What's Next for Newsmagazines?

What's Next for Newsmagazines?
Fading Publications Try to Reinvent Themselves Yet Again
By REBECCA DANAApril 4, 2008; Page B1
http://rs6.net/tn.jsp?t=7n4krlcab.0.sgjdylcab.cuf4zubab.1&ts=S0331&p=http%3A%2F%2Fonline.wsj.com%2Farticle_email%2FSB120727766116988719-lMyQjAxMDI4MDA3NDIwNzQ3Wj.html
The weekly newsmagazines have been declared dinosaurs as far back as the late 1980s. But now that 111 employees at Washington Post Co.'s Newsweek have taken buyouts, including many longtime editors, it's clear that their cultures are finally being blown up and reinvented. And some say that's not such a bad thing.

The employees at Newsweek, making up around 20% of the staff, last week accepted a buyout offer that includes months of salary, years of health insurance, and in some cases, a contract with Newsweek. However generous-sounding, the buyout marks a significant round of bloodletting in the newsmagazine business, which in recent years has seen Time Warner Inc.'s Time and Newsweek wage staff-attrition campaigns in search of long-term economic viability. Shedding employees, particularly older ones that earn higher salaries, is a quick way to offset depressed advertising and newsstand sales.
The most recent cuts are more than just attrition, however. These magazines are changing dramatically, and losing chunks of institutional memory along with the exiting employees, many of whom never worked anywhere else.
Newsweek Editor Jon Meacham offered the buyouts to around 150 employees mainly as a way of cutting costs, but also because it fits into the broader strategy he said he has been putting in place at the magazine since taking the reins 18 months ago.
Mr. Meacham's strategy involves increasing the quotient of serious news in his magazine by bringing in energetic, often younger and frequently lower-earning talent while keeping Newsweek's stable of brand-name writers intact. Some of those writers, including Cathleen McGuigan and film critic David Ansen, accepted the buyout offer but will likely return on contract.

"Like any managers anywhere, we looked at a revenue picture that could be more thrilling and said, 'How can we accomplish two or three things?,' " Mr. Meacham said in an interview. " 'How can we control costs? How can we have money to rebuild and hire new voices and new reporting talent? And how can we do that in the service of what we've been trying to do with the magazine of the last year-and-a-half, which is make it more serious and try to make ourselves indispensable to the conversation?' "
While circulation for both Newsweek and Time has remained flat, at around 3.1 million and 4 million per issue, respectively, the number of advertising pages has declined in recent years and major retailers, including Wal-Mart Stores Inc., are reducing the number of issues they stock in stores.
Time, along with several of its sibling magazines, endured its own round of buyouts just over a year ago. Editor Richard Stengel assumed his post shortly before Mr. Meacham did and made sweeping changes, redesigning the magazine and Web site, cutting the advertising rate base and changing the delivery date to Friday from Monday.
"My whole view was there's more information out there than any time in human history. What people don't need more of is information," Mr. Stengel said. "They need a guide through the chaos."
This appears to contrast with Mr. Meacham's strategy of upping the news content in his magazine. However, both men share what could be called "Economist-envy." In 2007, the Economist newsmagazine, published by U.K.-based The Economist Newspaper Ltd., saw an 8.5% increase in advertising pages compared with 2006, according to the Magazine Publishers of America. By contrast, Newsweek's advertising pages dropped 6.7% and Time's fell 6.9%.
Cable news and the Web have sapped Time and Newsweek of much of their audience in recent years, crowding out their exclusive hold on certain kinds of stories, including analyses and detailed retellings of major news events. As the Internet has also given rise to a new generation of multiplatform, self-branded news personalities. It no longer takes two decades at Newsweek to be a brand-name pundit.
The newsmagazines' first response years ago was to increase their focus on softer, user-friendly stories on topics such as health, science and technology. The content appealed to baby boomers; advertisers liked it, too, seeing it as a better environment for their pitches than wars and political scandals. Meanwhile, having well-known columnists became a way these magazines could distinguish themselves amid the increasing competition.
"What's happened in the business as a whole is talk is cheap and reporting is expensive," said Newsweek writer Jonathan Alter, a 25-year veteran at the magazine who qualified for the buyout but declined it. But he adds, some of the change in culture is welcome. "In general, the office politics are at a much lower volume than in the past because the old fight of space is different than it was. If there's not room in the magazine for something, you can just do it online," he said.
Mr. Meacham said that since he took over, Newsweek has 30% more text and fewer pictures.
Time and Newsweek have both used targeted voluntary buyout packages to help trim the budget in recent years. Time has also closed some bureaus to save on real-estate costs, replacing them with roaming "laptop correspondents," and removed some of the layers of intermediate editors.
Those who survived rounds of buyouts at both titles are adapting to new job descriptions. "We have to have stories that have original reporting and are well-written and that you can actually remember," said Newsweek Editor-at-Large Evan Thomas.
At a recent speech at Columbia University, Mr. Meacham delivered a blistering response after he asked who reads Newsweek and none of the 100-odd students in attendance raised their hands.
"It's an incredible frustration that I've got some of the most decent, hard-working, honest, passionate, straight-shooting, non-ideological people who just want to tell the damn truth, and how to get this past this image that we're just middlebrow, you know, a magazine that your grandparents get, or something, that's the challenge," Mr. Meacham said. "And I just don't know how to do it, so if you've got any ideas, tell me."

Murdoch: Technology Driving Vast Changes in Media

Murdoch: Technology Driving Vast Changes in Media
http://explore.georgetown.edu/news/?ID=32589

Media Magnate Discloses Desire to Add Another Newspaper to His Stable of NY-based Publications

Media mogul Rupert Murdoch warned that "technology will continue to destroy all of the old ways and old assumptions, especially in the media" during an April 2 speech on "Creative Destruction: News for the 21st Century," sponsored by the McDonough School of Business.

"We have one certainty - we can never be sure where the industry will end up," Murdoch said in a Gaston Hall address about the changing face of media. "It is true that technology is changing accepted ways of doing business. It's making us work harder for our customers."

The ultimate effect, Murdoch predicted, is more access to news and entertainment for people who cannot traditionally afford it.

Murdoch is the chairman and chief executive officer of News Corp., one of the world's most extensive media conglomerates. Its holdings include TV and radio channels, movie studios, Internet sites and newspapers. In his speech, he said technology's effects have permeated every aspect of News Corp., from the social networking on MySpace to the type of articles printed in local newspapers.

Consumers, especially the younger generation, have a chance to shape the inevitable changes by demanding content based on personal preferences, he added.

"Unlike traditional media, choices in the future will be generated from the bottom up, not top-down," Murdoch explained. "A 13-year-old girl in Delhi is not going to want the same news and entertainment as a 50-year-old executive in Chicago . . . Our challenge is to personalize the experience for these people so we can reach them both."

Murdoch foresees the end of traditional mass media with consumers receiving news and entertainment from limited sources. Media companies need to diversify to survive, which is one reason his company purchased MySpace in 2005, he said.

The CEO claimed News Corp. is at the forefront of providing individualized content. His company's news media outlets reached three-quarters of the world's population and are published in more than 30 languages.

Murdoch hinted for the first time publicly that he is looking to extend that reach by acquiring Newsday, a Long Island-based newspaper owned by Tribune Company. That, Murdoch said, could bolster another News Corp. holding, The New York Post, and compete for revenue against The New York Times.

However, he acknowledged the U.S. Department of Justice might stand in the way based on antitrust concerns, because News Corp. also owns The Wall Street Journal.

When asked about bias in the media, Murdoch dismissed claims that his outlets show biases, saying that his personal opinions are not reflected in the news cycle.

"People laugh at Fox News because we call ourselves fair and balanced . . . The fact is that CNN was always extremely liberal and never had a conservative, Republican voice on it. The only difference is that we have equal voices on both sides, but that seems to have upset a lot of liberals," he said. "We believe the more voices, the better and let's have variety and opinions coming from all sides. Society is growing more intelligent and people can absorb this, they can accept or reject it."

Murdoch also denied that his company wants to create a news monopoly by saying, "We're just a tiny fraction of the media landscape. There are millions of voices out there. Everything we've done, in my opinion, is to create competition , , , We think that's a public service. We want to give people choices. The more choice there is, the better it is."

