Sunday, August 10, 2008

Desktop Publishing's Legacy: 230,000 Fewer Commercial Printing Workers, and An Explosion in Content Creation Workers

Desktop Publishing's Legacy: 230,000 Fewer Commercial Printing Workers, and An Explosion in Content Creation Workers
Dr. Joe Webb

FREE Marketing, Management and Economic Notes from Dr. Joe Webb

08/07/2008 -- Everyone thinks that the Internet has been the cause of a decline in print; the real cause has been the lasting legacy of desktop publishing in the grander computer revolution.

Last month, U.S. commercial printing employment was below 600,000, which caught my attention. I went straight to my library of industry statistics. As best as I can determine using various government data, we're at levels not seen since 1986 or 1987. Commercial printing employment peaked in mid-1998, almost reaching 830,000. It's been quite a change from 1987 to now.

At that time, there were 70,000 employees in prepress trade shops (separators, platemakers, and trade typographers). Today, there are 25,000 with most of them are in some high-level publishing workflow, with nary a sense of what platemaking, separating, or typography was or might have been.

In 1987, there were 176,000 employees in book, magazine, and miscellaneous publishing; there are 300,000 today, augmented by another 50,000 or so micropublishing entrepreneurs.

Desktop publishing reduced the costs of production and stimulated the content creation process, and was a critical component of the march of new media. In 1987, graphic design did not even have its own industry classification code, as it was buried in something called "commercial art and design." Many of these workers referred to themselves as "illustrators." About 52,000 employees worked in graphic design firms then, with another 4000 or so as freelancers. Today, there are 73,000 employees in graphic design firms, plus another 90,000 freelancers, more than three times 1987's level.

Even advertising employment is higher. There are 40,000 more workers in advertising than in 1987.

Commercial printing employment is now at 1987 levels, while publishing, design, and agencies have added more than 250,000 workers in the last 20 years. Not all of them are creative workers, of course. Without the ability to create content efficiently, however, even those workers who are not in content creation or content production positions owe their jobs to the creation process that is the reason for their employer's existence.

The loss of prepress has hurt the printing industry's financial performance, especially its profitability. In turn, the technological changes that undermined our industry created new opportunities. "Creative destruction" is a phrase used by economists to explain how technology and other factors destroy old ways of doing things and replace them with more productive methods, new products, and sometimes entirely new industries. Your perception of the effect depends on whether your skills are the ones being replaced. There is no doubt that the technologies and entrepreneurs that coalesced around desktop publishing two decades ago are still having ripple effects in our industry.

It is curious that the 230,000 loss in print workers in the last ten years is almost the same as the 250,000 new workers in content creation industries, isn't it?

There is another important point. The new workers are more inclined to be freelance professionals, working as sole practitioners, than ever before. A $10,000 Mac workstation today is a powerful production tool, capable of producing sophisticated, high quality media in almost any format. They're not always working alone, however. These workers are more likely to be working on a project basis rather than with a single employer, linked with other independent professionals, each with a unique expertise. Modern telecommunications and the Internet are only a hint of what is to come. Printing organizations need to recognize this empowered freelance revolution.

I am often asked what would draw more young people to the printing industry. I have always heard the same tired recommendations in my 30 years in the business, and we know they don't matter. There is only one thing that does it: successful, dynamic, and growing companies that do interesting and exciting things. One of the attractions to content creation businesses is the newness that is the essence of their projects: there is always some aspect of the content that has never been done before. Creating content, even in its necessary repetitive production tasks, is more attractive to young workers. Working as freelance plays into millennial generation themes of independence, time flexibility, and geographic freedom.

Manufacturing by its nature may not be able to compete with that. Quality control programs, for example, are designed to create a repetitive and predictable sameness of results without regard to content. Small print businesses may not be able to compete with the attraction to the content creation businesses unless its owner or management is somewhat charismatic, emanating a sense that the risk of tagging along will be worth it in the long run.

In the end, falling under 600,000 employees is just a number. It's a reminder of where we've been, and what may come. It's a reminder of how much the communications business has changed, and will change. The question is whether our industry's entrepreneurial spirits will create, individually and collectively, that successful, growing, dynamic, and intriguing culture that attracts workers and capital for these decades ahead.


For a look at what life was like at the beginning of the desktop publishing movement, this 1987 article from Money is illustrative.

Magazine Circulation Falls in First Half

Magazine Circulation Falls in First Half
By Irin Carmon with contributions from Stephanie D. Smith Amy Wicks
From WWD Issue 08/08/2008
The phrase "flat is the new up" became a mantra in recent years when it came to assessing newsstand sales. Well, as core fashion titles, women's service books and men's magazines have almost universally posted declines in their single-copy sales in the first half of 2008, how does "less down is the new up" sound?

To wit, Hachette Filipacchi Media's Tom Masterson, senior vice president for consumer marketing and manufacturing, pointed out that, while Elle's newsstand was down 6.3 percent in the first six months, "many of Elle's competitors decreased more."

That's true - Vogue was down nearly 15 percent, though it still outsells Elle on the newsstand by an average of about 50,000 copies monthly; Harper's Bazaar fell 8.3 percent, and W, which gets the vast majority of sales through subscription, was down 10 percent.

