before backing off. Paper mills are major users of natural gas and are subject to strict environmental regulations.
But it's not just energy costs affecting increases in transportation. There's actually a major shortage of drivers in the United States. In addition, drivers are now required by new government rules to present credentials proving they're in the U.S. legally when they enter seaports and airports. Drivers are also restricted in the number of hours per day that they can drive on the road.
To make matters worse, importers are anticipating a possible labor strike at all West Coast ports and are incurring additional costs (to be passed on to you) to shift their ports of destination to the East Coast.
PS: What other costs are expected to go up?
DG: Ink will likely track with paper costs in double-digit increases. Not a major cost in printing, but no increase is welcome.
Postal rates will also increase in the last half of 2008.
While the legislation passed last year capped rate increases to the rate of inflation in the Consumer Price Index, the Postal Service signed contracts with unions that exceed the predicted rate of inflation - and labor costs are almost 80 percent of all U.S. Postal Service costs.
Given these contracts, the decline in First Class mail and an expected several billion-dollar loss for fiscal 2007, it will be tough for them to find enough worksharing incentives and efficiencies to avoid another increase.
PS: How else will mailers be affected in 2008?DG: The deliverability of mail will become increasingly important as a means of reducing costs for the Postal Service. This affects mailers not only in terms of postage costs, but bottom-line results.
Good, clean databases and mailing lists are key elements. The cost of file preparation to take full advantage of data in a marketer's house list must be calculated by each print buying organization.
The use of psychographic, or "lifestyle," mailing lists is increasing. These lists are more expensive than traditional demographic lists but, correctly selected and used, can more than pay for themselves.
Generally, the cost of mailing lists hasn't fluctuated much in the last year or two and that will continue into 2008. Many mailers can lower the bottom-line cost of list acquisition through testing, improved list hygiene and mailing and negotiation with list providers.
PS: We heard some things last year with Do-Not-Mail lists. Do you think that will come to pass in 2008?
DG: Bills were introduced in fifteen state legislatures in 2007 banning for-profit companies from sending unsolicited promotions to addressees with whom they had not had a prior business relationship. None of them passed.
Some state legislators are already preparing bills for 2008 sessions. Environmentalists and other supporters say that Do-Not-Mail legislation would force marketers to be more efficient and thereby reduce their mailing costs.
It is anticipated that some form of Do-Not-Mail legislation will be introduced in about 25 state legislatures this year.
Opponents cite First Amendment rights violations. The marketing and printing communities vigorously oppose it saying it would add to their costs and damage business development. As you might imagine, the Postal Service also opposes such legislation.
PS: This sounds pretty gloomy. Are there any positive thoughts for printing budgets in 2008?
DG: Print buying is sure to be a challenge in 2008. Increased costs for paper, ink, postage, mailing lists, etc. are difficult to fight. And unlike before, you'll not be able to offset the increases by simply changing a format or using economies of scale.
As a practical matter, I'd recommend testing before doing a mailing. You can test physical format, method of postage, the offer, kind of paper, copy on the envelope, design, etc. and it's relatively inexpensive and simple.
Testing will uncover issues that can offset additional postage and material costs.
Bottom line - both sides of the cost-benefit equation need to be looked at. It will be necessary to address the effectiveness and productivity of print, wherever possible.
Tuesday, January 15, 2008
'Esquire's' Not-So-Secret Shame
by Jeff Bercovici
There's something unseemly about the lingerie spread in the February issue of Esquire, and it has nothing to do with all the skin on display.
Four Victoria's Secret models adorn the cover in an homage to a classic Esquire photo of Angie Dickinson. Inside is a nine-page photo feature in which the models pose in various undergarments and offer "expert buying advice" for the discriminating male lingerie shopper. Their advice, of course, is to buy Victoria's Secret underwear; it's the only brand shown.
I don't know for certain that the magazine made an explicit deal to showcase only Victoria's Secret products in exchange for access to the models -- I haven't heard back yet from editor in chief David Granger -- but it seems fairly obvious that it did.
If so, so what? Lifestyle magazine cover stories are promotional almost by definition. Every time an actor or actress appears on a cover, it's because he or she has a movie, album or other project to hawk. And if that movie, album or other project didn't get mentioned in the profile, that magazine could count on an earful from the star's publicist.
And yet...this feels different, in a bad way. Partly it's because Esquire has a prouder journalistic pedigree than most other lifestyle rags (as it will be constantly reminding us in this, its 75th anniversary year). While Esquire grubs in the celebrity-access marketplace like everybody else, it frequently seems to hold its nose while doing so; its efforts to avoid being just another studio publicity tool have produced some truly tortured journalism. In lowering itself, then, Esquire has farther to fall than most.
But even more than that, it's the nakedness of this particular quid pro quo. These women were invited here to sell magazines, and they came to sell underwear. For the space of nine pages, Esquire stops being Esquire and becomes a piece of Victoria's Secret's marketing strategy, indistinguishable from the catalogs and commercials these same models appear in, wearing the very same lace demi push-up bras and come-hither expressions.
The whole thing is reminiscent of what happened in 2003, when Harper's Bazaar put Madonna, who was at that time modeling for the Gap, on the cover. Not only was she wearing Gap clothes, but the image used was an outtake from a Gap advertising shoot. Bazaar, like Esquire, is owned by Hearst Magazines; read into that what you will (and, yes, bear in mind that I work for Conde Nast, Hearst's main competitor).
I don't want to inflate the importance of the principles at stake here, or give the impression that I'm opposed to depicting hot women in their skivvies (especially in light of this). No doubt the average men's magazine reader would rather have racy pictures of Adriana Lima than honest product coverage. But why shouldn't they get both?
The Ethics of the 'SI' Swimsuit Issue
Did Sports Illustrated cut costs on its annual swimsuit issue with a journalistically shady deal? That's the implication of an item in yesterday's Cindy Adams column -- but the magazine says it's not true.
