Sunday, March 30, 2008
BoSacks Speaks Out: Ad Revenues Plunge of 50%
I am about to dive into an old rant. I do it because it is an important concept and because I have almost a thousand new subscribers since I last vented about this subject. Everybody who reads this newsletter knows or should know that I am a magazine guy through and through. So, it's not unusual that I am continually barraged with questions like; "Bo, why do you keep such a strong focus on the newspaper industry?"
I have a dozen reasons why I think it is an important industry to track, not the least of which is my canary in the mine shaft theory. I used to explain this more often to my readership than I do now, and I believe that it has been at least a year since I have done so. I will now attempt to correct that oversight, because I still deem it a very important industry for magazine professionals to track.
Simply put, the newspaper industry has been a forecaster of magazine trends for over 60 years. I believe that the newspaper industry still acts for the magazine industry just like the vulnerable little canaries that coal miners carried into the coal mines in times past. When there was little clean air, the canaries "fainted" first, warning the miners of pending trouble. A similar process could/should be said for newspapers being more sensitive and vulnerable in the publishing world in these times of economic stress and business model upheavals. It is the newspapers who are "fainting" first, months, perhaps years, before the same conditions hit the magazine industry. But make no mistake, it is a very similar mineshaft that we are in. If they are fainting and croaking, we had best pay close attention and know the reasons why.
We all know that many of the old business models have changed. Newspapers and magazines have changed dramatically. Surely, the advertising community has changed in, if nothing else, the many different and new venues to spend advertising dollars in. Not to mention their obsessive search for accountability. Add into that volatile mixture the apparently unstoppable oncoming recession and you have a tsunami media/magazine advertising event.
So, yes, I track the newspaper industry pretty damn closely and only send out a fraction of what I read and know about it.
The newspaper industry is a media brother or sister. We have almost the same genetic code. They are us in different clothing. When they get mugged, we are next in line in the alley. We are in the same boat riding on a very similar platform.
Today's news about the ad revenue plunge is very important. Because newspapers are dailies, they more closely reflect the economy and the insights and wisdom, or lack thereof, of advertising spending. Whatever the trend is going to be, up or down, it is reflected first in newspapers and second in magazines.
With all this off my chest, I still think we are headed for a great second golden age of publishing (information distribution). Yes, it will be different. Yes, our business models will have to change. But if we are smart we will notice that what we can and do still provide is exactly what people have always wanted. They want information. They want information in the form of news or entertainment, or crafts or fashion, or culture or any of a thousand niche subjects. That is what we do best and will continue to do. We just need to be where the information seekers are and provide great content worth reading.
"We cannot live only for ourselves. A thousand fibers connect us with our fellow men; and among those fibers, as sympathetic threads, our actions run as causes, and they come back to us as effects."
Herman Melville (American short-story Writer, Novelist and Poet. Best known for his novels of the sea, including his masterpiece, Moby Dick. 1819-1891)
NAA Reveals Biggest Ad Revenue Plunge in More Than 50 Years By Jennifer Saba Published: March 28, 2008 12:55 PM ET
NEW YORK The newspaper industry has experienced the worst drop in advertising revenue in more than 50 years. According to new data released by the Newspaper Association of America, total print advertising revenue in 2007 plunged 9.4% to $42 billion compared to 2006 -- the most severe percent decline since the association started measuring advertising expenditures in 1950. The drop-off points to an economic slowdown on top of the secular challenges faced by the industry. The second worst decline in advertising revenue occurred in 2001 when it fell 9.0%.Total advertising revenue in 2007 -- including online revenue -- decreased 7.9% to $45.3 billion compared to the prior year. There are signs that online revenue is beginning to slow as well. Internet ad revenue in 2007 grew 18.8% to $3.2 billion compared to 2006. In 2006, online ad revenue had soared 31.4% to $2.6 billion. In 2005, it jumped 31.4% to $2 billion. As newspaper Web sites generate more advertising revenue, the growth rate naturally slows. The NAA reported that online revenue now represents 7.5% of total newspaper ad revenue in 2007 compared to 5.7% in 2006.That growth could not stave off the losses in the print however. National print advertising revenue dropped 6.7% to $7 billion last year. Retail slipped 5% to $21 billion. Classified plunged 16.5% to $14.1 billion."Even with the near-term challenges posed to print media by a more fragmented information environment and the economic headwinds facing all advertising media, newspapers publishers are continuing to drive strong revenue growth from their increasingly robust Web platforms," John Sturm, president and CEO of the NAA, said in a statement.
Thursday, March 27, 2008
BoSacks Speaks Out: The Economy, the Recession and Publishers
We are clearly headed into some dicey economic times. For some of us a recession will create new problems of instability where we are already under stress - from new competitors, the internet, and the demand for accountability. At the same time some of us will not only survive, but will actually thrive and prosper even under the conditions of a recession. How can this be?
