A dualistic question that pits ‘print against electronic’ is the wrong approach. The question — and the answers — are far more complex for traditional publishing. Achieving the right multichannel mix for all member communities will be a daunting, but rewarding sea to navigate for established companies.
Newspapers and magazines are challenged in every sense of the word. Web 2.0 has reinvented and will continue to reinvent, the world of entertainment, communities and information sharing. New media portals like Twitter, Facebook and LinkedIn, among hundreds of other community sites have re-engineered how we, as media consumers, access and digest our information. But despite expert analysts’ opinions, print journalism is not dead. To the contrary, actually. Enormous opportunities abound.
One critical idea about how media should work in practice seems dismissed with each and every over-reactive swing of the ‘print-to-electronic pendulum.’ The fundamental concept of successful branding, forged on Madison Avenue over fifty years ago, was based on a simple, clear message expressed consistently in different media forums to the consumer. Billboards, radio, print ads, and the new medium of the day, television, worked in coordination to drive the point of the sponsoring company. That historical model reinforces the common idea of integrated marketing — the buzzwords which never leave any corporate marketing meeting or brand discussion. Multi-channel marketing is an idea that has clearly earned its merit. But too often, print is forgotten as a crucial component of this multi-pronged attack.
As one prominent consultant in emerging media recently told a group of our clients, even in Web 2.0, “it still comes down to ink on paper.” Whether it’s mobile messaging, social media, or another interactive tool, no one will visit or engage the medium if that medium is not promoted appropriately via print communications. Knowing that the printed word is still an important and relevant component of any marketing program, what about print journalism?
We’ve seen the paradigm shift in effect already. By now we understand that specifically, news-organizations — or any printed business operation that relied on speed-to-market delivery — has suffered because of the lack of ability to compete within the “anywhere, anytime” immediacy of digital media. But can other print media companies offer value and capitalize on the idea of the multi-platform, integrated information model? Of course, they can.
Prior to founding IridiumGroup, I worked in consumer magazine publishing. I continued to consult for several years as Iridium began working in brand identity development and implementation. There are three main lessons I have learned from my experience working in, and consulting to dozens of media companies over the last 25 years.
Lesson One
Every model is unique. No one solution can cure an industry because every model, every community — every magazine — is different.
I’ve seen a business model that gave away 1.7 million copies of a magazine, with revenues generated through membership to an online community.
I’ve also seen an organization with a magazine that was strictly subscription-driven with only 8,000 readers, that in certain instances actually turned away lucrative advertising, and was highly profitable. Incredibly, annual subscription dues were over $1,600.
I’ve worked on a publication that had an ABC audited rate-base of 1.5 million readers, with most of that generated through highly desirable, single-copy sale transactions, earning most of their profit on newsstands. The unit manufacturing cost was about $1.25; the retail sale price was about $5.
By contrast, I’ve been inside a successful media company that had subscription-based publications and excellent subscriber renewals, who cared very little about single-copy sales with their publications achieving less than 25% “sell-through” in highly successful retail bookstores like Barnes and Noble and Borders, where even obscure magazines earned 50% or more in yield. And I’ve worked on magazine titles that earned most of their sales from fractional advertising — the bulk of which was very small, 1/12 page, black and white display ads.
So one size certainly does not fit all, when it comes to publishing.
Lesson Two
All successful media companies are based on a community of like-mindedness. No publication ever achieved success or lasted long without a sense of community and affinity of ideas or passions among its readers. Whether it’s a topic of special interest, perhaps a niche genre for enthusiasts readers, or a business trade journal serving one industry or profession, or even a geographical publication that services the local demographic, media has always been a formula that identifies and serves a select group of like-minded customers.
The Challenge Ahead:
Member Communities & Tiered Offerings
Print magazines need to stop thinking in traditional terms and embrace the integrated model, serving the member-community concept. They do not have readership, target audiences, or rate bases; they have member communities. They need to create tiered offerings for those member communities, charging more for subscription driven properties in order to remain viable, if the audience shows enough loyalty for the product. Successful retainers have always applied a tiered pricing model, one that presents many options to a broader range of customers. Surprisingly, traditional publishing has not done this, choosing instead to offer only discounts for multi-year subscriptions. But what about offering the content across multiple channels, with deepening tiers of value to the customer, all offered with varying degrees of price?
The recent failure of a shelter media title, Domino, had many industry professionals questioning how it could happen. From a fast launch and reader-acquisition standpoint, the publication had a highly successful following. And yet, in the great recession, advertising pages and revenues dropped substantially, prompting the parent company to close the title altogether. In fact, I believe they should have attempted a unique proposition that was applied at Ms. Magazine many years ago: Abandon the focus on advertising sales, or change the model so that the business value proposition is not primarily dependent on ad sales; and increase reader subscription and single-copy rates in order to make the title sustainable as a print media tool.
