Tag Archives: magazines

12.29.10
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iPad magazine sales continue dropping

After some initial very positive sales figures for magazines on the iPad, sales continued to drop for US titles as the end of 2010 approaches, according to a post by John Koblin in WWDMedia.

Vanity Fair sold 8,700 digital editions of its November issue, down from its average of about 10,500 for the August, September and October issues. Glamour sold 4,301 digital editions in September, but sales dropped 20 percent in October and then another 20 percent, to 2,775

iPad sales for Wired, which outsold print copies with the iPad edition in its first month, have seriously tailed off. We now have several months of declining sales for the iPad edition. The iPad as ‘print’ saviour now looks less and less likely. Would a better subscription model help? Would less print-centric thinking help? At this point, the sales figures don’t look to justify the premium ad rates some magazines are charging for the iPad.

Dorian Benkoil writing on PBS MediaShift quoted John Loughlin, executive vice president and general manager of Hearst Magazines:

As Loughlin noted, this is an experimental period, when magazines are learning what they can offer and how much they can charge. Some apps will be breakout hits. A combination of web, apps, mobile and print sales may bolster magazines and give them new life and sustained profitability.

But the excitement over apps has some difficult realities to confront until that day is reached.

I’ve said it once, and I’ll say it again. There are no silver bullets, no single solution that will save publishing. It’s going to take strategic thinking that focuses on building compelling print and digital products and building a multi-revenue stream business or businesses to support them.

11.03.10
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iPad expectations for content companies coming down to earth

I was always sceptical that the iPad would dramatically change the economics of digital content. Well, more accurately, I called content execs “delusional”. We’ve now got a few months of data under our belts, and Brian Morrissey of AdWeek comes to many of the same conclusions that I did after looking at some of the early apps and pricing strategies:

Despite the optimism that greeted the new device, there is a danger that publishers are squandering an opportunity with clunky apps, bad pricing strategies and unsustainable ad tactics.

Yes, and unlike when I wrote the post back in April, we now have months of user data, interviews and sales figures.

The first month, Wired sold more copies on the iPad than in print. After that promising first month, the designer was described as a cross between Jesus and Pele. There was lot of messianic talk around the iPad. I still love the line from Mathias Döpfner, head of Germany’s Axel Springer, who said:

Sit down once a day and pray to thank Steve Jobs that he is saving the publishing industry.

I wanted to see what the sales were after a few months, after the early adopters that read Wired had a chance to use it and decide whether static images of print pages was the digital experience that they wanted.

Wired: 100,000 iPad downloads for June; July, August, September averaged 30,300.

It looks like the early enthusiasm is cooling. iPad sales from other titles are even less impressive. When I listened to the magazine and newspaper industry talk about the iPad, they talked about how close it approximated the paper experience. As a digital consumer, I said it then and I will say it again: I don’t want a paper experience. Frankly, on a recent flight, I was frustrated trying to wrestle my print FT into submission in an economy seat. I can’t search it. I can’t flick between sections. I have no problem reading on a screen. I want to save and share what I read. As designer Khoi Vinh says in AdWeek:

The magazine app experience, according to Vinh, is akin to a “remote, suburban cul-de-sac” while the digital world is moving to a real-time chaotic city.

In a lot of ways, publishers thought that the iPad was the future that could take them back to the past of the fat profits of the print era. It doesn’t look like it’s as simple as replicating the print experience and waiting for the money.

It never was going to be that simple, and it’s a bit disappointing that the leaders in the industry believed a single device was going to overturn years of experience and expectation from the web. In the end, it just reinforces that we’re in need of a fundamental rethink. There is no magic technology that will transform print into digital success. Think digitally and commercially and then we can start building sustainable digital businesses.

06.14.10
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Ending the self-fulfilling prophecy that digital content doesn’t make money

If you walk into a newspaper newsroom, you will hear something said over and over: “You can’t make money online”. It’s closely followed by grumbles of how much the company spends on digital. These are held up as some incontrovertible truth, like carrots help you see better.

Just as ‘carrots help you see better’ was propaganda spread by the British Air Ministry to conceal the military secret of radar, the ‘truth’ that there is no money to be made online is nonsense. It’s unquestioned propaganda in newspaper newsrooms where there is an unnecessary, senseless and ultimately self-destructive battle to keep the newspaper focused on paper, a battle driven by advocates of the primacy of print.

I’m not calling for the presses to be shut off. Rather, I’m calling for innovation in both print and digital. This battle to preserve the past is preventing companies from creating print and digital products that serve 21st Century audiences. Companies that are clear-headed and audience-driven are developing multi-platform strategies that are reversing decades long decline in profits and print circulation while increasing the share of revenue from digital. Those newspapers who remain focused on print are missing that opportunity.

It’s true that print makes the bulk of newspaper revenue, usually around 80%. But in focussing on outdated print strategies newspapers are creating a self-fulfilling prophecy: By not investing in digital, they ensure that digital revenues remain small in comparison to print.

In the US, Outsell found that in the news segment, largely made up of newspapers, only 11% of their revenues were from digital. In comparison, B2B publishers made 36% of their revenues from digital. Outsell analyst Ken Doctor said, “Simply put, the news industry has so far failed to make the digital transition.”