Adams claims SI got a sweetheart deal from the Israeli tourism bureau, which paid half the airfare to fly a crew of 17 to the Holy Land for a photo shoot with hot sabra Bar Rafaeli. It wouldn't be the first time the Israeli government reached out to an American magazine to promote travel; Maxim featured a "Women of the Israeli Defense Forces" spread in its July issue.
From a purist standpoint, letting a third party pick up part of the tab for a photo shoot is definitely a no-no. In its ethics guidelines, the Society of Professional Journalist warns members to "refuse gifts, favors, fees, free travel and special treatment...if they compromise journalistic integrity."
Of course, whether a photographer shooting swimsuit models is involved in a journalistic enterprise in any sense is an open question. "The whole swimsuit issue is such a shameless departure from the type of journalism SI does each week, it defies explanation and I wouldn't treat anything in the issue seriously," says Andy Schotz, chairman of SPJ's ethics committee.
"My own feeling is that it's primarily entertainment and doesn't even attempt to display integrity," says Fred Brown, vice chairman of the committee. "Other stuff, perhaps, but not integrity."
But Bob Steele, ethics group leader at the Poynter Institute, says letting a tourism bureau underwrite a swimsuit issue shoot could be the start of a "slippery slope."
"What if, instead, it had to do with the Olympic venues in China?" he asks. "What if it was a photo shoot on a college campus having to do with a new athletic arena? You can imagine the 'what ifs' that take it from something seemingly as innocuous as a swimsuit issue into a controversial sports venue where the stakes are much greater and the journalism element much clearer."
The whole issue is moot, however, according to an SI spokesman, who says Adams mischaracterized the arrangement behind the shoot. "Because it was a large group, our travel party used a corporate media rate that's standard practice for all media companies," he says. Neither the Israeli tourism office nor anyone else chipped in, he adds.
WSJ.com free? Should we?
By Marie Griffin
Is there a future for paid-subscription business news Web sites? This familiar question is being raised again as The Wall Street Journal Online, lauded as the most successful paid business media site, may be shifting soon to a completely ad-supported model.
On Dec. 13, the day News Corp. finalized its acquisition of WSJ.com parent Dow Jones & Co., Rupert Murdoch, News Corp. chairman-CEO, told Fox News Channel's Neil Cavuto: "At the moment, we sell [subscriptions to WSJ.com] to about 1 million people at a theoretical $50 a year. . . . Of that $50 million, $15 million [goes into] just getting subscribers and looking after them." By removing the subscription firewall, he said, worldwide viewership would rocket to 20 million, providing "more than enough advertising to make up the difference."
The online paid-subscription model is as uncommon in b-to-b media as it is among general business media, but Media Business reached out to three executives who oversee paid sites for their views on the paid-versus-free debate.
Prescott Shibles, VP of Penton Media's New Media Group, called WSJ.com's likely elimination of paid subscriptions "a completely horrible strategy. It's foolish to throw away subscription money, which is more or less an annuity, in favor of 100% advertising, which has huge up and down swings."
Although most of Penton's sites are advertising-based, the company has a few successful paid-subscription models. Trusts & Estates, for example, charges one subscription fee that covers 12 print issues and online access, with no free online content.
WardsAuto.com offers articles from related print publications for free and a paid subscriber-only section with extensive industry data and advanced vertical search capabilities. Supermarket News subscribers must pay for the print publication. Online, they can opt to view only free content, pay to access premium online content without the print edition or subscribe to a bundle including premium online content and the magazine.
"The hybrid model allows you to take advantage of search engine optimization and drive as much traffic as possible to the site, but you also can hold some content back for premium people," Shibles said. To give up subscription revenue, he said, is "a short-term grab as opposed to a long-term growth strategy. We want to grow our business on all fronts."
ALM publishes more than a dozen law newspapers, including The National Law Journal and regional dailies and weeklies. Print editions and their corresponding Web sites require paid subscriptions.
Alex Kamm, ALM's VP-digital strategy and business development, said, "We definitely believe strongly in subscription-based sites. We can get payment for our subscriptions online for the same reason we can in print, because we provide must-have content for a specific audience."
Although WSJ.com has an opportunity to grow its audience 10-to-20-fold by going free, "we don't have huge CPMs," Kamm said. "We reach small, targeted audiences that are important to advertisers. We want to increase our advertising revenue but not because we're trying to replace subscription revenue."
Like Kamm, Bill Scott, VP-group publisher of Jobson's Retail Optical Group, said that must-have information is crucial to the paid-subscription model.
Retail optical industry news is rarely covered by the general media, so the news provided in twice-weekly VMail Extra e-newsletters is essential. "Because VMail is viewed as need-to-have by our industry, they are willing to pay for it," Scott said.
VMail subscribers, who pay about $80 a year, also get full, unlimited access to visionmonday.com. Although there's no separate subscription for the Web site, nonsubscribers have their access limited to content from the current print issue, the multimedia section and the OptiStock financial section.
So far, price resistance hasn't been an issue, Scott said. "Two years ago we doubled the subscription price and we ended the year with about 10% more subscribers than we started with," he said. Based on that, Scott doesn't expect much change in the subscription base with the 10% price hike he's implementing this year.
Sunday, January 13, 2008
The State of b-to-b media
By Matthew Schwartz
Business media companies continue to recalibrate their brands for the Internet, where advertisers can get immediate and measurable returns on their investments. But while digital media and trade shows remain the primary growth areas for publishers, print is still the core for most b-to-b media brands.
Here are 10 key trends to watch heading into 2008, a year expected to be marked by a slowing economy and increasing pressure on companies to justify their marketing spending.
Through August (the most recent month for which figures were available), b-to-b ad pages fell 3.3% compared with the same period in 2006, according to Business Information Network data released by American Business Media. Ad revenue declined 2% during the same period. Magazine revenue is expected to drop 2% to 7% in 2008, according to ABM.
To wring more value from print, publishers are shrinking the size of their magazines and reducing their frequency. But in some cases, they're also pumping up their investment. For example, Questex Media's Travel Agent in September switched to a biweekly frequency from a weekly, while upgrading its paper quality, design and editorial content. Since the revamp, the magazine has seen a spike in advertising, both in print and online, said Questex President-CEO Kerry Gumas. "The changes could be a bellwether for b-to-b publishers in nontech markets on how to satisfy the needs of customers in a traditional print format," he said.