The Most Notable Launch of 2007

The Most Notable Launch of 2007
Posted by Samir Husni
http://mrmagazine.wordpress.com/

Drum roll please . . . from a field of 715 new magazines launched in 2007, Condé Nast Portfolio is our choice as The Most Notable Launch of the Year. 2007 will be remembered as the year that saw the return of the prophets of doom and gloom and at the same time as the year folks like David Carey and Joanne Lipman showed the world that print is and can be alive, well and kicking. Our hats off to the folks at Condé Nast Portfolio and the 714 other magazines that showed the doubting Thomases that print is still a very vibrant medium in this day and age. A recent Dutch newspaper adopted the tag-line "News is free but information you have to pay for." And that is exactly what CN Portfolio has done as it approaches its first anniversary issue. The magazine has provided in depth information on business issues ranging from food, gender, oil, media . . . you name it. The information in each issue is presented in an in-depth fashion merging the power of words and images to deliver the best visual impact of print (VIP). This VIP enhances CN Portfolio's addictive, exclusive and timely, yet timeless content.
With the power of print alive, well and kicking on the pages of CN Portfolio magazine, the same can be said about Portfolio.com website. CN Portfolio provides a complete package of information that makes it a must to today's movers and shakers. Whether ink on paper or pixels on the screen CN Portfolio deserves the honor of being named the Most Notable Launch of the Year. A well done job in the midst of a very rough year both on the business and media fronts.
Indeed, 2007 has been a rough year for media across the board, but what we have seen in the last 12 months isn't new. It has happened before. In just one short year we have seen overseas news bureaus shutdown, a television and movie writers' strike that has altered viewing habits, a move to free internet media content by some big name papers, the slashing of approximately 1000 titles from Wal-Mart's newsstands and now you see that we have the lowest total number of new magazine launches in five years. So what should I do? Should I say some of you were right? That we are actually a dying industry?
I can't and I won't.
If I were to say those things and side with those who believe media is doomed I would not only be ignoring some key events that happened this year, but I would be ignoring what happened when new mediums burst on to the market in the middle of the last century. Newspapers and magazines were supposed to die after radio wowed the world. A few decades later radio, newspapers and magazines were all agreed to be dead after we fell in love with television. And today the talk seems to be that everything will suffer because of the internet. Just for a quick historical piece of information newspapers and magazines, like any other product, have a time to be born and a time to die. That was true in 1690 when the first American newspaper was born and the same was true when it died after the first issue was born. There is nothing new under the sun when it comes to the life cycle of all things that have a time to be born and a time to die.
Well here we are: it is 2008, we still have television, we still have radio, we still have newspapers and we still have magazines. That will not change. Most of the world is having no problem with media consumption. Newspaper circulation and readership is up all over the world with the exception of the American market (that is the subject of another blog), a paper mill was recently completed in Germany at a cost of €486 million, a printing press was also recently opened in the United Kingdom unlike any we've seen before and foreign newsstands are more crowded than ours and still European consumers want more.
But you don't even need to look as far as Europe to see that print is well, alive and kicking. The 2007 new launches totaled 715. That is, still nearly two new magazines launched each day on average. And while 2007 count is nearly 200 titles fewer than 2006, it is still substantially higher than the number than the number of new launches in 1991, the first year that commercial use of the internet was allowed. And don't forget the golden goose. Condé Nast felt so sure of the current desire for good content that they fed over $125 million into the launch of CN Portfolio, our Most Notable Launch of the Year. So far I haven't heard one whisper of disappointment concerning that investment, except of course from the prophets of doom and gloom.
I've been saying this for some time now, we are in the midst of a market correction. We saw the market correct itself in 1999 and we are seeing it again this year. What we are seeing is, in some ways, similar to what the housing market or national economy is doing. Anything involving money has a tendency to be a roller-coaster ride of ups and downs. There may be those that are complaining as we are at a low point, but be certain, those same individuals will be praising our industry when the numbers swing back up like they have time and again over the 20+ years I have been tracking new launches. Enjoy.

BoSacks Readers Speak Out: Evil Mantra, Scan Based Mags and Husni

BoSacks Readers Speak Out: Evil Mantra, Scan Based Mags and Husni
www.bosacks.com


RE: Is the Real Mantra? Be Evil. Very Evil
What happened to words like trust, ethics, civility, common courtesy, or morality (not to be confused with "religious")? Articles like this make me want to quit my job and live in a small cabin in the middle of nowhere.

Thanks for sharing this, I needed a little fire in my belly this morning to get the juices flowing.
(Submitted by an innocent bystander)

RE: Is the Real Mantra? Be Evil. Very Evil
Google has me scared . . . really scared. I am fearful as a publisher, as a father, and as a citizen in an open democracy. Where does this intrusion end? Can it actually end? The genie is out of the bottle. We have willing given out information everywhere to everyone. I can't see a way to stop this and at the same time I am fearful of it, even though my business does it's best to collect the very same data.
(Submitted by a Publisher)

RE: Is the Real Mantra? Be Evil. Very Evil.
Privacy. Hm. What's that?
Well let me give another example of a "time bomb".
Let's say you sign up with Earthlink.net for an email address. You use it for a couple of years and then something better comes along. So you cancel your Earthlink.net account and signup with your new subscriber. You take the time to make all the changes to all your accounts, you think, so they send messages and newsletters to the new account.
Then one day, a year or two later you get an email from a stranger. They have randomly chosen your old email account. An account that Earthlink.net conveniently re-activated as an available email name since you were not using it. This stranger tells you he was able to access your Classmates.com account using your old email address. How? Well, since he now has your email address, he can conveniently say he lost his password and they'll send him a new one, to the email address! Voila! Access to an account and ANY information, credit card info, personal data, that may be there. And, the stranger says, that any email list that you were on that hasn't updated their list, he is now receiving. Oh boy, you'd better not let you Mom/Wife/co-workers see THAT newsletter. That could be embarrassing. If the stranger wasn't an honest person, well let's just say that blackmail and identity theft from an old email address pops into mind.
So what do you think? How many of you dropped your dial-up email address for a new DSL email address? Did you know that your email address is being recycled?
Just something to think about.
(Submitted by a Paper Person)

RE: Jerry Seinfeld quote
"There's very little advice in men's magazines, because men don't think there's a lot they don't know. Women do. Women want to learn. Men think, "I know what I'm doing, just show me somebody naked.""
Jerry Seinfeld quotes (American television Actor and Comedian, b.1954)

I love this quote! And it's pretty much exactly what Mike LaFavore was told when he presented his pitch more than a decade ago for a new magazine idea: Men's Health.
Fortunately, Men's Health has proven Jerry's comment to be largely -- but not entirely -- incorrect. Men's Health does have a lusty "Cex & Relationships" section - and Cex is always a top-ranking Web feature as well.
Men DO want advice. They just don't want to admit it.
(Submitted by an Editor)
(BoSacks has intentionally changed the word CEX to hopefully bypass silly corporate filters that have no understanding or sense of proper usage and propriety)


RE: Scan-Based Trading's Hold-Up
A couple of comments . . . .
SBT is a way of the future - no doubt about it. Why in your whole story on SBT was the term "Issue code" not mentioned? (I searched) Simple scan based trading is logical and can apply to gum, except we change our product every week/every month and want to know if Angelina outsells Posh Spice. Retailers have not come to grips that requirement. Shall we change the manufacturing code every week as I believe People does? Then there will be 10,000 bar codes in the system. Also - not all retailers scan . . . will wholesalers have 2 classes of retailer. Many independents will likely never afford SBT.

It was also amusing when in the same set of BOSACKS emails, one had advertisers demanding magazines be more environmentally friendly then in the second email they we being suspicious of any audience calculations. The fastest way to efficiency in the use of magazines is to count pass along. To demand inflated circulation for the sake of rate bases is environmental hypocrisy - and a poor business model as well.
(Submitted by a Director, Consumer Marketing)


RE: Husni Vs. BoSacks - The Whole Experience vs. the Hole Experience
Bob, I've been a long reader, studier, and huge fan of print magazines. I've tracked their successes, their failures, I've tried to educate my customers about their trends to better serve the needs of publishers and mag advertisers. I've been fiercely loyal to print. I've purchased hundreds of newsstand copies to the tune of thousands of dollars (and NOT on an expense report). My very livelihood depends on the success of magazines. I've
worked to convince advertisers of the importance of the tangibility of that printed piece.

You know what? I haven't bought a magazine for 10 months.

I realize now that I didn't buy them for the paper, or the convenience. I bought them for the content, and I found a better way to get much higher quality content. Jezebel.com has replaced any random women's title (my intro was from an ADAge. Com article). I've literally replaced every bit of content that I once got from mags with free content on the web.

Now, I still buy print. Mostly books (lots of engagement hours for the money) and newspapers (lots of info for the amount of money) when I travel. Magazines fill neither niche . . . high cost for the time of engagement provided. The exception, of course are magazines like Vanity Fair, New Yorker, Esquire and Atlantic Monthly. And I feel THIS is the category of mag that will survive.
Keep up the good work!
(Submitted by an unknown Publishing Professional)


RE: Husni Vs. BoSacks - The Whole Experience vs. the Hole Experience
Bo, Your on-going debates are a joy to be a part of. You and Samir are both passionate defenders of your particular points of view and both unyielding of your turf. I think Samir is on the wrong side of the equation, but I applaud his last man standing approach. Having seen you both several times, you both make terrific and convincing arguments. I would see you again at any given moment. But Bo, is more correct than Samir. Magazines will be around for a long time as Samir says, but it will be the digital world where all the action and the advertising dollars will be. And that is coming from a multi-title print publisher. But in my niche, my readers are saying they prefer the digital path 2 to 1. I will not argue with my bread and butter as they pay the bills and the digital subscription fees.
(Submitted by a Multi-Title Publisher)

In the UK, free Publications bite down Hard

In the UK, free Publications bite down Hard
National papers have lost 14 percent of their circulation
By Heidi Dawley

For Britain's national newspapers, the recent years have been tough, in some ways tougher than for U.S. papers. It's not just the internet, though that's certainly hurt.

British papers have been besieged by free dailies in growing numbers, far more than U.S. papers.

