Magazines don’t look so slick now

First, the grim reaper came for newspapers….

Now magazines are looking bad and worse by the day. The latest: A major distributor is adding a surcharge, according to Keith Kelly in the NY Post.

Anderson News earlier this week informed publishers that it would impose a 7-cent charge for each copy of a magazine that it delivers to stores, and warned that any publisher that refuses to pay the fee could no longer count on Anderson to distribute its magazines….

Publishers, which have until Feb. 1 to agree to pay the new fee, are balking at Anderson News’ move, which would drive up costs at a time when most magazines are hurting. Indeed, American Media, which is already on the brink of bankruptcy, could be hit with a bill of up to $12 million, one source estimated. Another source said People, which has one of the best sell-through rates in the business, could be hit with up to $15 million in extra charges….

Magazines have a sell-through rate of around 38 percent and the surcharge would apply not to just the copies that are sold but to all unsold copies as well.

And magazine advertising is falling in the dumper – and it’s sure to get worse as the impact of the crash deepens. The Wall Street Journal reports at 17% plunge in ad pages in the fourth quarter against a year ago. For the year, they were off 12%.

TV’s next as auto, retail, and consumer categories suffer.

And they say the business model for the internet is crazy. At least it has no physical costs. Oh, I know, media online is supported by advertising, too, but the real opportunity there is to replace mass ads with a mass of niche ads. That is what Google did. Though Google, too, will feel the impact of the crash, it has room to grow while mass media do not. The crash is only accelerating — as in pouring accelerant on a fire — the fundamental shift in the economics of media. The change is big, fundamental, and permanent.

  • http://sellingprint.blogspot.com Michael Josefowicz

    But, the NewYorker seems to be doing fine.

    And mail subscriptions are not effected by newstand sales. Google is different. Google is in the advertising business. Once they got into the mix, advertising is a very bad business for everyone else. Small and decreasing prices for CPM’s is just the tip of the iceberg.

    Newspapers and magazine should be in the “identifying the fans and selling them stuff they want” business.

    Given the analytics, it should be possible to get some useful information about who is a fan. Then with all there creative talent, they should be in a good position to invent products they will buy. With their extra print capacity, it should be easy for them to produce the products. Given the huge number of hits they are getting it should be easy for them to sell their stuff to exactly the people who want it.

    It’s more of a Wal-Mart or Costco business model than Google. Selling IP is over. Selling stuff will never go away.

  • http://sellingprint.blogspot.com Michael Josefowicz

    oops And in the meantime, get as many dollars from print/web buys as possible. Until Google takes away all the web-only buys.

  • Tex Lovera

    “And they say the business model for the internet is crazy. At least it has no physical costs.”

    The physical costs of the Internet (computers, software, server farms, the physical internet itself) may be smaller than those of traditional media, but they are there nonetheless. Just ask Google.

    • http://sellingprint.blogspot.com Michael Josefowicz

      Right you are Tex.
      What I should have said, “the marginal costs are very close to zero.”

  • http://www.timwindsor.com Tim Windsor

    “Magazines have a sell-through rate of around 38 percent…”

    Holy Overhead, Batman! Six out of ten newsstand copies of magazines are pulped?

    Jeff, has that always been the case, or is the percentage higher than in past years? That seems like a lot of waste.

  • http://www.monitoringsoftwareonline.com brian

    The magazine just got way to diluted. There just is not enough business for so many magazines in every single niche.

  • ER

    Tim:
    The sell-through rate has been dropping for years. A decade ago it was 60, maybe 70%, depending on the title, and now it’s down in the 30-40% range.
    The usual publisher response has been to increase the amount of copies printed and push them through the distributor channel. Anderson, like other wholesalers, would actually leave some magazines in the warehouse and then count them as returns when the next issue came out.
    It’s a crazily inefficient business–and it all starts with pub statements and making circulation guarantees that are in reality anything but that……
    One interesting point regarding the NY Post article is the idea that other wholesalers can step into Anderson’s role. That’s highly suspect, because of the high costs and low revenue inherent in the business. That combination is one reason the NY Times Co closed it’s own wholesaler this month….

  • http://rexblog.com Rex Hammock

    Here’s my standard contribution to such threads:

    The magazine is a media format, not a business model.

    The magazine business model that you describe — mass advertising, mass circulation, mass distribution — is what doesn’t look slick.

    Lots of stuff that Google does doesn’t work. Does that mean Google doesn’t look slick? No, they move on and keep experimenting.

    Magazines (the format, not the business model) can be a part of a successful business model even if magazines (the traditional business model) die.

    • Walter Abbott

      You are one of the few people who have posted on Jeff’s blog who has figured it out. Magazines (and newspapers, radio, television and the internet) are indeed formats. They all are merely information distribution systems, nothing more.

    • http://sellingprint.blogspot.com Michael Josefowicz

      Rex and Albert-
      Count me in. You both have got it just right.

      For whatever it’s worth I think the emerging model is use the web to locate fans. Harvest the information from the site and make a couple of bucks in the process. Then invent stuff – books, events, CDs – to sell to your fans. It works for musicians. Same IP based industry that made the painful transition. The music is what they make. The concert tours are where they make their money.

  • Guy Love

    What will we do without the wall of magazines with the latest half-naked star or starlett trying to get our attention? Strip away the marketing, the ads, the fluff … and you get very little useful content. Maybe that is why they are tanking. Oh well, look at the silver lining, from an environmental stand point this is a very good outcome.