For example, in the case of Domino, the company could have asked readers to pay $29, or even $39 per year, with a VIP access to a select portion of the website for $49 or $59 in total, per year. Within the trade, professional decorators might have jumped at the chance to access proprietary content online.
Any successful retail business has always been about offering many options to the customer and this is where I think that established media companies have missed an incredible opportunity. Even with the unquestionable drop in renewals due to increased annual subscription rates, could the increased revenues have sustained Domino long enough to give its publisher time to explore other channels and revenue streams? We’ll never know.
Paying outright for any online access has been a conundrum for these companies. But understanding the nature of communities and member-based organizations could create a new outlook, and new models for offering the proprietary content that these publishers so value as their core offering. All communities of consumers want options in how they access their desired media or content. They are willing to pay for online access, as long as there is a clear benefit and as long as it is supported intelligently by a print product that does a good job of facilitating reader interests appropriately and working in tandem with other channels.
Rethinking the print and electronic mix will also require a look at customer usability and in certain cases, at frequency of publication. Some print magazines will need to reduce frequency and change the tone of content for the print product. In the same way that news magazines began combating the internet in the 1990′s — by turning their coverage of news into analysis to reflect a longer shelf life and remain relevant — other types of magazines can adapt the presentation of their core content to serve the reader over a 60- or even 90-day span of time.
Lesson Three: Adapting to Meet the Future
One of the great challenges is the third lesson I came to realize about traditional media. That is, as creative as these companies may be in developing the product, in the end, they are still manufacturing operations. Publishing is a business based on formulas, on a direct mail offering that was tested and achieved the proper rate of response among targeted list rentals.
The great, tragic drawback of these organizations are their roots in proven formulas. They are highly conservative, with cultures that are not conducive to innovation. Innovation simply does not mix well with formula-driven environments. When a successful formula is challenged, as traditional print media has been, the cultures are confused and reluctant to change the model. Doing so would risk discarding the very proven, editorial model and consumer community on which the operation was successfully founded.
Every magazine is unique, every audience it serves and the correlating financial model is a custom example of success. But generally, magazine publishers should see themselves not as print manufacturers trying to break into online, reader-paid business models. They also need to relinquish the notion that magazine publishing is a proven model of rate base benchmarks and subsequent advertising revenue.
Instead, they must understand that their readers — their member communities — are golden. As they map out their futures, begin first with the usability of the customer, how the customer interacts with each product and channel and apply the content appropriately. Further, they should note that as print publishing organizations, their member communities have a need that they have filled in large part. But their communities are accustomed to new channels and new tools such as smart phones, websites, email alerts, touch-screen kiosks, event and conference venues. And at times, these communities still want the printed, tactile experience — for the right reason, the proper application.
Learning how to create new architectures that structure the editorial content and integrate the reader usability is the creative challenge. Understanding and applying new models, new channels, and tiered options for reader-driven sales that propel company revenues is just another business goal.
Financial performance modeling computer programs can be designed and built to enable publishers to make clear decisions about how to proceed. After all, each magazine property is unique, and publishers know this.
Which publisher can charge exclusively for membership to their magazine, and which can apply a strategic blend of tiered charges for access to multiple venues? Which should consider a frequency change of the print product to bi-monthly, or even quarterly delivery?
Which can monetize email alerts and mobile messaging successfully? Which can support an exclusive paid-subscription circulation, and which can sustain a tiered-service, paid, member-protected website?
From existing research, data based on customer usability habits for every magazine and audience does exist. Feeding that data into an analytical engine could deliver answers in the form of a customized recipe or mix for content, audience, channel, and frequency — and allows us to understand how best to tweak, and apply the content most successfully to each emerging channel.
This is a desirable, badly-needed analysis for every media property. Therein also lies the potential, proprietary consulting opportunity that will reap handsome financial rewards for the industry.
I’d stake a great deal of money and investment on any computer program that could inform publishers on how to remix their content and create new markets, new channels, and new offerings that are successful at transitioning traditional print models into viable multichannel business operations.
http://www.nytimes.com/2009/10/23/business/media/23newsday.html?_r=1&sq=Newsday&st=cse&adxnnl=1&scp=2&adxnnlx=1256306422-L88/xmToUYJQ1LAb7ZVgEw
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This entry was posted on Friday, October 23rd, 2009 at 8:55 am and is filed under Media. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
