BoSacks Speaks Out: On the "Incredibly Fragile" Newsstand

BoSacks Speaks Out: In the following article John Loughlin, executive vp, general manager, Hearst Magazines says: 'If the current trends continue, magazines could be facing a time when instead of 1,000 titles, 200 or fewer are on display in stores."

Well, everybody who reads my newsletter knows that I think in the near future the predominant way that people will read will be digitally. But that doesn't mean the end of print. No, not for a long time to come. I think perhaps Mr. Loughlin has forgotten what it is like to be a scrappy entrepreneur. The future will be filled with printed titles, but it won't be the same market that he is used to. Nor will the business models be the same. There will, by necessity, be short run, specialized and, most likely, expensive magazines. But they will be there. It is/will be cheaper to reach the world digitally, but printed products still have life and the entrepreneurs to help maintain their existence.

I have several friends who own magazine printing companies. Recently in conversation with one of them I was asked if I thought his children would be able to continue successfully in the magazine business. Yes, I replied. An efficiently run printing facility will be a good business, with shorter run titles and plenty of make-readies to profit by.

Entrepreneurs and their small enterprises are responsible for almost all the economic growth in the United States.
Ronald Reagan (1911 - 2004)


AMC Notebook: Hearst's Loughlin Calls the
Newsstand "Incredibly Fragile"

And so the conference kicked off, with presenters cataloguing the industry's worries that seemed even more dire than in recent years.
-By Lucia Moses
http://www.mediaweek.com/mw/content_display/news/magazines-newspapers/e3i418b037a2c9b1c0fc5b4000104df2be7
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The American Magazine Conference taking place in San Francisco started its first full day Oct. 6 on an auspicious note, as attendees arose to find the stock market-and their portfolios' value--had plummeted another several hundred points that morning, compounding last week's tumultuous losses.

And so the conference kicked off, with presenters cataloguing the industry's worries that seemed even more dire than in recent years.

With the market crisis' anticipated impact on ad budgets, magazines will find it hard to offset further postal and paper costs coming next year.

At retail, the newsstand situation is uncertain, with stores cutting checkout and mainline display space for magazines and wholesalers, themselves in financial peril, pulling copies out of the system to cut costs.

And the Magazine Publishers of America is concerned that a revenue-hungry Congress will seek to wring more money out of businesses by removing tax deductions on advertising and reversing a cap on postal price increases in the year ahead. A clampdown on over-the-counter drug advertising also remains a worry.

Turnout at the annual conference, which has been following a long-term trend of declining attendance, was down 10 percent this year to 440, which was interpreted as a sign that with the state of the industry, many publishing executives felt they could do more good by skipping the confab and focusing on their businesses.

"It's a slugfest out there," acknowledged Ed Kelly, president and CEO, American Express Publishing Corp., speaking on a panel about future models for magazine companies. Later, Kelly told Mediaweek that he expected company revenue to finish down 4 percent in '08, the first such decline in several years.

The outlook also is dire at retail, where, John Loughlin, executive vp, general manager, Hearst Magazines, said that if the current trends continue, magazines could be facing a time when instead of 1,000 titles, 200 or fewer are on display in stores, depriving the industry of critical promotional opportunities. The situation, he said, speaking on a panel, "is unfortunately incredibly fragile."

Loughlin called on publishers to take a page from the consumer packaged goods industry and make use of coupons and in-store promotions to boost single-copy sales. He also urged the industry to adopt scan-based trading, which proponents say will reduce inefficiencies by eliminating double-counting of magazines and cut waste.

With questions swirling around print advertising's outlook, publishers are increasingly accepting that their future growth will come from non-print sources of revenue.

Kelly of AmEx said that the company is looking to develop more events and affinity clubs as it seeks to drive non-magazine revenue to 50 percent of the company, from 45 percent today.

Andy Sareyan, executive vp, Meredith Corp., said that 25 percent of his company's $1.3 billion in revenue in 2007 came from non-magazine sources like direct marketing and broadband TV, but that he'd like that figure to reach at least 50 percent over the next few years. "The only opportunity for us is to develop our brands across platforms," he said.