Coping with rising production expenses
While there has been some moderate relief in postal rates under the recently enacted Postal Accountability and Enhancement Act, the same cannot be said for paper costs. ABM President-CEO Gordon Hughes II said business publishers face a 14% annual increase in paper prices this year.
Millions of tons of capacity have been taken out of the market, said Mike Bennett, a sales executive at paper producer Bulkley Dunton Publishing Group, pointing to recent shutdowns of paper mills by UPM, Fraser and Tembec. "We're still scratching our heads," he said, referring to the closings.
With chemical and energy prices continuing to rise, paper prices may rise even higher than predicted this year.
Integrated marketing marches on
Integrated marketing is fast becoming the industry standard, as publishers strive to offer buyers what they hope is the right mix of media vehicles to help them get their messages out.
But with a squeeze on b-to-b marketing budgets expected this year, publishers will have to go the extra mile when crafting integrated marketing plans, said John French, president-CEO of Penton Media.
Penton's Registered Rep, a monthly publication aimed at independent financial brokers, offers integrated buys that include print, online and events. For its biggest customers, it can add customized research.
"It's not just selling someone pages and online space but information that can become part of the customer's overall strategy," French said, adding that in a tight economy, business publishers also have to be careful not to "unbundle" integrated packages and have the buyer pit the price of one medium against the others.
Face-to-face revenue has been growing in recent years, and ABM predicts a gain of 7% to 10% this year. Business publishers have been capitalizing on this growth in events, both in physical space and online.
One of those publishers is Canon Communications, which has 55 events targeting the advanced manufacturing sector. In particular, Canon has been out front with a co-location strategy. Last year it co-located three major shows: National Manufacturing Week, Assembly Technology Expo and Quality Expo.
Buyers "are under more pressure to justify their time and money and, by offering co-located events, you give them an itinerary of primary objectives for attending a show but also a set of secondary objectives by visiting related events under the same roof," said Charles McCurdy, CEO of Canon and Apprise Media.
Reed Exhibitions, Americas, which has more than 100 trade shows and events, launched ISC365.com last March to leverage Reed's ISC West and ISC East shows, which target security markets. The Web site includes news feeds from five publications covering security, a product database, a search engine and archives from previous ISC shows. It will soon add Web 2.0 elements. "It's not about a trade show, or online or anything else, per se," said Chet Burchett, president of the division. "It's about contacts, content and community."
Expanded Web distribution
As the Web drives business conversation and pulls in more sales prospects, publishers are changing the way their assets are distributed online.
For example, with IDG Connect, a database of 5.5 million IT professionals, IDG Communications is "able to market to individuals directly," said Bob Carrigan, president-CEO of IDG Communications. He said that through IDG Connect, the company can approach prospects "by the stuff they buy or the industry they work in."
Another trend that plays right into business publishes' strengths: content syndication. IDG recently cut a deal with widget provider Clearsping to syndicate IDG's content across a number of online networks. "We have a tremendous opportunity to get our brands in front of new users and cast a wide net, because you have to assume that not everyone is going to find your Web site," Carrigan said.
Digital revenue for b-to-b media companies is expected to grow 18% to 22% this year, according to ABM.
Online video emerges
Online video is becoming an integral part of publishers' Web sites. According to research company eMarketer, online video advertising spending in the U.S. will grow to $1.3 billion this year, up from $225 million in 2006.
There are two ends of the online video spectrum: broadcast quality and what Fritz Nelson, senior VP at CMP, calls "grainy, YouTube-ish video." Considering that the cost for broadcast-quality video can be prohibitively expensive, b-to-b media companies are going for something in between, he said.
"It's a middle ground," Nelson said, adding he anticipates that this year business publishers will lose preroll ads that are packaged with online video in favor of deploying "lower-third," text-based ads recently popularized by YouTube.
CMP's online programs range from "The Friday ITch," a humorous look at IT trends, to magazine-based shows "CRN TV" and "CIOs Uncensored."
CMP is also selectively repurposing some stories that originate in print. "Just because you run a big story doesn't mean it can lend itself to video," Nelson said. "You have to ask, `Will viewers be interested in seeing something about it?' You have to think about visuals."
Putting the brakes on M&As?
The ongoing credit crunch and mortgage mess "have filtered down into parts of the banking industry that lend directly to media companies or finance media transactions," said Richard Mead, a managing director at media investment bank Jordan, Edmiston Group. Despite the challenges, "b-to-b media deals will continue to get done" in 2008, Mead said. "It's not going to be a fallow period."
The media and information M&A market last year saw 838 transactions with a combined value of nearly $110.0 billion, up 32% and 79%, respectively, from 2006, according to a report by Jordan, Edmiston. The online media and marketing services sectors led the charge in 2007 with a combined 555 transactions valued at $43.0 billion.
Private equity companies have fueled many of the major b-to-b media transactions, such as Veronis Suhler Stevenson's acquisition last March of Advanstar Communications for $1.2 billion. However, the biggest media deal of 2007 was executed by a strategic player-News Corp.'s $5.6 billion acquisition of Dow Jones & Co.
Challenges for strategic companies
With private equity companies struggling with their exposure to the current banking woes, strategic b-to-b media companies may loom large on the M&A front this year.
Reed Business Information made a big splash in the industry in December 2006 when it acquired lead generation company BuyerZone, which links prospective buyers to qualified suppliers in more than 134 business product and service categories. The deal could be a harbinger for business publishers that want to move aggressively online.
"It brings buyers and sellers together to another level," said Tad Smith, CEO of Reed Business. "But let me tell you, there are not a lot of BuyerZones out there." He added that Reed Business continues to be an acquisitive mode. "For strategic companies, the acquisition situation has been improving the past few months, but that's offset by a more worrying economic environment, and there's still some resistance to sensible pricing," he said.