There are lots of factors, but I put most of it down to creative management, market position, and stamina. Stamina is the easiest to understand. It is the wherewithal to have dogged determination to succeed.
Stamina is not enough though, you also need the proper market position, which is where you are in the "food chain" of information distribution. Do you own your media segment? Do you have a commanding share of your particular niche? Do you have the best editorial/content? If so, you have the proper market position.
And lastly, creative management. Do you have managers with the wit, the vision and, most importantly, the flexibility to adapt to changing market conditions?
Oh yes, and then there is luck. But a good deal of luck is recognizing any of the above conditions as it is flying by or landing near you. Once there is recognition, there needs to be an action plan to use that luck. And that brings us back to creative management,stamina, and market position.
What do you think?
Shallow men believe in luck. Strong men believe in cause and effect.
Ralph Waldo Emerson (1803 - 1882)
Bad news for Big Media
By John Simons, writer
The Following few paragraphs represent a synopsis of the full article:
As the United States slips into recession, advertising spending is set to fall - spelling trouble for traditional media companies already battered by Internet upstarts.
(Fortune) -- Media industry watchers are no longer debating whether the United States economy is in recession. Rather the question is, "how bad will it get?" If recent trends continue, the outlook is likely bleak for broadcasters, magazine publishers, newspapers, cable operators and the conglomerates that own them.
Advertising spending - the fuel that powers the media and entertainment industries - is poised for a downturn as corporations and consumers grow frugal. Cutbacks in consumer spending are expected to take a toll on everything from Disney's theme parks to Time Warner's magazines and News Corp.'s newspapers, according to analysts.
After some detail the article went on to conclude the following:
Cowen and Company analyst Doug Creutz is preparing for a rougher ride for this recession. "Our industry thesis is informed by our view that a recession in 2008 is likely, and that its impact could be more severe than those experienced in either 1990-91 or 2001," he says.
Creutz does see some companies' weathering and even prospering during a downturn. He likes Viacom's prospects, for instance, because cable networks can rely on subscriber and affiliate fees to help offset an advertising slowdown.
For the complete article: http://money.cnn.com/2008/03/23/news/companies/simons_media.fortune/index.htm
Then Think about this paragraph from the Wall Street Journal
IN THE LEAD
Executives Find Ways To Keep Moving Ahead Despite Economic Fears
By CAROL HYMOWITZ
The collapse of financial titan Bear Stearns last week heightened concerns among executives across industries that the U.S. economy is in a recession. The mess on Wall Street has made it difficult for companies to get financing to do deals; slowed sales of cars, clothing, other consumer goods; and prompted managers to scuttle hiring plans and consider layoffs.
The worst thing business leaders can do, however, is panic, especially because the length and severity of a slowdown is impossible to predict. Here are some management lessons gleaned from recent events to help executives navigate successfully in coming months.
After some details the article goes on the following thought, a great one for all publishers:
Look overseas for growth. The weak dollar and continued growth in India, China and other emerging economics are a boon to small, and some big, U.S. companies with broad global reach. Cleveland-based Horizons, a maker of specialty metals and aluminum, expects overseas sales, which already account for 25% of its revenue, to double this year after also doubling in 2007. The company started expanding overseas five years ago -- first to Western Europe, Japan, Korea and Russia, then to Saudi Arabia, Dubai, Egypt and India.
"We'd be scrambling now if we weren't already global," says Wayne Duignan, director of international sales.
For the complete article:
Sunday, March 23, 2008
BoSacks Speaks Out: Is Dematerialization on your Horizon?
The best part of this article is the term, phrase and concept of "Dematerialization". It truly conjures science fiction and, I think, soon to be real science fact. As the article points out we are not there yet, a fact that my friend Samir Husni, Mr. Magazine, takes great pride and joy in reminding me about. But that joy will be a short lived moment of glee.
This article states:
. . . dematerialization is also how the French refer to the use of technology to do away with paperwork in their everyday lives. That's an idea that might equally belong to the realms of science fiction -- or "littérature d'anticipation," as it's sometimes called here.
For me, I truly don't understand the naysayers. In the last ten years we have digitalized the entire publishing process. I mean everything from key stroke capture through web transmission to digital variable plateless printing presses anywhere on the globe. Is it so hard to think of the next logical step, which is the advent of electronic paper? Look around, it is already here, and commercialized. The only thing left to do next is to improve on the already existent technologies. Do you think epaper is just going to go away? Is there a single reader out there that thinks that epaper technology is at its apex and will not improve ten fold? It will. It is no longer an if or when question, but rather how soon. And the answer to that is in less than five years we will have flexible color-rich epaper. That would be epaper that will be able to reproduce millions of colors, connected to the WiFi environment, and inexpensive.