It's cost dearly. In all, Britain's national paid-circulation newspapers have lost 1.9 million copies, nearly 14 percent of their circulation since 2000, according to a study from Ernst & Young.

Worst hit have been the downmarket titles. "We could say the increase in the number of free titles has hurt the populars more than other segments of the market," says Luca Mastrodonato, a media analyst at Ernst & Young in London and author of the study.

For the U.S., where free papers haven't gained nearly the foothold, it raises some intriguing questions. For one, how much have the paid titles been hurt so far? And will free dailies ever take off in the U.S. as they have elsewhere in the world?

While most U.S. markets have free publications, there are just a few with free dailies backed by big-money chains with growth ambitions, notably the Metro and Examiner chains. And their growth hasn't been anything near what's been seen in Europe.

But it's tough to draw comparisons, and for several reasons. One is that the Ernst & Young study looks only at national newspapers in the UK, of which there are many, not local dailies. In the U.S., there are only really three national dailies, The New York Times, USA Today and The Wall Street Journal, and they have fared far better.

Also, the U.S. doesn't have upmarket and downmarket papers, at least outside of major cities like New York. Metro dailies tend to be one-size-fits-all papers. And while their circulation losses have been considerable, they're below UK levels. All told, U.S. dailies have lost 8 percent of their daily circulation since 2001 and 11.4 percent of their Sunday circulation, according to the Project for Excellence in Journalism.

Still, Mastrodonato's study is interesting for what it says about the UK market. His figures show the Daily Mirror and the Sun have lost more than 17 percent of their circulation since 2000, whereas the quality titles like the Daily Telegraph and the Times have only lost 10 percent.

The loss has been particularly pronounced for the downmarket papers since 2003, when the free papers really began taking off in Britain. Since then downmarket papers have lost 14.5 percent of their circulation, compared to just 2.2 percent for the qualities.

In fact, the only paper to see its circulation increase in the last two years is the Financial Times, which is very high end.

A big factor behind the decline of the downmarket papers has been the defection of the young, which surveys show are increasingly turning to the internet for information. In fact, Ernst & Young reports that over half of Britain's 15-to-44-year-olds rely on the internet as their first source of news and information.

One huge reason is that it's free, and that also explains the attraction of the free papers over the paid-for downmarket papers.

"The risk is these people aren't going to get the paid-for habit in the future. So going forward the risk gets higher," says Mastrodonato.

All this paints a dark future for downmarket paid-circulation papers, in Mastrodonato's view.

He foresees a shakeout in which paid dailies will shrink in number and more free ones will arise.

He's more optimistic about quality dailies, which he believes will have an easier time of it. "We will be looking at print editions for some time to come," he says.
Heidi Dawley is a staff writer for Media Life.

Long-running industry magazine files tell epic story of writer's market

Long-running industry magazine files tell epic story of writer's market
The Associated Press
http://www.iht.com/articles/ap/2008/03/22/arts/Books-The-Writers-Market.php
CINCINNATI: Emma Gary Wallace, professional author, had more than a few notions about the business of writing.

With a resume that included essays in housekeeping and cooking magazines, and a popular Christmas story, "The New Neighbor," she was able and ready to share tips with readers of a new monthly magazine called Successful Writing.

"Writers waste a great deal of postage sending stuff around the country to impossible markets," she observed. "Don't carry coals to Newcastle or offer jewelry in a blacksmith shop. Every magazine has its own policy and makes a definite appeal to a certain clientele. Study these and take them into consideration when offering your wares for any market."

The year was 1921, and advice about writing was and remains a market itself.

The timeless cry for help as one makes the great leap from the desire to write to actual writing to published writing has inspired countless books, magazines, classes and Web sites. Successful Writing, now Writer's Digest, is one of the oldest players in the business. Based in Cincinnati at the corporate headquarters of F&W Publications, it still enjoys a circulation of more than 100,000.

"I sincerely believe that we have something to offer a broad spectrum of writers at every stage of their development, from the novice to the veteran writer in every genre," says Writer's Digest editor Maria Schneider.

For anyone who wonders what the emerging writer has faced over the decades, the magazine's files preserved in bulky, bound volumes tell a dual history. Evolution is constant, as technologies from airplanes to computers, and historical events from the Great Depression to the sexual revolution, bring on new markets and genres. But at the heart of the game, the riddle remains: How does one write, and write well? How do you get your writing noticed and sold?

Like the best epics, reading through the pages of Writer's Digest is less about finding the answer than enjoying the questions.

"It's like asking if we're any closer to the great mystery of how one paints a portrait or composes a symphony?" says mystery writer Lawrence Block, who for years contributed a column to Writer's Digest. "Most of the arts certainly are extremely difficult, and there are always more people who want to do it than can do it."

Writer's Digest features interviews, market surveys and general advice. The April issue includes a cover story on vampire novelist Laurell K. Hamilton, updates on such "hot" genres as romance and horror and an essay by contributor Bonnie Trenga, who recommends that sentences run no longer than 40 words because "your readers don't have a very long attention span."

When the magazine debuted, "crook stories" were in, dialect was out and the great new draw was "motion pictures," or photoplays, a business barely as old as the century. The Goldwyn Co. ran an advertisement about its hunt for the "screen's own Shakespeare." An article reported that the "penurious playwright who used to peddle manuscripts" was "probably writing his plays for the motion pictures now, and living in ease."

Gertrude Stein, James Joyce and other modernists were already breaking up traditional narrative and grammar, but in the early 1920s, the marketplace belonged to the straight and the simple.

"A readable, lucid style, is far preferable to what is called a 'literary style.' ... a complicated method of expression which confuses rather than clarifies thought," one columnist advised. A suggestion for nonfiction writers: "One of the surest ways to please editors is for the writer to prove himself accurate."

The market often danced to the tune of current events. In the '20s, the rise of commercial flights resulted in "airplane fiction," adventure stories set in the skies. The repeal of Prohibition, in 1933, led to new opportunities in beer industry journals.

During World War II, romance writers were urged to forget those Depression-era tales of financial peril and were reminded that if a young man wasn't in uniform, the writer had to explain why. At the end of 1945, after the Japanese had surrendered, correspondent Sgt. Donn Hale Munson reported that the "war market" was "shot" and that it was time to "take your hero out of uniform ... and put him back in civic clothes."

The times could change as surely as snow melts in spring. In January 1981, the cover story centered on authors and their typewriters, and revealed that Gay Talese used dental floss for repairs. By April, the magazine was running a long article on word processors. By the end of the year, one article speculated about an "easily accessible database network."

Cyberspace and electronic publishing seemed like science fiction for much of the 20th century, and it took a science fiction writer to catch the future. A 1971 essay by the editor of Galaxy magazine, Frederick Pohl, an award-winning science fiction writer, uncannily anticipated print-on-demand and electronic books as he imagined the market of 2001.

"Suppose you want to read a novel. You type out the name and byline on the keyboard of your teletype, and 'order' a copy of the book. Immediately it starts printing out your personal copy, a page at a time," Pohl writes. "And if you don't care about (having an actual book), you can hang your TV tube over the foot of the bed, have the book displayed to you a page at a time and read it at your ease."

Scandals that seemed new in recent years were around long before. In the 1930s, articles were appearing on plagiarism, ghost writing ("as old as the proverbial hills") and journalistic fakery. In the 1950s, a new genre teen fiction was identified.

If publishing was ever a gentleman's game in tweed, the pages of Writer's Digest were not telling. Books over the decades were compared to breakfast food, chewing gum and oil-burning engines. A columnist in 1930 complained of the "abnormal emphasis being stressed on sex." As early as 1945, the industry was condemned for selling its soul to the gods of publicity.

"Nowadays it is not enough to publish a book; it must be sent skyward like a trial balloon, carrying its banners and famous names," complained Vardis Fisher, an Idaho-based author and newspaper columnist.

Romance and mystery were in demand all along, although trends and publications have come and gone.

In the early '20s, you could try Saucy Stories, which called for "fiction with very rapid action" and a few "clever epigrams" thrown in, or "The Youth's Companion," which "welcomes humor and pathos, but not pessimism." During the Depression, the MacMillan Co. was looking for "realistic, proletarian" novels, while by 1974, in the wake of Watergate, magazines from the National Tattler to The Woman were seeking investigative pieces.

The writer in 1949 looked out on an especially interesting market. Whisper magazine was seeking "sensational material, only with tabloid treatment." Jungle Stories was soliciting stories on "native tribal life or adventures of white men in the jungle."

Both sides of the Cold War were possible: Personal Liberty Magazine sought examples of "the enslaving spirit of Communism, Nazism and fascism." The Kapustkan Magazine wanted fiction "aimed at the evils of war, greed, hypocrisy, secrecy, poverty, injustice, intolerance, inequality and intimidation."

A caution: "Brevity desired."

The market was a code to crack and self-proclaimed experts came bearing solutions, such as J. Berg Esenwein, whose advice "plucks out the heart of magazine writing" and saves much "eye strain" for young writers. Readers of the '20s and 1930s likely heard much about William Wallace Cook's Plotto, "a new method of plot suggestion." Other options included Grace Porterfield Polk's "Polk-a-Dot Primer for Poets" and the Sherwin Cody School of English, presided over by Cody himself, a bearded man with a stern, professorial gaze.