'Wonderful' time to be a small publisher
Smaller publishers face the same rising costs as large publishers but have fewer financial resources to deal with them. Gary Redmond, partner and director of publishing operations at Construction Business Media, is unbowed, though.
"It's a wonderful time to be a small publisher, with a lot of advantages if you can niche smartly," he said. Smaller publishers-those with less than $50 million in annual revenue-comprise about 55% of b-to-b media companies.
After spending 13 years at Hanley Wood and McGraw-Hill Cos., Redmond launched Construction Business Media in 2003 with one title: Architectural Products. In 2006 he added a quarterly supplement called Illuminate, and in May 2007 introduced the stand-alone Architectural SSL. The company's revenue rose 49% last year.
Redmond said smaller publishers' ability to stay nimble is particularly valuable in the current climate. "The velocity of clients' needs is accelerating, and it's incumbent upon business publishers to respond in kind," he said. "We have the ability to foster an atmosphere of creative thinking, which is more easily done in a small workplace than a big one."
Despite the ongoing weakness in the U.S. dollar, there are ample opportunities for business publishers to try and penetrate overseas markets, said Bill Baumann, group publisher at Penton Media's Electronic Design Group, which in 2006 launched Electronic Design-China and Microwaves & RF China in concert with Global Sources and CMP. IDG Corp., Hearst Business Media and Reed Business also have major stakes in China.
The emerging business class in the so-called BRIC countries (Brazil, Russia, India and China) hungers for b-to-b information and the attendant tools that business publishers can provide.
"You have to be in it for the long-haul," Baumann said, referring to investing overseas. Of course, having a legitimate Web site makes "you an international publisher by default so you know how important overseas markets can be," he said.
Thursday, January 10, 2008
Don't Call Them Readers
Posted by Matthew Nelson
Magazine publishers are pursuing 33.5 percent more online initiatives in 2007 compared to the same time last year, according to research released by the Magazine Publishers of America (MPA) today.
The trade association for the consumer magazine industry kept tabs on its members and found they had announced 207 digital initiatives compared to 155 in 2006. Those included video for Web sites, social network tools, user-generated content efforts and integrated marketing initiatives. MPA members include Businessweek, Forbes Media, Martha Stewart Living Omnimedia, Playboy, Time, Wired and a host of others.
Howard Polskin, MPA's senior vice president/communications & events, told me he started a file some year ago to save and monitor digital initiatives which grew into the results he announced today, and that the move for magazines into digital video, blog, podcasts and other content is to be expected in 2008.
"[Magazines] are using whatever platform they can to touch their. . . and I'm not going to use the word 'readers. . . to touch their users 24-7," he said. "The people that used to consume magazine content used to be readers and now there is the subtle shift that it's more important to call them users."
Life After Text-Messaging: Gen Y Loves Luxury Paper
A NEW SURVEY FROM UNITY Marketing reports that Gen Y-consumers age 25 to 35 are the biggest spenders on luxury paper and stationery. "The generational shift in the market for stationery is bringing dramatic changes in the marketplace," the report says. "Suddenly specialty retailers like Crane & Co. Paper Makers, Papyrus, Kate's Paperie and Paperchase found in Borders stores nationwide are destination shops for young people to pursue their paper passion."
Greeting cards, meanwhile, continue to skew toward older consumers, and are most frequently purchased by those age 45 and beyond. Overall, Unity estimates the annual stationery market at $37.4 billion.
Wednesday, January 09, 2008
The Boomers Get Attention and the Weak Get Culled in 2008
And It Won't Be Any Easier for the CMO
By Jonah Bloom
Here's a look at what's coming in 2008.
DARWINIAN CULLING OF TRADITIONAL MEDIA PROPERTIES
Even the quadrennial kick of Olympics and election won't be enough to hide the fact that advertisers are spending more time and money speaking directly to consumers or trying to insert themselves into word-of-mouth networks. Along with marketers' ever-increasing frustration about the opaque returns on their media investments, this shift already has caused a drop in media's share of the marketing pie and a slowdown in revenue growth. Factor in the rising cost of raw materials, particularly paper prices -- which are expected to climb 25% this year -- and the shift in major media companies' investments to the digital space, and you've got something akin to a perfect storm. Smart media owners will make the tough decision to kill off the weaklings this year -- especially as they'll know that 2009, without the prexy circus, could look even worse.
Oh, that this would be the year marketers got away from lumping us together in laughably broad age and gender groups. It won't. Sure, advertisers will get better at responding to individuals' online behavior and tackling us in our self-identified, interest-based communities, but they still want and need broader targets, which is why we'll see even more media launches in the boomer space, along with hundreds of millions more marketing dollars allocated to the demographic. A good year to be the AARP; a bad year if you don't like ads depicting handsome old folk surfing, skydiving and generally having more hair/a better time than you.
WEB 2.0 EXPLODES, IMPLODES, EXPLODES
Facebook and MySpace will have the longest lines of advertisers looking to get into their clubs in 2008. Of course, as those advertisers pay their admission fees and filter in, there'll be more Beacon-backlash-type tales and plenty of grumbling from the natives. Gated communities, with subscription or premium-service business models, will pop up offering better online living without the nasty ad riff-raff. Still, the leading social networks already have the scale to record rapid ad revenue growth this year. The question is whether they'll grow fast enough to persuade all the VCs to stand by the thousands of Web 2.0 businesses that are also seeking ads as their major source of income. They can't all be winners -- marketing money moves more slowly than venture capital, if it moves at all -- and there'll be a host of implosions. Still, as any web watcher will tell you, this ain't 2000. There are a handful of VCs and evangelists whose pride will smart a little, but no battalion of shareholders left carrying the can. If a Web 2.0 company falls down in the woods and only the VC gets hurt ...
The McKinsey Quarterly said recently: "The biggest shift in today's marketing world isn't the much-discussed declining effectiveness of TV advertising, but the changes in how consumers research and buy products." That's why today's marketing chiefs are becoming multimedia information providers, community creators, conversation facilitators, and monitors of the thousands of ways their companies interact with consumers. Today's CMOs still need instant scale in their armories -- that's why they get so excited about MySpace or Facebook and still pony up billions for broadcast -- but they need to operate simultaneously on a niche, local or even person-by-person level that recognizes that any video-phone toting Tom, Dick or Jeff Jarvis can make or break their products today.
