Publishers adapt to a changing market

Here is an interesting piece from MediaBizNet.com.au quoting several senior magazine publishers from around the world discussing the current market and what they are doing to ride it out.

Publishers include:

Peter Phippen. MD, BBC Worldwide, UK

Aroon Purie. Chairman and editor-in-chief, The India Today Group

Eija Ailasmaa. CEO, Sanoma, The Netherlands

Jonas Bonnier. CEO, Bonnier Group, Sweden

Johnathan Newhouse. CEO, Conde Nast International, UK

Steve Lacy. CEO, Meredith, USA

Click here for the story

2008 – The Year in Publishing

Here’s our summary of major stories from the Australian publishing industry for 2009.

JanuaryThe Bulletin, Australia’s longest running magazine, publishes its final issue. Private equity companies take a look at independent publishers. Helen Kingsmill resigns from the Magazine Publishers Association.

February – Pac Mags’ online digital magazine Red Zero folds. Reed Elsevier announce that their B2B publishing arm, Reed Business Information is for sale.

Check out MediaBizNet.com.au for the rest of the story.

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How will the future of publishing look?

I was thinking more about the future of monetising media content, both through current online products and soon-to-be mobile devices. There’s been a lot of talk in the publishing industry recently about specialist and niche titles being forced to look for subscription revenue as they are finding it harder to compete in the retail market with larger consumer magazine titles.

These specialist magazines are forced off the newsstands by agents modeling themselves after FMCG retailers  that maximise return per square metre and charge for prime retail positions. Chasing subscriptions and subscription revenue seems the obvious route to take.

But consumers are chasing content from many sources, increasingly it is free, backed by advertising. They are developing deep and sophisticated relationships with digital devices that deliver information to their fingertips whenever they want it, B2B and consumer – mobile charges will be the major barrier to consumption. What benefit are consumers gaining from magazines, nowadays? This is the question magazine publishers should ask themselves. Portability? Quality of reading format? The nostalgic feel of paper?

I don’t believe it will be long before electronic paper – truly flexible, full colour, electronic paper as being  trialled by Fujitsu and Philips – deployed in a next-generation Kindle-type device, will turn the business models of the publishing market upside down. A flexible, large-format, mobile device that is web-connected, drives down the value of subscriptions as access to quality content moves towards Free.

If the only reason you are gaining revenue from subscriptions is because of the magazine format, then the lifespan of this revenue source is coming to an end. Charging for high-end, quality content is already being challenged: Business Spectator (free) vs Financial Review (subscription).

What content would I pay for? Important timely business information that I don’t want influenced in any way by advertising. And these types of subscription businesses are continuing to perform strongly in the face of free online information. Some examples are legal, accounting, some financial information.

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B&T Magazine launches new fortnightly format

Following on from my previous post about the viral marketing campaign B&T has been running at www.deathofsmalltalk.com.au/smalltalk.asp, the newly formatted, fortnightly magazine has started arriving today at subscribers letterboxes.

At the www.deathofsmalltalk.com.au, address an electronic version of the title is available for those who want to browse the content online.

New format for B&T Magazine - also digitised online

New format for B&T Magazine - also digitised online

Update: As you can see from the dead digital link above, B&T have decided to pulled down the online version of the newly formatted B&T magazine. The online edition was only up to give people a taste of what the new format wold look like.

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The FREE business model, as Chris Anderson explains

Chris Anderson’s discussion of FREE online business models raise many of the same questions that my posts about advertising-driven and subscription-driven media models did after the Future of Media Summit 2008. Read people’s comments on his original post.

This is a key debate taking place worldwide as traditional/print/atom/physical (call it what you like) businesses look to translate their revenue generation model online, as they acknowledge the growing impact of the digital space.