Does this mean that print will go away? No. The printing press and the printed magazine will still have a long and honorable history. But it does mean a change of business plans and information distribution pathways. And among other things it gives the modern publisher the accountability we have been craving but unable to attain.
If you have a better way of getting a one to one relationship with the reader, I would like to hear about it, and so would the advertising community. It's time to wake up and listen to the buzz as the electrons fly by.
I am Locutus of Borg. Resistance is futile. Your life as it has been is over. From this time forward, you service us.
Captain Jean-Luc Picard -Star Ship Enterprise
Still Seeking a Truly Digital Life
Analysis: The French call it 'dematerialization' but the search for a paperless existence continues to elude even technophiles.
BY Peter Sayer, IDG News Service
Dematerialization: The word has always had connotations of science fiction for me.
When I hear it, I picture the transporter room in the television series Star Trek or the Invisible Man in the novel by H.G. Wells. (Well, I try to picture him ...)
But dematerialization is also how the French refer to the use of technology to do away with paperwork in their everyday lives. That's an idea that might equally belong to the realms of science fiction -- or "littérature d'anticipation," as it's sometimes called here.
Little Progress Toward Paperless
Whatever you call it, the computers I've had on my desk over the past 20 years have done little to deliver on the promise of turning my workspace into a paperless office, and despite the enthusiastic efforts of different sectors of French society, it looks as though dematerialization has had little effect here, either.
In April 2001, the Ministry of Economics and Finance was keen to dematerialize tax forms. Yet the large number of Parisians that I met frantically stuffing their tax returns into the tax office mailbox as the midnight deadline approached suggests that the ministry might have been more popular if it had done away with taxes instead. Suspicion of new technology -- and the risk of an audit -- meant that adoption was slow: Just 17,000 of France's 19 million tax-paying households filed online in 2001, and 100,000 filed the following year. As one of the late-night filers, a graphic designer, told me back then: "If my return goes missing, there's no way to keep a copy for myself to prove what I sent."
That pack-rat instinct is what prompted French company Xamance to launch the Xambox, a gadget it exhibited at the Cebit trade show this month. A cunning combination of hardware and software, the Xambox appealed to me with its promise that I would be able to keep track of paperwork, yet never have to file anything again.
While I had high hopes that the Xambox would beam documents up to some dematerialized filing system in the sky, the reality is more mundane. As documents are scanned, they drop into a numbered box that you then stick in a cupboard. Not so much dematerialized as out of sight, out of mind.
With a combination of optical character recognition and a huge database, the Xambox should be able to show you a scan of whatever document you search for, its makers say. By occasionally dropping a bar-coded divider into the stream of documents to scan, you give the database enough clues to tell you exactly where to find the original document too, should you need it: Box number five, third document after the seventh divider, it might tell you, as you look for the papers to justify last year's tax filing.
Books of the Future?
This week Paris played host to another demonstration of dematerialization, at the intersection of science fiction and finance.
The Salon du Livre, an annual book fair, included for the first time an exhibit entitled "Tomorrow's reading." Amazon's Kindle was there, in a glass case, as was a prototype bi-stable LCD (liquid crystal display), a form of e-paper developed by French manufacturer Nemoptic.
The manufacturers of the iRex and Cybook e-readers also had stands. Their devices were technologically impressive: lightweight, with crisp, readable displays and interfaces that were, for the most part, well thought out.
Cybook had cheekily loaded its demo models with a novella entitled "I, Robot" by online rights campaigner, academic -- and author -- Cory Doctorow. I say cheekily, because although Doctorow distributes much of his work under a Creative Commons license, he has no faith in e-readers, as he explained in a column in the March issue of Locus , a magazine for science fiction fans.
Apart from their presence on the demonstration devices at the show, e-book publishers kept a low profile.
Even daily newspaper Les Echos had real newspapers, piles and piles of them, on its stand, but couldn't show me samples of the e-reader or the e-paper edition that it launched at the show last year.
Publishers at the show said that e-books will cost about the same as paper books. That wouldn't be so bad (the authors and publishers still have to eat), but on top of that they want me to pay for the "e-printing," and the e-readers exhibited cost from €330 (US$520) to €650.
With prices like that, I think I can afford to put off dematerializing my reading habits until tomorrow.
Sunday, March 2, 2008
BoSacks Speaks Out: The following editoral is posted by Noelle Skodzinski, who is one of the finest and hardest working trade magazine editors I have ever associated with. She is representative of a new breed of publishing talent with the determined wherewithal to succeed.
All you other trade magazine editors know exactly what I'm talking about. You didn't create the concept of multi-tasking, but trade publishers have sure honed it to a fine science. It is representative of the apparent need to collapse our work force to its lowest common denominator, combining and condensing skill sets of multiple disparate job disciplines into a single semi-cohesive unit of one - one person now doing the former tasks of many. Can it be done? Yes! But I ask you all, should it be done? Or perhaps better stated, must it be done?