Monday, January 07, 2008
For magazines, New Year of Challenges
Media Life Talks To Marty Walker noted magazine industry expert
By Diego Vasquez
End-of-year numbers from the Publishers Information Bureau have yet to be released, but barring a surprise bounce-back in ad pages, 2007 will end the year flat or slightly down compared with 2006, which wasn't exactly a boom year. Combine that with the large number of high-profile magazine closures and rather small number of new magazine launches, and 2007 was not a good year for the industry. The question is whether 2008 will show improvement. Many media people expect more magazine closures as the web drains off advertisers and readers. Unlike TV, newspapers and radio, magazines won't see much of the record political spending expected this year, and continued softness in the economy will hurt a number of categories. Because of that, expect to see magazines exploring other ways to make money and optimize circulation. Marty Walker, president of Walker Communications and noted magazine industry expert, talks to Media Life about the coming year. This is the first in a series of week-long 2008 previews with experts in different fields of media.
Would you characterize 2007 as a good year for magazines? Why?
No, I wouldn't characterize it as a good year. I mean, it wasn't a disaster year. Ad pages stayed around, and so did revenue, at basically flat. And there's nothing really to indicate that 2008 will be appreciably better. Magazines tend not to get a big hit from the elections, that's more regional and in newspapers.
Magazines will also suffer from a lack of real estate adverting.
What was the biggest story in magazines in 2007?
The folding of House & Garden, the folding of Teen People, the folding of Elle Girl, all magazines with what appeared to be substantial circulation.
There was also the limited number of new launches, both as a sign of the economy and the competition from the internet.
Building on that, which magazine closures echoed the loudest in 2007?
I would say House & Garden. It was the most established title to close.
Are there any categories where you see a shakeout occurring this year?
This year I can't think of one particular category.
I think we had the shakeout last year in the teen market, and that was definitely the internet, with the kids going to the social networking sites.
But the biggest challenge in the publishing industry is going to be five or 10 years down the road when the present generation of magazine readers are gone and the new generation [emerges] that grew up on the internet.
How are you going to transition them to becoming magazine readers and subscribers? That will be the biggest challenge.
What is the single most important thing for media buyers and planners to know about magazines in 2008?
Well, it's the age-old story. Buyers and planners are young people in the early parts of their careers, and they're trained to look at the numbers.
But if they're going to get their clients to stand out from the pack of their competitors, they have to start learning to look at the magazines themselves and understand the differences.
For example, Time and Newsweek have similar numbers, but they're very different magazines. They need to go beyond the numbers and know a little more about each title.
They also need to stop complaining about public-place distribution and verified distribution and understand that if they're going to demand issue-based guarantees on circulation, ultimately they're going to have to pay for the circulation that's actually delivered.
What are three trends to watch for in 2008 in magazines?
Well, the biggest trend you'll probably see is magazines trying to be more consultative sellers, and sellers that package integrated programs that go beyond just print. That will involve print, web, events and rather than just selling advertising. Smart publishers will move toward selling marketing solutions.
No. 2, publishers will be working desperately to find ways to increase web traffic and monetize their web efforts. And also, they'll experiment with different kinds of content on the web and ways of delivering their content on the web.
The third one has to do with circulation. They'll continue testing new ways of circulating magazines and testing the viability of non-paid versus paid and what have you.
What will be the single biggest change facing the industry over the next few years?
I think we'll see the demise of news- and data-based type magazines, perhaps more so in the B-to-B field than the consumer field, because the web very much is a better source of that kind of information.
There'll be an exponential growth of special interest consumer magazines, where people want to read longer articles and stuff about their passions and interests.
With news and data, it doesn't take a lot of money to generate. But when you get into serious content, then it requires more of an investment, and that's where magazines can maintain their strength.
The most recent Publishers Information Bureau numbers, for third quarter, have magazine ad pages down 1.1 percent year to date. What has been the biggest cause of this dip?
The internet and the economy.
The internet is certainly impacting on print advertising, and publishers are finding it harder and harder to sell copies on the newsstand. All of that is impacting on the rate base and the amount of advertising publishers are getting.
What categories do you see doing the best this year?
Usually, when the economy is bad or weak, the cocooning or home type magazines tend to do well. People hunker down and stay home, cut down on conspicuous consumption.
But the magazines that seem to be doing well are the ones that deal with conspicuous consumption. I think the travel magazine will suffer to some extent because of the declining value of the dollar internationally, in particular in Europe.
Do you anticipate more launches than average or fewer in 2008? Why?
Well, when you talk about launches you have to talk about it in two ways. You really have to think about what will be the important launches, and I think there will be fewer of them.
Entrepreneurs that are looking for money to launch magazines will probably have trouble, considering the economy and the volatility of the industry right now.
Diego Vasquez is a staff writer for Media Life.
Thursday, January 03, 2008
The Watchword for Media: Scarcity
A paper pinch, slower Web traffic, and striking writers make for a harsh new reality
By Jon Fine
As if media companies didn't already have enough going on, now they have something else to look forward to in 2008: scarcity.
I don't mean the "scarcity" media knew in easier times, back when owning printing presses or broadcast towers gave you a stranglehold on distribution, back when there was no newfangled noisy megaphone-the Internet-through which those whom traditionalists call "nonprofessionals" could broadcast their own media.
I'm talking about a more old-fashioned scarcity of raw materials. Magazine and newspaper publishers are already feeling the pinch of steep increases in the paper prices, a quotidian item but one that represents publishers' largest nonlabor expense. Meanwhile, the time Americans spend on the Web (another finite commodity) has actually backslid in the past few months, compared with 2006's stats, according to comScore (SCOR) data, which also shows stagnation in Web traffic growth. These scarcities differ from another one-a shortage of scripted TV shows thanks to the ongoing writer's strike-in that they look more permanent than temporary.