No one was readier to counsel, and console, than Thomas H. Uzzell, identified as a former editor of Collier's and a market watcher whose ads and essays appeared for more than two decades.

In 1931, as the Depression dragged on, he reminded the idle businessman that the empty hours could be filled writing that long-promised book. "Necessity has launched more literary careers then you'd like to imagine," Uzzell observed.

A decade later, soon after the bombing of Pearl Harbor and the U.S. entry into World War II, an Uzzell ad was headlined "WAR! NEW MARKETS! NEW DEMANDS! NEW PROBLEMS! Can you solve them?" Uzzell declared that in "such times only craftsmen, trained writers with editorial insight can survive. Escape and propaganda must be combined."

The famous, too, have prescribed. Somerset Maugham, in a 1942 essay, thought hospital doctors were ideal writers because they have seen human nature "bare" and frightened. Fifty years later, Stephen King urged against writing outlines, even as the magazine itself touted a system of plotting with index cards. Michael Crichton believed that you should get published first, then worry about an agent.

All agreed that the only way to become a writer was to write. The prolific John Updike recommended steady work habits, while Michael Chabon said nothing was possible without "talent," "luck" and "discipline." And in the early 1920s, a promising young short story writer offered a terse formula for success after a less fortunate peer sought help on how to develop a plot.

"Your letter was very vague as to what you wanted to know," the author scolded. "Study Kipling and O. Henry, and work like hell! I had 122 rejections slips before I sold a story."

The author, F. Scott Fitzgerald, was not easily discouraged.

Death of Print? Not at News Corp in Britain

Death of Print? Not at News Corp in Britain
News International unveils 'biggest printing plant in the world'
By Patrick Smith
Journalists at News International's four national newspapers will face wide-ranging changes when the company moves all printing from its Wapping headquarters in April.

At a tour of the company's new £187 million Broxbourne plant in north London today, the company's senior management said that the latest in automated printing technology would give journalists later deadlines and editors greater freedom in redesigning pages.

News International claim the plant, just off the M25 near Enfield, is the biggest printing centre in the world. It is part of a £650m initiative including plants in Knowsley, near Liverpool, and Motherwell, near Glasgow.

The "triple-width" printing presses can produce tabloid and broadsheet newsprint simultaneously, meaning that many traditional editorial and printing deadlines could be scrapped.

Clive Milner, News International's group managing director, told Press Gazette: "It affects the process of journalism in a number of ways. It allows the editors to refresh and redesign the product and that's good news for readers.

"Our current products are in some cases constrained by the production, this is changed by Broxbourne."

The Sunday Times, which currently begins printing on Wednesdays, could now be printed entirely on Saturday, he said, putting sections like business into a "live" slot.

The Broxbourne plant is the size of 23 football pitches, it has 12 full-colour printing presses capable of printing 86,000 copies per hour - the equivalent of 330,000 tonnes of newsprint a year. Wapping managed 36,000 copies per hour.

Automated, pre-programmed computer technology - including laser-guided trucks and conveyor belts carrying rolls of paper around the vast factory floor - mean that printing staff are to be cut by two thirds making the company an estimated annual saving of £13m.

James Murdoch, the chairman and chief executive of News Corp's Europe and Asia division, said the investment "should be ample answer to those who believe the business of journalism, in print, is a business for yesterday's readers, not tomorrow's."

He continued: "At News, we believe that print will continue to be a driving force, even as we expand in this connected age."

The Sun is already being printed at Broxbourne. The Daily and Sunday Telegraph will begin printing from Broxbourne late this year.

NI is currently looking for a new home for its editorial staff. A sale document for Wapping has been issued to potential buyers but no potential site has been mentioned by the company so far.

What Went Wrong with the Postal Rate Hike?

What Went Wrong with the Postal Rate Hike?
Nothing, says Time Inc.'s mail czar.
By Jim O'Brien
http://www.foliomag.com/2008/what-went-wrong-postal-rate-hike


Recent data from the Postal Service indicate that Periodicals Class mail only covered 83% of its costs in fiscal year 2007. This news comes on the heels of the "cost based rates" that went into effect last July and were designed to reduce the Postal Service's costs. Many people in the industry are now wondering "What went wrong?" The answer is that "nothing went wrong," once three basic facts are understood:
Since the new Periodicals Rates went into effect on July 15, 2007, the USPS' data only reflected 2-1/2 months of mailing under the new rate structure (the USPS fiscal year ended on September 30, 2007).

In an effort to mitigate the impact on smaller mailers, the July, 2007 rates only reflected 40% of the actual bundle and container costs. As a result, mailers did not receive accurate pricing signals and some companies actually reduced the number of drop-ship entry points. This reduction resulted in increased USPS transportation costs.

Many mailers focused 100% of their attention on implementing the new rate structure and spent very little time reviewing their mailing practices an implementing changes in 2007.

As a result of these three factors and others, the Postal Service did not reduce its costs in FY 2007. With this as a backdrop, the question now becomes, "Will the new rate structure have a positive impact on Postal Service costs in 2008?" To drive costs from the system, mailers need to make changes. Here are a few changes that are taking place at one mailer and in the printing industry.

Time Inc. is making a number of changes to its mailing behavior and these adjustments may be of use to other publishers. For starters, each title has been analyzed to determine if all or a portion of its circulation can take advantage of co-binding, co-mailing, and/or co-palletization. Today, six Time Inc. titles participate in co-mail pools and the company will soon begin to co-mail a portion of their large circulation monthly magazines. Most people think that large circulation titles are not good candidates for co-mail because they have little to gain in presort improvement, but that perception may soon change.

Todd Black, Time Inc.'s assistant director of postal operations, working in conjunction with Brown Printing and Time customer service, has developed an innovative plan for Essence magazine and other large circulation monthlies. It begins when Time customer service determines Essence's presort. The label data for the carrier route copies is sent to Brown Printing in its usual fashion and the copies are produced using selective binding. Following production, the carrier route copies are included in Fairrington Transportation's co-palletization pool and drop-shipped. Essence also has a number of copies that do not lend themselves to co-mailing (polywrapped, personalized wraps, etc.) and these copies are also included in the co-palletization/drop-ship pool. The balance of the non-carrier route labels are not presorted and customer service produces a SLIR file that is transmitted to Brown for inclusion in their co-mail pool. After manufacturing (using conventional binding) the copies are co-mailed, entered into the Fairrington pool-shipping program, and drop-shipped to 96 ADCs. As a result of this combination of co-mailing and co-palletization, virtually 100% of Essence is drop-shipped with very few sacks and a significant presort improvement.

Time Inc.'s weekly titles have also been reviewed and improvements have been made. Since these weekly magazines have large circulations and carrier route percentages in the 75% to 85% range, there is little opportunity for co-mailing and drop-ship improvement. However, certain editions of the magazines do quality for co-palletization. The best example of this is an edition of People magazine that is produced in one plant for a national distribution. Prior to the implementation of the new rate structure, this edition was placed in sacks and entered into the postal mail stream at the printing plant. Today, these copies are included in the Fairrington co-palletization pool and drop-shipped. As a result, these copies have shifted from "100% sacks and zero drop-shipping" to "nearly zero sacks and 100% drop-shipping."

In addition to the co-palletization, Time magazine co-binds its Life and Style supplement along with its regular issue four times per year. Entertainment Weekly will co-bind a special issue along with one of its regular issues in May.

When the changes have been completed on the Time Inc. magazines, Black estimates that 23 Time Inc. titles will be using co-mail or co-palletization for all or a portion of their print order. Black states that, "There are cost savings out there for everyone, regardless of your size or vendor. My advice to other mail owners is to dig deep into each mailing to find what portions you can better presort and drop ship right now. For the portions that can't, ask why and keep asking why until each mailing is optimized."

In addition to the changes being made by the Time Inc. titles, the printing/logistics industry is opening new co-mail facilities and adding new machines to handle a wide variety of products. Black recently visited the new R.R. Donnelley & Sons co-mail facility in York, Pennsylvania. In response to increases in customer demand, Donnelley already has expansion plans for this new facility. York complements Donnelley's existing facility in Bolingbrook, Illinois.

In March, Black will visit the ALG Worldwide Logistics facility also located in Bolingbrook. ALG is a logistics firm that provides co-mailing and drop shipping for the print industry.
Quad/Graphics has developed a multifaceted program that now includes: Multi-Mail (co-mail); Multi-Wrap (offline for poly wrapped Periodicals); Multi-Bind (co-binding); and Multi-Blend (inline combination of previously bound Periodicals with magazines that are being bound). These options provide a great deal of mail-piece design and production schedule flexibility for their clients while still creating volume that maximizes presort and drop ship efficiencies. Quebecor World Logistics continues to invest in solutions that will enable them to co-mail a greater range of product (specifically thin and poly wrapped mail pieces). By the end of 2008 they will double their capacity with new state of the art co-mailers.

Fry Communications in Mechanicsburg, Pennsylvania is now offering its customers onsite co-mailing, selective binding, blended mail at the mail table level, and co-production (co-binding). Fry reports that they are seeing substantial growth in the number of copies co-mailed and increasing interest from clients who previously were not interested in taking advantage of the reduced distribution costs. In addition, Fry now has customers who use them as a co-mailer but not as a printer. As Fry's pool size increases, the opportunity for savings increases as more copies move from a 3-digit sort level all the way to carrier route presort.