Or take Shape, which was down about 10 percent overall on the newsstand in the first half, but still averaged higher total sales than the troubled fitness category in general. (Self had the dubious honor of being less down, but is still smaller; Shape has beefed up its distribution at checkout and added 17,000 pockets nationwide.)

Growing market share might be the last remaining competitive advantage in an environment where nearly every editor in chief is seeing the kind of declines that once would have gotten them fired. The long-standing expectation that a healthy magazine is one that sees successive growth on the newsstand is in question - you can't exactly fire everyone.

Whether the change is cyclical (uncertain economic times that include high gas prices, fewer supermarket trips and less disposable income) or secular (consumer behavior is undergoing a fundamental change away from newsstand, or from print magazines themselves) depends on whom you ask. Editors and publishers would have it be the former.

"I don't think newsstand softness is systemic to magazines, but rather systemic to the economy," said O, The Oprah Magazine publisher Jill Seelig.

But some advertisers and observers are beginning to wonder whether the second diagnosis is upon us. As consumers' attention fractures, spoiled by choice and easy digital access, the culture and entertainment industries already have adjusted their expectations, counting smaller sales numbers than ever as blockbusters. The magazine industry might be falling prey to the same tectonic shift.

Several magazines, such as Glamour and Marie Claire, have seen disappointing sales for several periods in a row, even when the economy was flush, suggesting more of an overall move away from big women's titles. (Perhaps in reaction, Glamour unveiled a redesign this month.) Even newsstand stalwart Cosmopolitan dropped 6 percent in this period, a difference of more than 100,000 copies, after essentially flat newsstand sales since 2004.

The only source of growth across the board has been in total circulation, which, given the newsstand declines, usually means that publishers are spending more than ever to build and maintain their subscriber bases. And advertisers are traditionally more skeptical of that kind of audience-building, given publishers' past practices of steeply discounting subscriptions.

That Men's Vogue's newsstand is down 39.1 percent, for example, even as it's raising its rate base to 400,000, can be explained several ways: first, that it suffers from an apples-and-oranges comparison between five issues published in the first half of 2008 and three in the first half of 2007; second, and more significantly, that it's growing its audience the expensive way, through subscriptions, and not wowing on the newsstand.

The title also has seen its verified circulation (bulk copies in public places) drop by 14 percent since last year. A spokeswoman said, "Men's Vogue continues to take risks on covers to recognize accomplishment over celebrity." Case in point: the model-free Bugatti cover in May, which sold 45,000 copies, according to Rapid Report. (That was still better than the worst cover to date, April with Alex Rodriguez, at 41,000.)

As such, given the flood of negative newsstand figures in the first half, the few examples of uptick in sales should be particularly celebratory - among them, In Style, which, whether you consider it a core fashion title or a peer of Glamour and Marie Claire, was the only one in either group to see any rise in newsstand, by 4 percent to 783,254. That's before the recently unveiled redesign was even tested on the newsstand.

And Rodale's David Zinczenko showed once again that he can put his money where his mouth is, maintaining Men's Health's position as the number-one newsstand seller in the men's category with a 2 percent growth, and having a hand in two newer magazines, which also have seen good news: Women's Health, with its 12 percent rise, and Best Life, up almost 20 percent. Maybe that's why Men's Health Living has been given a go-ahead in a tough environment for shelter magazines.

So, do the steep declines serve as a harbinger of equally sharp falls in advertising revenue as firms seek other media? Well, for now, media buyers seem to be seeing the big picture. "I don't think we would have seen these types of declines if the economy had been in a different place," said Robin Steinberg, senior vice president and director of print investment and activation at MediaVest. "We would have seen some declines, but not deep declines." That said, she added: "The future of magazines is not going to have the same distribution exposure as in years past," as the business model shifts from emphasizing the number of eyeballs to assessing quality of audience.

And media companies are experimenting with new distribution tools such as Maghound, the so-called "Netflix for magazines" launching in September. A subsidiary of Time Inc., Maghound will allow consumers to switch in and out titles for a flat monthly fee, and around 300 titles have signed up so far.

Magazine publishers also are trying to figure out how to leverage their Web sites to build a subscription base - a potentially more efficient, or at least cheaper, way to add subscribers than direct mail or verified circulation. Hearst magazines in particular - many of which tend to be big, single-copy-heavy titles in an age of grim newsstand - have suggested this as a winning strategy. In the face of a newsstand decline of 17.3 percent, for example, Oprah's Seelig pointed to the fact that the magazine hasn't had to resort to verified circulation and that subscriptions were up 7 percent, in part because "we played around with the subscription offers on"

She added, "The simple truth is consumers are not going to the places where our magazines are sold as frequently as they were," i.e., airports, supermarkets, drugstores and other retailers.
That said, the magazine recently saw the exit of editor in chief Amy Gross, billed as voluntary, and new editor of former Golf for Women editor Susan Reed will have to figure out how and if the newsstand can be turned around. George Janson, managing partner/director of print at Mediaedge:cia, said, "Some magazines have reached a natural level of circulation," pointing to Oprah in particular.

"Magazines are also coming off a period where [advertising] spending and circulation have, for the most part, been flat to up," added Janson - meaning that what goes up sometimes has to come down.

But if the latest newsstand numbers prove to be long-term indicators, publishers could be faced with hard choices, such as cutting rate bases or rethinking their distribution models. "As content becomes free on the Internet, I question whether or not the future of magazines will be opt-in and nonpaid," said Steinberg.