Bear with me while I sketch out the structural changes in the paper market. In years past, publishers bought from a wide constellation of papermakers. So it was easier to play one supplier off another to get price cuts, and thus manufacturers' attempts at price increases often did not stick.
That state of affairs is over for the foreseeable future, if not forever, thanks to a wave of mergers that reached a zenith last year with the nuptials of Bowater and Abitibi Price, the top two newsprint players in the North American market. Private equity has consolidated ownership among manufacturers of coated paper, which magazines use. All these deals have dampened supply. Coated paper prices increased 10% last year, and further hikes are expected in '08. Newsprint prices will balloon 11% this year, according to industry tracker Pulp & Paper Week, although other observers are convinced prices will go even higher. The crowning irony is that this is happening even as dropping circulation has taken much demand out of the market, and thus the suddenness of the increases has surprised many.
This lashes another lead weight onto publishers already struggling through choppy waters. (Pundits, including myself, have for years expected more magazines to close; higher paper prices may accomplish what years of sluggish advertising did not.) It also leads to a raft of not-good implications. Publishers will be tempted to shrink circulation (since marginal circulation just got much more unprofitable), and magazines will consider cutting back on the size and quality of paper. If, like me, you believe the physical attributes of print lure readers and advertisers, this is a bad road to go down. It will also accelerate the move online, assuming media executives still need a shove.
But, as comScore's data show, even growth on the Web has its limits. It is becoming clear-at last!-that there are limits to how much media the average human can consume. So the battle for the same eyeballs will intensify. "People are not going to spend that much more time in front of their PCs," says an executive at a top Web property. "The big growth is over."
That sounds a touch dramatic to me. Many have it worse than the Web. The big sites continue to ring up truly staggering stats, and there's a huge difference between stagnating traffic growth and disappearing audiences, which virtually all other media face. But the new reality will nonetheless reshape online media. Look no further than the big portals, which are already shifting focus to monetize the traffic they've got-think of Microsoft buying digital advertising and technology firm aQuantive-rather than just chasing after more eyeballs. Meanwhile, it won't be long before media sites are forced to grow by poaching rivals' traffic. Should The Wall Street Journal go free on the Web under News Corp. (NWS) ownership, for example, an especially tasty tit-for-tat traffic battle will doubtless ensue with The New York Times (NYT).
A more far-fetched scenario is painted by an online executive, who suggests that sites may start trying to lure users with cheap premiums like those employed by gas stations during the price wars of the early 1970s. (But perhaps he and I are the only ones who remember the "collectible" football stamps Sunoco (SUN) gave out back then.) Look, also, for sites that tally lots of steady traffic from the same loyal users-a description that works for both the Times and TMZ.com-to loom as more valuable destinations for advertisers, since they're better bets to avoid traffic erosion, and steadiness is a virtue in an environment of scarcity.
Which brings us back to the broadcast networks' current battle with strike-induced scarcity. They may be temporarily immune to many of these challenges since, even as overall Web traffic growth slows, Web video growth still skyrockets. But I can't help thinking that the networks' best move would be to cough up some concessions to placate the writers and get back to the way things were. Traditional TV arguably has weathered the stampede online better than any of its media peers. There is still scarcity that comes with being just about the only venue that can reach more than 10 million people at once. Preserving that is worth a modestly generous settlement, so long as it comes before viewers flee TV for other entertainment options. Just ask the publishers, who now face scarcity of a much different kind.
Wednesday, January 02, 2008
Read All About It
How newspapers got into such a fix, and where they go from here
By PAUL E. STEIGER
It was the fall of 1999, and the newspaper I edited, The Wall Street Journal, was awash in money. Thanks to the dot-com boom and the lush advertising it generated, we were running the presses at full tilt nearly every day, yet had to turn away ads for lack of space.
Even as the good times rolled, two non-newspaper names kept coming up. I recall being stunned to learn that the main place where our own readers checked stock prices was the finance section of Yahoo. A couple of kids from Stanford had launched a search engine called Google. Already, many of my colleagues were using it.
Less than six months later, the tech bubble began to deflate. Hundreds of dot-coms died, taking with them their ad budgets. But the Web industry pushed forward, and within a few years it shredded newspaper business models that had held sway for decades.
Guglielmo Marconi sent the first radio signal across the Atlantic ocean in 1901. See more media milestones.
That high-tech jolt to my industry wasn't something I could have imagined on the July day in 1966 when I walked into a factory-like building in San Francisco to start work as a 23-year-old reporter for the Journal. Vintage Linotype machines spat out hot-metal versions of stories a line at a time. An industry of family-owned newspapers was setting off on a momentous period of growing power and profit.
On Thursday I'll pack my last box and take leave of a place where I've spent 26 of my 41 years in journalism, including 16 as managing editor of the Journal. (The other 15 years, 1968 to 1983, I was a reporter and then business editor at the Los Angeles Times.) Today, all around me is an industry in upheaval, with slumping revenues and stocks, layoffs, and takeovers of publishers that a decade ago seemed impregnable. Just this month, Rupert Murdoch's News Corp. completed its acquisition of Dow Jones & Co., the Journal's publisher, and real-estate magnate Sam Zell gained effective control of Tribune Co.
The Journal's editors have asked me to retrace my experiences of the past four decades in search of insights into how all this has happened, what may happen next and the implications of all this change for readers, the nation and society at large.
For readers, the implications are clear: a stark contrast of feast and famine.
The cornucopia of national, international and business news, sports, and especially opinion available free on the Web is rich beyond historical parallel. Anyone with a fact, a comment, a snapshot or a video clip can self-publish and instantly compete with the professionals.
At the same time, the vast array of investigative reporting and foreign correspondence assembled at American newspapers over the past several decades is being cut back at all but a few publications, as papers succumb to the pressure to cut costs.
Many journalists and academics see in these cutbacks a threat to the democratic ideal of a well-informed public. Some urge turning to philanthropy or an expansion of public television as a way to fill the gap. Others have begun to argue for a government subsidy for newspapers -- an unlikely prospect for now.