If the changes at Time Inc. and the printing/logistics industry are representative of more global Periodical Class change, we will most likely see a significant reduction in Postal Service costs and a corresponding improvement in cost coverage throughout 2008. Such changes will go a long way toward keeping Periodicals Class mail well within the CPI rate cap in future years.

Mags Grow Online but Still Dwarfed by Web Bigs

Mags Grow Online but Still Dwarfed by Web Bigs
Titles Have to Face up to the Scale of the Competition If They Expect Larger Share of Digital Ad Revenue
By Nat Ives
NEW YORK (AdAge.com) -- When the magazine industry turned out for its latest digital conference last week, no one doubted the importance of the web. But now that they've moved online, many major magazine publishers are finding themselves nobodies in the new neighborhood, overshadowed by digital brands like Yahoo, MySpace and Huffington Post. So how much of the internet's growth can magazine brands snare for themselves?

CNN Gives Biz Sites Run for Their 'Money'
Now With Online Video, CNNMoney.com Is a Bigger Threat on the Web

The signs so far have been discouraging. Consider the recent good word from the Magazine Publishers of America. Consumer magazine sites attracted 67.5 million monthly unique visitors in the fourth quarter last year, it reported, up 8.1% over the fourth quarter a year earlier.

That's great if publishers only want digital companions for their core print properties, to recruit subscribers and provide a little inventory for integrated ad buys. If they also want to leverage their magazine brands to get meaningful online ad revenue, however, they have to face up to the scale of the competition. And YouTube draws at least 67.5 million unique visitors all by itself, according to Nielsen Online.
"Do I think the web will cannibalize from print magazines?" said Christopher Johnson, VP-content and business development for Hearst Magazines Digital Media, in an interview last week. "Yes, I'm afraid I think so. The question is: Do you want those dollars that are shifted out of print into online to be absorbed by your company?"

Scale and inventory

The most popular magazine-brand websites are becoming real businesses because they have scale and, therefore, the inventory to offer advertisers. They include the sites for Sports Illustrated, with 6.6 million unique visitors in December, per Nielsen Online; Forbes, with 6.5 million; Time, at 6.3 million; Newsweek, at 5.9 million; and People, with 5.3 million.

But brands that span media hold their own much better against the rest of the web. ESPN, the mega-brand attached to cable TV, magazines, mobile and radio, attracted 19.1 million uniques to ESPN.com in December. Still not YouTube numbers, but considerably better than the standalone magazine sites.

A foothold in TV doesn't hurt; CNNMoney.com, where Time Inc. houses Fortune and Money magazines, scored 7.1 million unique visitors in December, Nielsen said. Martha Stewart's eponymous site, part of a multimedia spread if ever there was one, got 2.1 million. And there are the united-we-stand Condé Nast portals such as Epicurious, where Gourmet and Bon Appetit content helped grab 4.2 million uniques.

The vast majority of titles, however, can't attract enough eyeballs to top Nielsen Online's cutoff for measurement. Fewer than 10% even draw as many people online, where their content is free, as they have paying offline, according to Format, a magazine consultancy. The industry, in fact, averages 0.3 uniques per paid print copy.

"There are . . . . examples of sites that are very profitable," said Bob Davidowitz, the former publisher of In Touch and Life & Style, now a partner at Format. "You're seeing a number of other properties with a lot of velocity and growth."

Adding software

"They need to be thinking about, 'Now we're in a really different kind of business,'" said Jeremy Davis, another Format partner. "It's not just Madison and Vine, it's Madison and Vine and Silicon Valley. 'What is the software that's going to get our readers engaged?"

Christopher Johnson, VP-content and business development for Hearst Magazines Digital Media

Fast Company has put its muscle behind that approach, overhauling its site last month to add tons of community functions. Readers-turned-members can contribute blogs, take up questions from the editors and communicate with other readers.

Hearst's digital unit, formed less than two years ago, has recently forged a bevy of partnerships to help catch any spending that shifts out of print, Mr. Johnson said. Two weeks ago Hearst announced a deal with YouTube to develop magazine-branded channels and share the ad revenue. It signed up, along with Condé Nast and Time Inc., to provide content for a site called AOL Home. And last week Hearst said it will help feed Yahoo Buzz, a site allowing readers to vote articles up or down.

"We've decided our strategy is to partner with all these guys," Mr. Johnson said. "I think of them as the equivalent of the Wal-Marts and Barnes & Nobles: great places to put our titles and content in front of millions of people every day."

"If one side is, 'do I want a companion site,''' he added, "the other side is 'do I want my digital media strategy to be a business in itself, to live and die based on its ability to exploit the medium using the brand?'"

Booster shot for Men's Titles

Booster shot for Men's Titles
ShortList and Sport are now the largest magazines
By Heidi Dawley
After several ferociously competitive years and declining circulations, Britain's men's magazines have just gotten a real boost. Circulation has rebounded for the category.

"The men's market was up something like 11 percent," says Dan Pimm, head of print media at Universal McCann's London operation, referring to just-released circulation data. "For the men's market that's amazing."

Now here's the not-so-good news. The gains are being enjoyed not by all titles but by two of the newest publications, and both are free and with hefty distributions, ShortList, an upscale men's weekly, and Sport, also a weekly.

The figures reveal several things, and one is to put the kibosh on the idea that men were drifting off to the internet and away from print titles.

"For those that say men are moving away from magazines and going online, this shows the opposite," says Mike Soutar, ShortList's founder and a former editorial director at IPC, a major UK publishing house.

"If you get the content right, men's magazines have never been more engaging. There has never been a greater number of men's magazines read than today."

But it also speaks volumes about the potential for free magazine in the UK and perhaps elsewhere, including the U.S.

In just the last 18 months, three free titles have launched, two men's and one women's magazine.

Sport, a British reworking of a successful French concept that launched in 2006 as a weekly, distributes 317,209 copies each week in London on Friday mornings.

ShortList debuted in London and five other cities last September, and each Thursday it hands out close to 500,000 copies. ABC figures for second-half 2007, its first audit period, show that ShortList averaged 462,731 copies a week. It aims to reach 500,000.

Shortlist and Sport are now the two largest circulation men's magazines in the country.

"We are seeing a real shift in the way consumers expect to engage with the men's magazine market," says Soutar. "Before there was only one route--to choose from the newsstand. Now we are seeing a small amount of cannibalization but also a lot of new readers in the market."

Earlier this month, Dare, a women's monthly, went free, upping its distribution to 750,000. It's handed out at London tube and train stations.

While it's too early to judge Dare's impact on the women's category, that cannot be said about ShortList and Sport. They appear to be doing some damage to the paid-for weeklies.

Circulation at Bauer Consumer Media's Zoo was down 12.5 percent, to 179,006 from July to December 2007 compared to the same period the year before, while IPC Media's Nuts was down 8.5 percent, to 270,053.

ShortList and Sport solve a problem for marketers by offering the sort of mass distribution that was difficult with paid titles. As Alan Brydon, head of press communications at Media Planning Group, notes, most existing men's titles were either too small or their content too salacious for a lot of advertisers.

While Brydon worries that a big chunk of ShortList's circulation may be going to those outside its target demographic--the title is handed out at stations to men who look to be of the right age--he says it still amounts to a big magazine in the men's market at the moment, making it worth using.

For his part, Soutar says the readership study they commissioned showed that 86 percent of readers are men and 82 percent fall into the affluent bands they are targeting.

Both titles say they think their concepts could work in other countries.

What Are You Worth in a Free Economy?

What Are You Worth in a Free Economy?
Chris Anderson Explains How 'Freeconomics' Will Change the Media World
By Nat Ives

Chris Anderson's book "The Long Tail" described the rising potential in niche media -- enabled by plummeting digital-storage costs -- and predicted a declining reliance on blockbuster media. In his first (as yet untitled) book since then, Mr. Anderson, the editor in chief of Wired magazine, plans to crystallize the implications of doing business when the cost of products, services and storage is falling rapidly toward zero.
Wired's new issue is free .. sort of. You still have to pay for the mag.

"'Free' shifts the economy from a focus on only that which can be quantified in dollars and cents to a more realistic accounting of all the things we truly value today," he writes in a forthcoming Wired cover story previewing the topic.
That's not to say Wired's growing print circulation is about to become free for readers, or that Wired didn't happily pocket every new penny of revenue when ad pages edged up 5.6% last year, according to its estimates.

It does suggest, however, that media companies and their advertising clients might rethink their strategies amid growing competition from the sector called "free." In an interview ahead of that cover story and Hyperion's planned book release early next year, Mr. Anderson told Ad Age what's coming now. We edited lightly for space, which still has a cost attached to it for Ad Age.

Advertising Age: Give us the broad strokes on "freeconomics." What's free, for whom and why?

Chris Anderson: When you think about it, there really are three kinds of free. There's the free we've known forever, which is the King Gillette razor-and-blade model, which is a form of cross-subsidy. A spin-off of that model is the media model, where the product is free because it's subsidized by the advertiser. That's called a three-party market -- the publisher, the advertiser and the consumer who gets everything for free.