  • Mike G

    The sad thing is, I really like a few magazines. I picked up Dwell a while back and the sensual appeal of large pages full of sleek photography is as strong as ever. But most magazines look like bad websites– crappy, noisy, cluttered design, formats and features (5 Tips for…) that are so cookie-cutter you can’t tell the magazines in a category apart. The New Yorker works because you can tell it from anything else from a single page. Gourmet’s about to go under (I hear) because there’s nothing about it that sets it apart from five other food books.

    • http://sellingprint.blogspot.com Michael Josefowicz

      My take is that the New Yorker works because their fan base are readers. A very niche market. Plus they deliver great stuff to read. The magazines that have loyal fans and give them want they want will do fine.

      • Mike G

        That’s pretty funny, to say that a magazine is appealing to the niche market of people who will actually read a magazine! But it’s probably true. God knows newspapers are killing themselves by making themselves for people who don’t read newspapers. There’s an easier way to not read a good newspaper than by reading a dumbed-down version of it….

      • http://sellingprint.blogspot.com Michael J

        @Mike G
        Actually, I think it’s only some who believe the news is
        what sells newspapers. Rupert Murdoch? news? ha!
        Maybe he’s really understood this dirty little secret for years.
        And just didn’t care what crap he had to take.

        Don’t get me wrong. I hate what Rupert has done to the
        public discourse in pursuit of making a buck. But…do people
        read really buy the NYT for the content? Or do they buy it to find out what
        to be ready for the discussion at the water cooler or bsing at
        the bar after work?

  • tonynoboloney

    Time Mag has a picture of Barry O on the cover for the 13th time ln less than a year. Don’t wonder why magazines are in the dumpers.

  • http://sellingprint.blogspot.com Michael Josefowicz

    They could really make some money by selling their fans a series of Barry O posters.

  • susanne

    Jeff,

    You should check out the Exception Magazine, a new online news site that is based in Maine: http://exceptionmag.com/ They have a winning model.

  • http://storytelling.over-blog.fr Stephane Dangel

    We have over here in france people who still believe in magazines. His name is Dominique Wolton. He says magazines still have a future because they are “Media of the Offer”, delivering contents to consumers who don’t ask for. He opposes this to the “Media of the Demand”, such as the web, that are community, fragmented media. He sustains such media don’t produce social link, because they don’t cross and don’t make communities establish links between each other ; and for that signle reason he thinks magazines have a strong future.
    I wonder what you think about this worldview.
    From S. Dangel (France), owner of the first bilingual (french-english) blog about Storytelling

    • http://sellingprint.blogspot.com Michael J

      Nicely put “media of the offer” and “media of the demand.” It goes part of the way to explaining why CPM for media onthe web is not a sustainable revnue flow.

      But, there is too much out evidence out there to take “such media don’t produce social link,” at its face value. There must be something that I don’t understand about what he/you mean to say.

  • http://opines.mythusmage.com Alan Kellogg

    The first question I’d want answered is, why? Why are you publishing the magazine? Who is your audience? Who are you hoping to reach? Is there an audience for your periodical? What are they looking for?

    Then you’ve got matters of presentation, communication, community. How do you want to present your material? How do you want to hear from your audience? How important is community to your success, and how much are you willing to expend for community?

    I know of a magazine that folded. Publisher decided to drop it, as a print publication. It failed because the publisher forgot why they were publishing it. They forgot that bling cannot hide poor content. Worst of all, they forgot their audience.

    (The wisdom of traditional magazine graphic design is a topic for another time.)

    All in all I agree with Jeff, magazine publishers have hurt themselves because they’ve forgotten what they need to know and to do to succeed in publishing. Magazines well be back, but they will be leaner, more focused, and more flexible than the periodicals being published today.

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  • http://sellingprint.blogspot.com Michael Josefowicz

    Taken from a Print industry discussion at PrintCEOBlog.com

    “During 2006, 1,200 new consumer titles were born in the U.S., including 900 consumer titles as well as 300 consumer educational, affinity, and custom publishing titles. Of the new consumer titles, almost two-thirds were annuals, including annual specials, while almost a third were issued four or more times a year. Fifty-five new business magazine titles were added in the U.S. One hundred and ten new consumer titles and five business titles were added in Canada.

    By 2011, the study forecasts that the number of titles of all types will continue to grow to over 25,000 in the U.S. and 3,000 in Canada. However, the study forecasts a 10 percent decline in total pages included in all North American magazines in the next four years. Reported in EDSF Report, September – October 2007″

    http://printceoblog.com/2009/01/the-publishing-canary-theory-revisited/comment-page-1#comment-10920

  • Jim Meieers

    What would Google do without content?
    I`m very sad about the discussion from Mr. Jarvis, Mr Crosbie and colleague. I think the situation is very bad. Newspaper dying will be followed by news content dying when nobody will pay in the future. Soon or later this will be the end of google! Because what will google do without content? Mr Jarvis, i would be very appreciated to read some lines about this big problem that will threaten our democray…

    • http://sellingprint.blogspot.com Michael Josefowicz

      “Newspaper dying will be followed by news content dying when nobody will pay in the future. ” I think I heard similar things about the music business, back a couple of years ago. Newspapers will change, get more efficient and better. News isn’t going to die.

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