Less clear is how the industry will ultimately be transformed.
Many papers are seeking to leap ahead in adapting to the movement of readers and advertisers to the Internet. This means tightly holding down costs of print publications while leveraging metro papers' principal unique assets: local reporting staffs and local ad-sales teams.
Cash from newspapers' own Web offerings has grown fast but needs to grow faster, because at current rates it will be years before it makes up for the slumping inflow from the still-much-larger print side. As Google, Yahoo and similar Internet enterprises suck away ad dollars, many newspaper companies hope to gain new revenue by forming once-unthinkable partnerships with each other and some of these same rivals, particularly Yahoo.
In some ways, what's happening to the newspaper industry is a return to its past. Less than 50 years ago, American newspapers were in the main relatively small, narrowly profitable, family-owned, locally focused and hotly competitive.
As a kid reporter in California in the '60s, I heard tales from newsmen and photographers about how, just a few years earlier, they had sat in cars, engines running and radios tuned to police bands, trying to get an edge in covering the next murder. The national and international news would be handled by the wire services. Lurid local photographs on page one were what sold newspapers in that era.
A certain fast-and-loose, devil-may-care attitude often prevailed. I remember walking past a photographer's open car trunk and noticing that he carried a well-preserved but very dead bird among his cameras and lenses. The bird, he explained, was for feature shots on holidays like Memorial Day. He'd perch it on a gravestone or tree limb in a veterans' cemetery to get the right mood. Nowadays such a trick would get him fired, but in the 1950s, this guy said, there was no time to wait for a live bird to flutter into the frame.
Then, beginning in the 1960s, the industry morphed into a series of mini-monopolies. First, mounting costs forced a shakeout -- mergers and newspaper closings that typically left one city paper preeminent in the morning market and another in the evening.
For a while, the evening franchise had a slight edge: People had more time to read then. In a twinkling, that advantage disappeared, crushed by a phenomenon that can be summed up in two words: Walter Cronkite. More and more families gathered in front of the tube at the dinner hour.
The morning papers then got a boost, a surge in women readers. As baby boomers reached school age, their mothers could sit back for a moment with a second cup of coffee and read sections aimed squarely at them.
Soon, in city after city, the leading morning newspaper came to dominate and often eliminate its rivals, reaping comfortable margins in the process. Before long, these were linking up in multibillion-dollar, multi-city chains, building publicly traded companies with rising profits and stocks. Some acquired TV stations as well.
Many of these information behemoths invested heavily in quality, expanding their reporting locally, nationally and internationally. This was good business as well as a boon to readers, because it raised barriers to entry for would-be competitors.
The result was a golden age of American journalism. In New York, Washington, Chicago and Los Angeles, of course, yet also in Boston, Philadelphia, Miami, Milwaukee, Atlanta, St. Louis, Des Moines, Louisville, St. Petersburg and more, daily papers were willing to send reporters far afield in pursuit of stories exposing corruption or explaining the world. Newspapers opened or expanded Washington bureaus and added reporters abroad. Some stationed them not just in London, Moscow and Tokyo but in places like Sydney and São Paulo.
As their financial strength and staff size increased, they became fearless in pursuing corruption. A 1964 Supreme Court decision, New York Times v. Sullivan, protected publishers from libel judgments by public officials even if what was published was inaccurate, so long as the paper didn't know the article was inaccurate and wasn't reckless about what it published.
The news operations of the three main television networks in those days followed a similar pattern. As profits grew, they added to staff and launched foreign bureaus and investigative projects. The Sunday-night magazine program CBS launched in 1968, "60 Minutes," set a new standard for expensively produced and deeply reported video journalism.
The public seemed to approve. Intrepid journalists proliferated in films like "All the President's Men," depicting Washington Post reporters' exposure of Watergate. Enrollments in journalism schools surged, as well as applications for reporting jobs.
They were heady times indeed. When the L.A. Times investigated suspected gasoline hoarding during fuel shortages in 1979, one reporter got the idea of flying over refineries and tank fields to look for evidence. As the editor running the coverage, I asked my bosses for approval to hire helicopters or small planes for a story. The answer: Go right ahead.
In the end, we didn't. Our reporting showed that most of the hoarding was by people like our own readers, who'd taken to driving with their gas tanks always full. But the lesson was clear: When it came to getting an important story, don't worry about the cost.
I don't remember exactly when cracks began to appear in this halcyon life. At most big papers, circulation, revenue and profits grew through the 1970s and 1980s and into the 1990s, with recessionary pauses that weren't excessively fretted over.
Around the time of the 1980 slump, L.A. Times editors were told they needed to impose modest spending restraints. I figured out I could meet my target just by eliminating first-class travel on my group's reporting trips, then allowed on flights of more than three hours or so. I was quite proud of myself until the next day, when the top editor of the entire paper, who only occasionally visited our floor, strode straight to my desk. "I like flying first class," he said with a grin. "You're setting a bad example." I found another way to reach my goal.
In the mid-1980s, when I was a deputy managing editor at the Journal, the Dow Jones CEO almost apologetically imposed limits on our then-ample spending, in the face of cyclical advertising cutbacks by financial firms. As the CEO quipped, referring to then-managing-editor Norman Pearlstine, "We gave Norm an unlimited budget, and he exceeded it."
In those days, we worried quite a bit about television. Survey after survey showed that, with each year, more Americans were getting their news there. While that made circulation growth tougher to achieve, ad revenue continued to rise, as newspaper readers generally had better incomes.
Cable TV added a new worry, because here was a medium that could target smaller, exclusive audiences and thus pose a greater challenge to print. Even so, newspaper revenue continued its growth.
Then in the 1990s came the digital networks and the Internet, unleashing forces that would ultimately undermine newspaper business models that had been so supportive of journalism. First came dial-up, then a few years later the Internet, and by 1995, dozens of newspapers, including the Journal, had online editions.
Early leaders of the Journal's online edition privately referred to it as "the paper killer," to the great annoyance of print colleagues when they found out. But the phrase was apt: The Web could deliver words and numbers at nearly the speed of light without the cost of printing, paper or delivery trucks, all searchable and archivable.