Although 11% of revenue doesn’t seem a good return, they have to be viewed in context. Print revenues are declining as a decades-long circulation drops no longer make print advertising as attractive. Digital revenues have been increasing, sometimes even through the recession, but it is usually from a very low base.

Commercial departments will also often tell you that it’s just not possible to make money online. In many instances, news organisations have built up huge audiences online but have failed to translate that audience into revenue. They will even refuse to investigate the opportunities afforded by digital on the basis that it would require them to do something different.

Commercial departments who say it’s not possible to make money online need to shoulder their responsibility for their failure to help newspapers make the transition to digital. If the current commercial strategy isn’t working – and old print ad sales strategies are not working very well online – why not try a new one? As the adage goes, if you do what you’ve always done, you’ll get what you’ve always got.

There is hope, though. Folio has two great profiles of two publishers re-inventing themselves: The Christian Science Monitor and The Atlantic. Both profiles dive deep into details of the two different publications.

After rising losses, The Christian Science Monitor shifted from a daily newspaper to a web-first strategy with a weekly news magazine. One thing that stands out in the profile of the Monitor is how much audience research they have conducted and continue to conduct with more than 3,500 readers. They found out why people had stopped taking the newspaper: Cost, lack of time and a shift to getting headlines online. I really liked the way that publisher Jonathan Wells summed up how they re-thought their value proposition:

We had to think long and hard about it. Our approach is a composite of the learning economy—we’re serving people without a lot of time, who are trying to understand complex issues quickly, and contribute to a solution. As one guy here says, our mission is ‘Help me get smarter, faster.’

One thing that jumped out at me was how willing they were to be nimble and to rethink not only how they worked digitally but also their print strategy. As they said, they were able to convert 93% of their print readers from the daily to weekly, and they’ve increased subscriptions by 63% since the shift. Increasing circulation going from 2009 to 2010 is something that most publishers would have killed for. They are not pursuing newsstand sales. They are focused on attracting the “right customers through controlled, targeted growth,” according to senior marketing director Susan Hackney.

They have also increased their page views by 49%, and they are looking to develop a line of digital products. This is all really smart, strategic and refreshing in an industry that seems to be mostly focused on squeezing the last bits of profit out of declining business models. That’s just a taster of an excellent article.

Folio also did an excellent profile of The Atlantic, which is managing to reverse a revenue decline that began in the 1960s. I often say that news organisations need to disrupt their business before someone else does. Atlantic Media president Justin Smith did just that, pushing for a digital-first strategy. From the Folio article:

(Smith) stressed that print is not dead, but taking this approach allowed the company to unlock its grip on traditional revenue sources. Importantly, the Web site’s overhaul was set up as an insurgency on the print brand. “If our mission was to kill the magazine, what would we do?” said Smith, who added that a digital competitor was going to do that anyway, so they did it themselves.

They are projecting that digital will account for 39% of their revenue in 2010. They not only shifted to digital first, but they also took a novel marketing approach, setting up their own marketing services division in an effort to differentiate themselves from ad networks. I’ll leave you to read the rest of the article, and I’ll give you one last reason to read the rest. After decades of decline, they looking at a profitable fourth quarter of 2010 and a multi-million profit in 2011.

To reposition themselves, these publications are looking for innovation from both print and digital but with a digital first strategy. The Monitor is using audience research to deliver products more relevant to their audiences, and they are thinking clearly about where they need to go and how nimble they need to be to achieve success.

We can rebuild businesses to support quality journalism, and here are two examples that show a few options for the way forward.

04.06.10
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iPad app pricing: You’re not fooling consumers

As I mentioned in one of my comments on my previous post about iPad app pricing, the gap between the value assigned by publishers and the value perceived by consumers was one of the big issues in terms of paid content.

Now, we’ve evidence of this. Mediaweek is reporting that “Mags Get Pushback on Per Issue Price on iPad“. They quote this comment on Time magazine’s app.

As one customer of Time magazine’s app ($4.99 single issue) wrote, “Not to put too fine a point on it, but they’re … passing the savings on distribution and raw materials to themselves. I can get 56 issues of the paper version for $20. How am I supposed to feel about this?”

Some consumers also misunderstood the pricing, thinking that the per issues pricing was actually a subscription. They also quoted an unhappy, although not antagonistic, comment from a Popular Science customer, who wanted to be ‘help’ and buy the iPad edition but couldn’t bring himself to pay the $4.99 per issue price. Sara Öhrvall, director of research & development at Bonnier Corp., publisher of Pop Sci, put a brave face on it saying that they were working to prove the worth of the per issue price. She said:

We have to do a lot of work to recreate the magazine for the iPad.

However, that’s the problem. Rather than recreating the magazine for the iPad, why not think about the iPad how it changes what you can offer. This has been the problem when it comes to digital content. Most content creators think of recreating a legacy experience instead of creating a new experience. We have digital audiences now. They are natively digital. They don’t want a magazine experience on an iPad. They want a premium digital experience delivered on their device.

That they might pay for, although it’s doubtful that they will pay more than you’re charging them for a print experience. You’ve got a long way to go to prove that to consumers.