Today, I Only Have Questions

Today, I Only Have Questions
Posted by BoSacks
http://www.pubexec.com/pubtalk/pubtalk.bsp?sid=118726&var=story
Today, I only have questions. What is the difference between Europe and the United States when it comes to publishing and newsstand sales? Why are the newspapers in Europe not only doing well, but on the whole thriving and growing, while ours are gasping for air, with plummeting revenue and circulations? What does the "old" world know about publishing that we here don't?
Why? How? What is the difference?

A "cub reporter" of this newsletter, who is actually a worldly and knowledgeable publisher, recently argued with me on-line on a similar subject that seems relevant to my vent today:
"Professional circulators analyze reader acquisition costs in excruciating detail, with mountains of real-world data. No one can tell why a publisher picked a price, set a rate base, or chose a sales channel by looking at magazines on a newsstand . . . especially in today's incredibly complex and competitive marketplace . . . Publications with good strategies will prosper and magazines with bad strategies won't."

I generously offered to send him to Europe to find out the answers to these questions, but doubling his T&E budget from last year didn't seem to be enough to send him on the important investigative journey. (Last year his BoSacks T&E budget nearly topped $000,000.00)

So I'm forced to ask more questions:

Why are the last U.S. ABC figures reporting such dire domestic results while European magazines are on the whole doing better than we are? Why do European magazines charge almost the same for a subscription magazine as a newsstand title and we practically give away our subscriptions? Is this a holdover from better bygone days or a real, bona fide science that can actually work in the 21st century?

Let's remember that we are talking about the very same product, manufactured in the very same way, but clearly with a different business model. Why are the European sales numbers for magazines hovering around a 60-percent sell-through while we struggle with a low-to-mid-30-percent sell-through?

Let me move on. Why are the reading scores of our domestic youth plummeting? Is there any connection with the fact that text messaging is on the rise while writing skills are plummeting to unconscionable lows? Why is the biggest expense for so many businesses remedial writing for new employees?

None of these questions address the on-going digital dilemma the publishing world is facing. Clearly, we are going to have to remake our industry and redesign our business models including the circulation paradigm. These questions seem to me to be a great start and a part of that process.

There you have it: a dozen questions and not an answer in sight. These are the things that make me, well, wonder just what the heck is going on with our business-and reading in general?

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
http://www.wwd.com/media-news/magazine-circulation-falls-in-half-1706249#/articlehttp://www.wwd.com/media-news/magazine-circulation-falls-in-half-1706249?full=true
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 Oprah.com."

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.

JUST IN: NEWSSTAND DROPS MAGAZINES

JUST IN: NEWSSTAND DROPS MAGAZINES
There's lots of empty space as Michael Bonney transitions his Monmouth Street shop from a newsstand to a convenience store.
By LINDA G. RASTELLI
When Michael Bonney bought Red Bank News in May, it seemed the decades-old monument to print journalism, deemed "a Red Bank treasure" by one regular, would continue much the same as before.
Patrons could still lose themselves browsing the racks of newspapers and magazines that took up most of the shop’s floor space.
But today, what was once a crowded warren of newsprint and glossies is open space that mainly draws the eye to the checkered black and white floor (soon to be replaced by hardwood or linoleum, Bonney said).
The magazine racks are gone, as Bonney has drastically pruned his 500-title magazine inventory, which he's planning to replace with more household items, including dairy products and toiletries.
"It'll be more like Prown's," he explained, referring to the much lamented Broad Street five-and-dime that closed in 2003 and for many residents remains the symbol of a slower, more stable, less gentrified downtown.
Now it seems that the Red Bank News known to generations of customers is also about to begin slowly fading into the collective memory, as newspaper and magazine sales become more of a sideline to its business than its mainstay.
"I do feel bad about it," Bonney told redbankgreen last week. "People are a little bit disappointed, and there's been a few complaints."
Like many other changes wrought by technology, the decline of print media attracts its mourners. But Bonney has found that standing against the tide enacts its toll — in this case, financial.
Bonney, an Asbury Park resident and avid newspaper reader, said he was returning more than 1,000 unsold copies of periodicals monthly. He's also learned in his short time in the business that more people were browsers than buyers.
So as much as he liked carrying the variety of titles, he decided after a painfully slow August that he couldn't continue to stock a product that was unprofitable. Lack of flexibility in working with his large distributor also contributed to his decision, he added.
"People just aren't buying most magazines every month," he said. "They use the Internet, or subscribe, so they don't buy single copies much."
Now, copies of garish gossip magazines and the obligatory Playboys sit at the front counter amid a few lonely looking copies of Discover and the Economist. "I'm just keeping the ones that always sell," Bonney said.
He's still selling newspapers, but not in as great a variety as before. Cigarettes, lottery tickets an snacks remain on sale.
What's next? The store will slowly transition to more of a convenience store, Bonney said, while he tries out new items — household staples such as light bulbs and foods such as eggs and milk.
And how are the old-timers taking it? During all his stops and starts, "people have been very patient and understanding, I want you to say that," Bonney stressed. "I'm learning as I go. These are growing pains."