In response, newspapers sought to do three things: cut costs, diversify and, above all, embrace the new technology and dominate it. After all, in the 1940s and 1950s, the leading radio networks had become the leading television networks. Why couldn't newspapers copy that model?
They certainly tried.
Cost-cutting first followed a path set in the 1970s, of using computers to eliminate jobs downstream from the newsroom. Today, nothing but electrons stands between the minds and hands of the journalists and the photographic image used to produce a printing plate. But those cuts often weren't enough, and publisher after publisher turned to hiring freezes, buyouts and ultimately layoffs. The reductions have fallen particularly heavily on foreign and investigative or "project" reporting, which are among the most expensive categories to produce.
Diversification typically took the route of investments in television stations, cable systems, satellite, book publishing and other domains at least notionally related to newspapers. Some were successful, some not.
Publishers' Internet ventures almost always had limited success, at least at the outset. Part of the problem was that those in charge of print advertising and circulation were suspicious of their counterparts on the online side, and vice versa. At the Journal, I saw it often.
At one point, the print folks suggested that online subscriptions be awarded free to print subscribers. It was an idea, the online folk retorted, that relegated their site to "toaster status," as in savings banks giving away cheap gifts for opening an account.
In turn, the online people wanted renewal mailings to print customers to include a line soliciting a paid subscription to the Journal's Web edition. The print side resisted mightily, fearing that adding any new option to the form would cause some customers to delay responding long enough to trigger a costly follow-up mailing.
A bigger problem was that newspapers often sought to copy fairly closely on the Web what they did in print, rather than offer new products taking full advantage of digitization. The most creative new products came mainly from enterprises with little connection to newspapers. And soon, if you named almost any bit of data you used to rely on papers for -- sports scores, weather, stocks, movie times -- there were Web sites offering more information faster, and free.
The decisive blow may have been Google's, with its powerful search engine that would either give you a quick answer to a question you had or steer you to sites that could. The irony, of course, was that some of the most useful of those sites were newspapers'.
Papers remained quite profitable, for the most part. But as the future began to look increasingly troubled, one publisher's stock after another got hammered, starting around the turn of the century.
Especially hard hit were publishers of prestigious newspapers. Dow Jones stock was at less than half its high before News Corp. made its successful bid for the Wall Street Journal publisher last spring. Times-Mirror fell more than 50% before being acquired by Tribune Co., which in turn has fallen around 45% from its high. Knight Ridder fell 20% from its high before its acquisition by McClatchy, which now trades at around 80% below its peak. New York Times Co. is near an 11-year low. Washington Post Co. is about 20% below its top.
Some publishers with less-prestigious papers have done better. Scripps and Cox have diversified successfully into cable networks and cable systems, respectively. Thomson sold all its newspapers and became a financial-market, legal and medical data company before reaching a merger agreement with Reuters this year. News Corp. leveraged its Australian newspaper business to acquire not only newspapers but also a movie studio, television, cable, satellite TV and Web interests around the world. It picked up the prestigious Times of London along the way, and the Journal after its transition to a global media company.
Why this divide? It could be that operators of high-prestige newspapers were more reluctant to risk the franchise, even under a level of financial duress that would provoke many managements to bet the farm in pursuit of a radical opportunity.
What happens next? Change, rapid and largely unpredictable. Nearly every company in the industry needs major new revenue, big cost reductions or a healthy dollop of each. The people and entities to watch most closely are:
-- The entrepreneurs, Mr. Murdoch and Mr. Zell. Mr. Murdoch has vast experience in media generally and newspapers in particular, controls major financial resources and has big plans to expand the Journal -- in print and online, domestically and overseas. Mr. Zell used financial engineering to control Tribune Co. with minimal investment of his own, has little media experience and isn't likely to spend much on his new properties. Both are decisive investors and operators. They aren't always successful, but it's unwise to bet against them.
-- New York Times Co. Mr. Murdoch has said he'll use the Journal to steal a portion of the general-news and cultural-news franchises of Times Co.'s eponymous flagship newspaper. But entities fight hardest defending their home turf, and the Times has both a strong, growing Web site and a Sunday edition that remains an advertising monster. It will be under pressure to follow some of the cost cutting its sister Boston Globe has done. Pure conjecture: Assuming that New York Mayor and Bloomberg LP owner Mike Bloomberg isn't U.S. president-elect a year from now, would he and Times Chairman Arthur Sulzberger Jr. consider putting their two enterprises together?
-- Hearst Corp. After the inheritors of William Randolph Hearst's empire lost their bet on evening papers in the 1960s, they bulked up their revenue from magazines like Cosmopolitan, diversified smartly in TV (including a 20% stake in ESPN, now worth roughly $6 billion), and stayed in newspapers but with a close eye on profit. With four metro papers, like the Houston Chronicle and San Francisco Chronicle, and eight smaller ones, Hearst is in the vanguard of figuring out ways to exploit newspapers' local-reporting strengths, both in print and online.
Hearst has helped forge a partnership involving a consortium of newspaper companies and sometime-nemesis Yahoo. The idea is that together they can offer advertisers total coverage of various metropolitan areas, and feed readers back and forth. Question: Are these going to be best friends forever or a cobra and a mongoose?
Final word: Next week I move over to a nonprofit called Pro Publica as president and editor-in-chief. When fully staffed, we will be a team of 24 journalists dedicated to reporting on abuses of power by anyone with power: government, business, unions, universities, school systems, doctors, hospitals, lawyers, courts, nonprofits, media. We'll publish through our Web site and also possibly through newspapers, magazines or TV programs, offering our material free if they provide wide distribution.
Pro Publica is the brainchild of San Francisco entrepreneurs-turned-philanthropists Herbert and Marion Sandler, who along with some other donors are providing $10 million a year in funding.
The idea is that we, along with others of similar bent, can in some modest way make up for some of the loss in investigative-reporting resources that results from the collapse of metro newspapers' business model.