The second kind of free is this weird kind of the free that's never existed before, simply because cost goes to nothing. Moore's Law said processing would get cheaper every year, but there are corollaries for bandwidth and storage. As the price gets closer and closer to zero, you can eventually just treat it as free.

Hotmail started with a tiny amount of storage for free and then you had to pay for the rest. By 2000 to 2002, you were getting more. Then Gmail said, "We're going to give away one gigabyte for free," and revolutionized the market. Yahoo said, "We'll give them infinite storage. We'll use that to reinforce people's connection with Yahoo and make the money somewhere else, maybe banner ads on Yahoo News, maybe just the information you get from people's user behavior that allows you to charge more for ads."

The third model of free is the gift economy. This is what used to be called freaky, Berkeley, hippy-commune stuff and now is the basis for Wikipedia, the blogosphere, Craigslist. There is a real economy out there that is motivated by nonmonentary consideration such as reputation, attention, expression -- all the social incentives that are turning out to be incredibly effective in getting people to do things for free. Before we didn't have a platform on which they could work.

Ad Age: If everything is getting closer to free, why did the cover price on all my celebrity-gossip magazines just go up?


Mr. Anderson: Magazines are in the essentially free business. At Wired, we charge $10 a year for a subscription when the actual cost to us is more than 10 times that much. So why do we charge anything? We charge a nominal fee simply as a psychological fee that shows that you want it -- which allows us to charge advertisers more. A single penny does it. We charge $10 because we don't want to devalue the product, because that would be sending the wrong message. But from our perspective it's essentially free.

Ad Age: Which media companies or marketers win with free, and which lose?

Mr. Anderson: Obviously you don't want to compete with free. If your economic model doesn't let you get to free but your competitor's does, you're fighting a very powerful proposition. If you are selling software and some other company decides to make that software a free service, Microsoft Office is going to be more and more competing with online word processors. That's a wake-up call for Microsoft.

Music labels are the best example of an industry threatened by free. They're in the selling-discs business, the selling-songs business. Obviously the newspapers are dealing with Craigslist. Newspapers charge for classifieds; Craiglist runs them for free. We know how that story ends.

Advertising is a very interesting question. Right now the agencies are competing with cheap. Google can serve very small advertisers who can't pay for big agencies. There's going to be more and more advertising forms that are free to somebody. Advertising isn't the victim of the free economy; it's the engine of the free economy.

One of the biggest issues is it's not all about advertising. Advertising pays for a lot and will pay for more, but there are many other models such as premium, cross-subsidies that are not based on ads.

Ad Age: You discuss the effects of abundance in your article. What happens when we get to play with bandwidth and storage that's free or nearly so?


Mr. Anderson: The best example of this today is YouTube. We focus on the viral hits and phenomenons and the most popular videos. As a Long Tail guy, what's really interesting about YouTube is the extent to which we waste the bandwidth and storage for passing around videos that are of interest to, like, three of us. It's YouTube, not Viral Tube or Lonelygirl15 Tube. It's not about quality; it's about relevance and focus. It's about being incredibly targeted on narrow interests.

Ad Age: So how does a "freeconomic" media model affect or interact with the Long Tail?

Mr. Anderson: The Long Tail is all about infinite choice. If you can give people infinite choice, you can discover the latent demand for products of niche appeal. Infinite free shelf space was essentially the enabling factor. It was simply by being able to be indiscriminately, profligately wasteful that we are able to discover the demand for niche content.

Chris Anderson, editor in chief of Wired magazine

What we're discovering about the world of the narrow, of the specific, of the niche is that's where people's engagement is the highest. That's where they care about stuff. We have relatively superficial engagement with mass products and relatively deep engagement with niche products. As you go down the tail of popularity, people will pay more to reach narrow audiences than they will to reach broad audiences. You can sell things for big money; you can charge more for advertising.


The world we live in -- a mass-market, commodity, cost-per-thousand market -- is very interesting to compare with the hyper-local. There's a site on Seattle-geek parenting -- you would say that's pretty narrow. We asked what their CPMs are. They said: 'We don't calculate that; we have local merchants who will pay us a few hundred dollars.' If you work it out in CPMs, they're paying $100 per thousand.


A site on Seattle-geek parenting is only possible because the cost of production is zero and most of the labor is donated.


Ad Age: Does free empower consumers, whose attention and respect are becoming the media companies' chief asset, or dis-empower them by eliminating the vote-with-your-wallets influence of circulation revenue, subscriber fees and so on?

Mr. Anderson: I'd like to think that getting more for less is empowering. As we shift from the currency being money to attention and reputation, in a sense, the field becomes a relatively level one. We all have attention and respect we can offer. That's a far more democratic access to the marketplace. We all have attention that has some value. As more and more becomes free, we're able to deploy that wherever for whatever. Basically everything is available to everybody -- not necessarily at all tiers and all features, but the walls to entry to products and services are falling faster than ever before.

Ad Age: What's going on at The Wall Street Journal online, which Rupert Murdoch had strongly hinted would go free once he took over but now is slated to retain a walled garden at its core with possibly even higher prices?

Mr. Anderson: Murdoch has to be culturally sensitive to the company that he bought and deftly change it. Ripping out the pay side overnight would have probably been too traumatic. I'm not sure we've seen the end of that story.

It reminds us that the original Stewart Brand quote is "Information wants to be free." The actual quote also says some information wants to be expensive. What he meant was that commodity information wants to be free and noncommodity information wants to be expensive. I could give away my book and sell you speeches, which are targeted. A band does exactly the same thing: commoditize the album and then monetize the performance. What Murdoch is exploring is the difference between a commodity and a noncommodity.

Ad Age: What's your take on micropayments? Edward Wasserman recently asked in the Miami Herald whether journalism could live without ads, imagining instead "a vast menu of news and commentary offered to you ad-free for pennies per item, the charges micro-billed, added up and presented like a utility bill at month's end."


Mr. Anderson: At this point, my opinion is that micropayments have always failed and will always fail. They violate the fundamental law of free. Free is psychologically powerful. Charging one penny ruins the psychology. Asking people to just think for one second, "Is this worth it?" or "How much is it worth?''is often too much.

Ad Age: Will your book be free?

Mr. Anderson: Obviously we're going to walk the talk. The issue is going to be free. Send us your snail-mail address, and we'll send you an issue free

Time Inc. to Make More Cuts This Year

Time Inc. to Make More Cuts This Year
By Seth Sutel, AP Business Writer
Magazine Publisher Time Inc. Will Make More Cuts This Year, Time Warner Discloses in Filing
NEW YORK (AP) -- Time Warner Inc. said in its annual regulatory filing Friday that it expects to cut more jobs in its magazine publishing division in the first quarter, resulting in $10 million to $20 million in expenses.
Time Inc. spokeswoman Dawn Bridges said that the job cuts affected fewer than 100 people, and that most of them had already occurred in various parts of the company. Time Inc. has a global work force of more than 10,000.

Time Warner, whose Time Inc. division includes the titles People, Time, Sports Illustrated and Fortune, said the division incurred $67 million in restructuring costs last year, partly related to the closure of Life magazine.

Time Warner also owns Warner Bros., Time Warner Cable and cable channels including HBO and CNN.

Belt-tightening efforts continued last year across other parts of the sprawling company, resulting in $262 million in restructuring costs as 4,400 employees were terminated. That was down slightly from 2006, when the company spent $295 million as it eliminated 5,600 jobs.

Investors are looking to Jeff Bewkes, who took over as CEO at the beginning of this year, to further streamline Time Warner, which many on Wall Street believe has too cumbersome a structure.

Bewkes said earlier this month that AOL will separate its rapidly declining Internet access business from its online advertising operations, which could prime AOL to be either sold or combined with another online company. Microsoft Corp. had expressed interest in AOL two years ago but has since decided to go after Yahoo Inc.

Google Inc. owns 5 percent of AOL and has the right to trigger a public offering of its stake beginning this July, although Time Warner could opt to buy back Google's stake instead.

Bewkes also said Time Warner would consider whether to keep its 84 percent stake in Time Warner Cable Inc., its publicly traded cable TV subsidiary.

Time Warner, the world's largest media company by revenues, also disclosed in its filing that it paid $125 million in cash for a previously announced purchase of an online advertising company called Buy.at.

Advertisers Will Have to Cut Costs

As Giant Retailers Reel, Marketers Gird for Worst
Advertisers Will Have to Cut Costs to Keep Pace With Changing Consumer Priorities, but Can They Afford to Slash Ad Spend?
By Ad Age Staff
http://adage.com/article?article_id=124972

Even the most optimistic had to stop and take a deep breath last week.

First came the retail industry's January sales, and the gain -- a meager 0.5% year over year -- marked the slenderest growth since "The Brady Bunch" ran in prime time. In announcing its numbers for the month, Wal-Mart made the almost apocalyptic pronouncement that consumers were hoarding their gift cards -- "more often for food and consumables than discretionary purchases." All of that was capped off by a Federal Reserve report that consumer credit-card borrowing was down sharply, along with reports that the credit is more often being used to fund the bare necessities.

So just how sobering is this news for marketers of just about anything beyond food, gasoline and home-heating oil -- and the agencies and media that subsist on their advertising? Ad Age looks at the implications for some of the key marketing categories.