In our industry's zeal for the holy grail of the bottom-most line, how will we know when we have past it? How will we know when we have diminished our workforce to the point that we have diminished the product itself? I have had over the past years hundreds of conversations with editors, publishers, circulators and every other member of our industry. There are many common threads that link people in the same industry, who have never met, to the same conclusions. One of those commonalities is that they are working harder and harder for less and less. And among the less that I make reference to is less satisfaction in the jobs that they hold. There was a time when most publishing employees felt empowered by their jobs and loved being in such a noble and exciting industry. More and more now I get a sense of stress and strain and recognition that in some publishing houses what we produce is more of a cog than a piece of art, more of a mass produced commodity then a unique and valued book or magazine.
Competition is a funny thing. It does bring out the best and worst in people and corporations alike. I suppose that at the end of the day, if under extremely stressful condidtions and a general lack of sustained support and well being, quality will still rise to the top and allow success. This falls somewhere under the addage that those that can will, and those that can't, will fold their cards, thier jobs and thier magazines. In that order.
Retirement kills more people than hard work ever did.
Malcolm S. Forbes
On The Onion . . . and Deviant Reading BehaviorBy Noelle Skodzinski
A recent story from satirical news source The Onion (www.TheOnion.com), entitled "Area Eccentric Reads Entire Book," read:
Sitting in a quiet, downtown diner, local hospital administrator Philip Meyer looks as normal and well-adjusted as can be. Yet, there's more to this 27-year-old than first meets the eye: Meyer has recently finished reading a book.
Yes, the whole thing.
"It was great," said the peculiar Indiana native, who, despite owning a television set and having an active social life, read every single page of "To Kill a Mockingbird" by Harper Lee. . . .
Meyer, who never once jumped ahead to see what would happen and avoided skimming large passages of text in search of pictures, first began his oddball feat a week ago. Three days later, the eccentric Midwesterner was still at it, completing chapter after chapter, seemingly of his own free will.
. . . Over the years, Meyer has read dozens of books from beginning to end, regardless of whether he was forced to do so by a professor in school or whether a film version of the reading material already existed. . . .
According to behavioral psychologist Dr. Elizabeth Schulz, Meyer's reading of entire books is abnormal and may be indicative of a more serious obsession with reading.
"Instead of just zoning out during a bus ride or spending hour after hour watching YouTube videos at night, Mr. Meyer, unlike most healthy males, looks to books for gratification," Schulz said. "Really, it's a classic case of deviant behavior." . . .
After the humor of this story wore off a bit, I began to wonder: How far off is society at large from being in such a state that a story like this is no longer funny, but a horrible reality? I believe so far off that we can still laugh (and will be able to for quite some time) about The Onion's story of Philip Meyer; but obviously there is mounting concern about the nation's reading habits, and I can see why-among other reasons, I seem to question the intelligence of much of the population on a daily basis, especially while driving on the highway or watching the news.
Fortunately, the industry isn't waiting until the Philip Meyer story evolves from satire to widespread truth. The "Get Caught Reading" campaign, sponsored by the Association of American Publishers, comes to mind as one of the more well-known literacy efforts (even Yoda "got caught" reading during 2007's Get Caught Reading Month!). The National Education Association's Read Across America, which launched more than a decade ago, is another one. Of course, there are other national efforts, as well as many, many local efforts.
This year, a new national advocacy effort was launched in January, with the Library of Congress' Center for the Book, the Children's Book Council (CBC) and the CBC Foundation appointing Jon Scieszka as the first-ever National Ambassador for Young People's Literature. Coughing up funds for the effort are a number of major publishers, including Penguin Young Readers Group, Scholastic, HarperCollins Children's Books, Random House Children's Books, Holiday House, Charlesbridge, National Geographic Children's Books, Candlewick Press and Marshall Cavendish Publishers.
Fortunately, Scieszka's perspective suggests that Philip Meyer's story will remain in satire for some time, but he's not leaving that to chance. In a recent interview with Book Business Extra, he said, "I've started a literacy group for boys called Guys Read (www.GuysRead.com). The more research I looked into, [the more I found data that] showed that boys are reading. It's just not how schools define it. It's not all novels. There are other kinds of reading. We should let kids read what they enjoy. There are graphic novels, and a lot of what kids want to read is nonfiction."
I have to say I can relate wholeheartedly to his point and can offer my first-hand perspective on the fact that kids may not be reading what we might expect them to read. My 12-year-old stepson is reading something right now that is definitely not literature. It's not a graphic novel. It's-and I am not being satirical-The Onion's "Our Dumb World: Atlas Of Planet Earth." Must be a classic case of deviant behavior.