I had a meeting today with a travel agent who has a website. Their site, however, is nothing more than manually controlled brochure ware for events and prices. They didn’t recognise the significance of search engine traffic, the potential for ongoing interaction with clients, or the ability to offer FREE advice and information to new visitors. I could go on. You don’t think about a travel agent being involved in the FREE economy, however, they have built up so much specialised information which they happily pass on to people over the phone, or across the desk on a regular basis that they ARE giving away valuable ‘intellectual property’ without having it clearly packaged-up and branded. This content can easily be ‘wrapped and branded’ as important, FREE product that will assist travelers, particularly in highly-targeted markets. Will this sell travel services? If the information is valuable and engaging, it’s a reflection of the type of service you will provide. And people want to buy valuable and engaging services and products.

Here’s what Chris Anderson has to say about FREE:-

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FREE: the cocktail party version

When you’re writing a book you need to have your elevator pitch down or “What’s the book about?” will become the most dreaded four words you can hear (followed closely by “how’s it going?”).

Obviously the one-sentence version of the answer should be something close to the book’s subtitle. But I haven’t nailed that one down yet, so these days I just say “The economics of zero dollars and zero cents” and hope for the best. Some people glaze over and move on at that point, but for those who stop, intrigued, and ask me to explain, here’s what I say:

We all know free–it’s a trick that marketers use. But free is changing. When you think about it, there are two economies, one of atoms and one of bits. In the atoms economy, which is to say most of the stuff around us, things tend to get more expensive over time. But in the bits economy, which is the online world, things get cheaper. The atoms economy is inflationary, while the bits economy is deflationary.

The 20th Century was primarily an atoms economy. The 21st Century will be equally a bits economy. This book is about the differences between 20th Century free and 21st Century free–free moving from a marketing trick to a new economic model.

Anything free in the atoms economy must be paid for by something else, which is why so much traditional free feels like bait and switch–it’s you paying, one way or another. But free in the bits economy can be really free, with money often taken out of the equation altogether. People are rightly suspicious of free in the atoms economy, and rightly trusting of free in the bits economy. Intuitively, they understand the difference between the two, and why free works so well online.

– For more see: The Long Tail – Wired Blogs.


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Chris Anderson explains the long tail

UK-based site Intruders.tv is a “global network of video blogs covering the web 2.0 and technology ecosystem”. They interviewed Chris Anderson about The Long Tail at a recent conference and asked why people have attacked his theories, business models and philosophies about the internet. Anderson also discusses his motivations and key concepts in this interesting video.

Vodpod videos no longer available.

more about “Chris Anderson Interview“, posted with vodpod


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The economics of moving from print to online

This is a must read article below, published on Monday Note, September 29, 2008 and edited by Frédéric Filloux. It addresses the structures and costs involved in a print and online newspaper business.

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Let’s kill a myth. The dream of a compact newsroom, able to output a high-intensity general news website doesn’t fly. Numbers simply don’t add up. And here is why.

First, the cost structure of a daily. In a typical operation, the biggest costs are industrial ones: around 25%-35% for paper and printing; another 30%-40% for distribution; around 18-25% for editorial; the remaining 10-15% are for administrative and marketing expenditures. It varies from country to country but we can safely assert most of the costs — at least 60% — are industrial in nature. Evidently, that part disappears when going online.

Now let’s compare three numbers:

a) the cost of an online newspaper,

b) the audience needed to absorb costs

c) the audience of the biggest website

Journalists make up most of the costs of a pure digital newsroom. As an example, assume the “loaded” (salary, benefits, expenses, overhead) cost of one journalist is about 60,000 € per year. If the objective is to provide a general news site, the starting point for a comparison is the print press. As an high end instance, a newsroom such as the New York Times’ still counts 1400 journalists, paper and digital operations included (they tend to merge). The Los Angeles Times now has 720 after the deep cuts demanded by its new owner (10 years ago, the headcount was 1300). The Washington Post has a staff of 600.

For the rest of the article see:

The economics of moving from print to online: lose one hundred, get back eight | Monday Note.


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