Automotive
More loan defaults, more trading down and deferred purchases might be on the way for the already beleaguered auto industry. Morgan Keegan & Co. analyst Peter Hastings believes that in 2008, 15.7 million automotive units will be sold. If that happens, it would mark the industry's second year of declines; 2007 sales slid by 2.5% to 16.1million units, according to Automotive News.
If consumers need to buy a new car, they will step down in price and size, said Mr. Hastings.

Toyota Motor Sales USA's Bob Carter, group VP-general manager of Toyota Division, admitted that the auto industry will undergo "a lot of volatility in the first four or five months of the year." But, like the majority of other auto executives, he projected a stronger second half. Sophia Koropeckyj, auto analyst at Moodys Economy.com, said automaker finance arms have seen loan-default rates rise since the last downturn in 2001 and she predicted they would be more conservative in lending practices this year.

Package goods
Unilever CFO James Lawrence was perhaps the first industry executive to acknowledge a slowing economy may be having an impact on package-goods. "In the second half of the year, we've seen slightly weaker demand in personal care in the United States," he said on a Feb. 7 earnings call. "There has been some softness in [food-service] channels, but in contrast, we have seen quite strong demand for food products which are used in the home, such as meal kits and side dishes."

Household and personal-care industry sales grew an anemic 0.5% in the four weeks ended Jan. 27, according to Information Resources Inc. data reported by Deutsche Bank. That was better than the decline of 0.9% in December, but still nowhere near the sales increases of 4% in the first quarter of 2007.

As the economy slows, U.S. package-goods players will have to rely on cutting costs for the vast majority of their earnings growth in 2008-2010, Sanford C. Bernstein analyst Ali Dibadj said in a research note last week, though he doesn't expect the knife to hit marketing spending. "Every company in our coverage," he said, "speaks passionately about its focus and ability to cut costs to offset increasing commodities, inflation and marketing spend."

"A lot of people are using gift cards to buy food," said Burt Flickinger, principal at Strategic Resource Group, but "they may be trading up rather than using them to buy pasta and peanut butter sandwiches for dinner tonight. They might buy five or six steaks to treat the family."

Consumer electronics
A move by Americans to buy only necessities doesn't worry the Consumer Electronics Association. "There's certainly a discussion about whether tech today should be considered discretionary vs. necessary," said the trade group's economist, Shawn DuBravac. "Consumers continue to allocate away from other categories for technology." He said it's more likely that consumers will buy cheaper diapers and groceries than cut off a mobile phone or deprive their kids of a computer.


Forecasts for 2008 -- from CEA and other CE researchers such as iSuppli and in-Stat -- bear that out, with predictions of overall electronics growth, albeit slower than last year. Computer analysis from researchers IDC and Gartner predicts similar softer growth in that sector.

"Last year, when oil prices were going through the roof, we saw that people said, 'Since we're not traveling, let's spend some of that money on buying a flat-panel TV,'" said iSuppli analyst Riddih Patel.

But not everyone is buying that argument. "I've found the greatest correlation in PC shipment levels is overall economic indicators of GDP and consumer confidence," said analyst Roger Kay of Endpoint Technologies Associates, and formerly of IDC. "There is some shifting in buying where people who were going to buy a new PC now content themselves with an MP3 player. ... It's the delay scenario that's most troubling. People still want it, but they decide to put it off, wait to see how things go."

Fast food
Two words: value menus. In the next six months, they're likely to become even more important to the nation's biggest chains. "I think you're going to see more options for the dollar," said Darren Tristano, exec VP of Technomic. He added that if consumers are paying with a credit card for their burger fix, it isn't necessarily bad for the industry. "Your check average goes up with credit-card purchases."

Gift-card purchases were up 16% at Starbucks during the first quarter ended December 2007. Reloads were also up 12% during the same period. Spokeswoman Tricia Moriarty said some customers use its gift cards to keep spending under control. "The reload feature can be an effective way to help people ... enjoy their daily latte while maintaining their budget."

Retail
"Marketers are doing the one thing that they should not be doing right now," said Zain Raj, global practice leader-retail brands at Euro RSCG. "They are out there trying to promote and discount their way to growth. When you have a consumer-confidence issue, it's not about spending less money, it's about spending any money. Marketers need to say 'Here's why you need these things.'"

"You've got to play offense. Now is the time to be aggressive and go out and get market share," said Mike Boylson, exec VP-chief marketing officer, J.C. Penney. The retailer remains committed to the biggest launch in its history later this month, an exclusive brand created in partnership with Polo Ralph Lauren called American Living that will be supported with a splashy campaign debuting during the Academy Awards.

Others are trying to do more with less. ""People are going to have less disposable income, so that's going to change the way we do advertising," said Jose Docabo, senior advertising manager for Home Depot. "We're also going to have to get more creative with less budget."

"Retailers need to take part of their budget and block and take part of it and experiment," said Ric West, exec VP-marketing promotion and production at Sears Holdings.

Telecommunications
Bad economy or no, telecommunications marketers can't afford to trim back $5 billion in spending with cable companies breathing down their collective necks. "We could see more aggressive advertising by cable companies trying to drive customers to their all-in-one plans," said Ross Rubin, directorindustry analysis at NPD Group. He added that consumers may switch plans to take advantage of promotional offers.

It's also possible consumers will drop optional services that tend to run up phone bills, such as call waiting or caller ID, and some may be pushed to consider lower-price options to long distance, such as phone service provided over internet connections.

On the wireless side, a downturn could fuel acceleration in the growth of prepaid-wireless services, primarily for those who can't meet credit requirements for post-paid plans, said Roger Entner, senior VP-communications sector, IAG Research. Yankee Group estimated the number of pre-paid wireless customers will grow from 41.8 million last year to 61.7 million in 2011. Among the phone companies that would benefit from the shift would be TracFone, Boost Mobile, and AT&T pre-paid products such as the Go Phone.

The Coming Ad Revolution

The Coming Ad Revolution
By ESTHER DYSON
Wall Street Journal Page A18
While the big news in the online world focuses on Google, Yahoo and Microsoft, a more profound revolution is taking place on the online social networks: The discussion about privacy is changing as users take control over their own online data. While they spread their Web presence, these users are not looking for privacy, but for recognition as individuals -- whether by friends or vendors. This will eventually change the whole world of advertising.

The current online-advertising model will become less effective, even as it gets increasingly sophisticated. New players are emerging to devalue the spaces that the ad giants are currently fighting over. Companies you've never heard of called NebuAd, Project Rialto, Phorm, Frontporch and Adzilla are pitching tools to Internet service providers that will enable them to track users and show them relevant ads. This approach (called behavioral targeting and already in service by ad networks that track users through so-called tracking cookies) undercuts traditional online publishers, who employ content to lure users and to sell adjacent ads. Now, the ISPs can sell advertisers direct access to the same users.

Take user number 12345, who was searching for cars yesterday, and show him a Porsche ad. It doesn't matter if he's on Yahoo or MySpace today -- he's the same number as yesterday. As an advertiser, would you prefer to reach someone reading a car review featured on Yahoo or someone who visited two car-dealer sites yesterday? His identity is still private: The ISP and behavioral-targeting networks don't know 12345's name and don't care. They just know what they think he wants.

This market will get more competitive, and users will be barraged by ads to which they will pay less and less attention. Call that public space, a world of billboards and cacophony. Even though the ads will be more "relevant" than ever, users will increasingly tune them out.

Now consider the new world of social networks. Facebook, unwittingly or on purpose, has been teaching people to manage their own data about themselves. Facebook's launch of the Beacon service -- which informs Facebook of members' activities (i.e., purchases) on other sites -- was a PR fiasco. But it still familiarized millions of users with the notion that they can control information about themselves online -- and determine to whom it is visible.

What might seem like a horribly complex and tedious task to their elders -- categorizing "friends," managing news feeds, handling intersecting communities of contacts -- feels natural to the Facebook users of today. They want more granularity of control, not less.

Each user determines who will get into his own garden, whether friends or vendors. Look at Dopplr (where I plan to become an investor), a site for travelers. I list my trips, and see how they intersect with my friends' itineraries. "Oh, we'll both be in London April 4? Let's get together!" Or, "Juan and Alice will be in town next Tuesday. Let's hold a dinner!" You can imagine or visit equivalent approaches for books (a hypothetical Amazon 2.0, new and more personalized), clothes (Glam.com and Stardoll.com), and even money management.

So what's the business model? I'll "friend" British Airways, which will say, "We see you're going to Moscow next month. Why not fly through London and we'll give you 10,000 extra miles?" I'm no longer in a bucket of frequent travelers, my privacy protected. I'm an individual with specific travel plans, which I intentionally make visible to preferred vendors. British Airways, of course, will pay Dopplr a handsome sponsorship fee to be eligible to be my "friend" (just as a Nike rep might pay to sponsor a basketball game and be part of the community). Someday NetJets may show up, offering to ferry me and my friends to a conference we'll be attending together.

I'm far more likely to respond to BA or NetJets within a trusted site, and for a specific offer, than I am to heed their ad while reading a newspaper article on the troubles in Russia. (As for Orbitz, my old standby: After five years, it still doesn't acknowledge my preferred airlines.)

The new model creates a more trusted environment for reaching high-value, frequent purchasers, whether of airline tickets, electronics, clothes or other items. Where does that leave the less-frequent purchasers? Probably looking to their friends rather than to advertising for advice. I'm an expert on travel; my friends may look to me for hotel choices. When I'm in the mood to buy a book or a new computer, I'll check out what my friends on Facebook are doing.

This does not mean that traditional online advertising will go away, just that it will become less effective. Value is being created in users' own walled gardens, which they will cultivate for themselves in real estate owned by the social networks. The new value creators are companies -- like Facebook and Dopplr -- that know how to build and support online communities.

Ms. Dyson is an investor in companies including 23andMe, Eventful.com, Meetup Inc., WPP Group and Zedo

Sweating Bullets in Magazineland

Sweating Bullets in Magazineland
Unfortunately for independent, midsize companies, the new year is turning ugly early
by Jon Fine
It's barely February as I write this, but already 2008 is making brows sweat in Magazineland. Paper prices are skyrocketing, advertising is sluggish, and recessionary fears loom. Wal-Mart (WMT) booted hundreds of magazines out of its stores, which won't help newsstand sales. Nor will magazine wholesalers' ongoing campaign to reduce the volume of copies they distribute, so that they can increase the percentage of copies they actually sell. "Everything that's going up is not supposed to be going up, and everything that's going down is not supposed to be going down," cracks a mordant senior executive. Plus, oh yeah, that Internet thing. Virtually all publishers are racing to invent or buy digital strategies after previously neglecting that part of the business.

This year's stresses are likely to hit the independent, midsize companies of the sector first. These guys are not huge enough to spread challenges across a business notching north of a billion in revenues, nor can they hide within a parent company's multiple companies, as Hearst Magazines or Time Warner's (TWX) Time Inc. can. But they rely on titles big enough to be exposed to macro advertising trends, to which small, niche companies are relatively immune. Rodale and American Media, which post annual revenues around $625 million and $475 million, respectively, are very different companies in very different situations. But they're both still likely to feel the changes in this year's barometric pressures earlier than their bigger brethren.

LITTLE ROOM FOR ERROR
American Media is heavily dependent on supermarket tabloids like the National Enquirer and Star. Rodale bet early on what we now call "wellness," in a move that proved fortuitous, and has hit big with the magazines Men's Health and Prevention, which it founded in 1950; it's also had the fortune to publish The South Beach Diet book. Rodale is a family-owned company, run by President and CEO Steven Murphy. American Media, backed by Thomas H. Lee and Evercore Partners (EVR), has been run since 1999 by magazine veteran David Pecker. American Media's financial results are solid on the surface, but it's been rocked by earnings restatements. It has also, quite simply, not delivered for its investors, and underperformed many of Pecker's promises of revenue and profit levels, even while its fiscal year, which ends March 31, looks notably better than the previous one. Rodale's profit was less than $25 million in 2007, according to two executives who viewed financial data, a low figure for a company whose overall ad pages last year surged around 15%. They are thus two companies without much apparent margin for additional spending at a time when competitive vicissitudes require just that.

Murphy disputes this, saying '08 will be a year in which newish, in-the-red magazines Women's Health and Best Life will turn toward profitability. "I would be more worried if our investments were not working," he says. That three high-level executives have departed since December-one remains a part-time adviser-has raised concerns about cost cuts. But Murphy denies the moves were motivated by such concerns, and a spokeswoman says new hires are imminent. (Pecker's spokesman declined an interview request.)

American Media and Rodale both sought buyers in 2007, although Rodale truncated the process abruptly, say executives who were involved. A long-discussed deal between American Media and Source Interlink (SORC), a Ron Burkle concern that owns a major distribution arm and a set of enthusiast magazines, appears dormant. Pecker's five-year contract, which expires in April, will be extended a year, says a spokesman, a vote of confidence that, given industry chatter, may surprise observers. (Two senior executives employed elsewhere report knowledge of conversations in which American Media's owners discussed replacing Pecker around a year ago.)
These observers may search for other clues from these companies that the outlook for magazines is souring faster in '08. Look for a quick, quiet round of layoffs. Look for small-bore magazine or asset sales. Look for sudden ad dips at cornerstones such as American Media's Shape or Rodale's Men's Health. Look, in sum, for 2008 to decide whether the midsize, privately held players can still thrive as standalones in a stagnant or shrinking world.

For Jon Fine's blog on media and advertising, go to www.businessweek.com/innovate/FineOnMedia
Fine is BusinessWeek's MediaCentric columnist and Fine On Media blogger .

Things aren't so bad at the newsstand

Things aren't so bad at the newsstand
For all the shakeout talk, celeb titles are holding up
By Diego Vasquez
The Audit Bureau of Circulations will release numbers for the final six months of 2007 on Monday, and already there's word that circulation for celebrity magazines continues to slow. After years of boom, and the addition of several titles to the category, these magazines are now seeing their numbers either slow or actually fall. Part of that is no doubt due to an increase in cover prices for two of the newer magazines, In Touch and Life & Style, which announced yesterday that they are cutting their rate base. But media people have also begun wondering whether a shakeout is on the horizon, as other categories such as lads, shelter and teen magazines have seen recently. Another issue getting buzz among print buyers as the ABC numbers loom is Wal-Mart's recent trimming of its magazine list, unloading a number of prominent titles from its shelves. The retailer is one of the country's biggest magazine sellers, though the effects of that decision won't be seen until the next measuring period. John Harrington, editor of The New Single Copy, which tracks newsstand sales, talks to Media Life about celebrity titles, Wal-Mart and why things don't look as bad as they might first appear.

Circulation numbers are due out from ABC on Monday, and there are rumors that some celebrity titles, like Life & Style, are going to take a hit. Are we finally seeing the saturation of this genre?

Well, now don't forget that In Touch and Life & Style raised their cover prices by 50 percent, and there's no question that that's going to cause a hit. It's a significant increase. They used to promote their low price, but now that's missing.

My understanding is that In Touch seems to have been hit less and is recovering, and in fact one of their recent issues is one of the best it's had at the newsstand.

I wouldn't ever take it so far as to say we're finally seeing saturation, we may need more evidence to make that statement. Us Weekly has some good numbers, as does OK!. There's a little softness, but nothing outrageous when you consider their positions.

Do you expect a shakeout in the celebrity category?

I don't think there's enough evidence to say the category is ready for a shakeout. It's still the leading category and generates the most sales at the newsstand.

OK! has seen some circulation growth over the last year, though the publication has reportedly lost more than $80 million. Do you think their policy of paying celebrities for their stories will ultimately prove to be a smart one, or is the magazine still in trouble?

They've had newsstand growth the last two periods, despite the fact that they've also raised prices by 50 percent. My understanding is they took a hit at the beginning, but they did some promotion and expanded their coverage, and there is newsstand growth. So that indicates they're starting to find an audience.

Regarding the policy of paying celebrities, everybody's been paying for photos, or something, at some point. How it works into their overall economics I can't tell you. But as far as newsstand goes, their news is good news.


A lot has been made of Wal-Mart's recent decision to cut some titles from its newsstand. Will this have much effect on the magazine industry, or is it a matter of perception being worse than reality?

Well, I think it's less than meets the eye.

They lowered their list by a lot, but there are a couple of things to keep in mind.

First, the remaining titles represent about 98 percent of their sales. So most of the titles that they took off were ones that were deadwood on their list. They either weren't selling or had low distribution. And some magazines had actually been discontinued prior to that time.

So that brings the list down to between 1,100 and 1,200 titles, and that's probably in the same range that larger supermarket chains were already at. So, like I said, it's less than meets the eye.

The other part of that is Wal-Mart, on a broader basis than just magazines, has been on a highly publicized effort that's a part of the whole green movement.

It's certainly an issue for them; three or four months ago they issued a statement to the magazine industry that said they wanted to increase sales efficiency to 50 percent and still increase overall sales by 5 percent. So, that whole reduction of the list falls into that same movement. What they call it in quotes is their "sustainability initiative," and it applies to everything in the store.

At this point there's not a reason to think this will have a negative impact on magazine sales.

What categories have seen the biggest circulation changes, in single-copy sales, over the last few years? What does this tell us about these categories?

To tell the truth, I'm not sure there's been any major shifts.

There's been growth in the women's' categories and some falloff in the men's category, especially if you're talking about the laddies books, but on the other hand I think the other end of the men's business has been pretty solid, so I don't know that it's a notable shift.

Some of the women's service magazines have done well in the last year or two, though a few of the years leading up to that were soft. But that's probably shifted to the more style magazines, like Oprah or Martha Stewart Living.

Other than the continued strength of the celebrity category, there hasn't been any significant overall shifts.

With the number of checkout pockets decreasing, what has been the competitive effect on magazines?

Again, I'm not sure there's a significant falloff in checkout pockets.

Some people in the business may actually say there's too much in checkout, as in there're too many choices. Now, there are some things going on where other products are getting aggressive about checkout space. But I'm not sure that's really taken hold yet.

If you look at the numbers on most of the magazines that are considered checkout titles, it's a mix, but I don't think their overall sales have moved significantly over the last four, five or six measuring periods.

Everyone's concerned about it, but I'm not sure there's an overall trend that can be identified.

Diego Vasquez is a staff writer for Media Life.