BoSacks: No B.S. : The Bleeding Edge
Why magazine publishers need to think more like razor companies.September 2012 By Robert M. Sacks
It has come to my attention that magazine publishers are possibly missing the revenue boat of a lifetime. This epiphany came to me when last shopping for razor blades. I was reaching for my usual brand of Schick Mach 3 blades when I just had to stop, stunned at the shear marketing brilliance (pun intended) of the entire razor blade industry.
Do you remember the old marketing story of King Gillette giving away his razors at or below cost and making a fortune on selling the blades that fit into the razor? Oh yes, that was a marketing plan for the ages.
Over the last few decades those razor companies have gone from selling cheap commodity blades at pennies each to charging around $5.00 per blade for a slickly marketed and hyped shaving experience with, so far, up to five blades on a single plastic stick. I expect any day now an increase in price due to a must-have, never seen before, six-bladed, deluxe ploy to the unsuspecting general public.
They have marketed themselves brilliantly here in America and no doubt to the global market, selling the public a product that costs enormously more than they used to spend for supposed gains in the everyday experience of cutting whiskers.
Did you know that even in today's market there are still old-style injector blades to be found produced by a no-name company selling them at $7.99 for 20 blades, or 39 cents a blade? That makes the modern five-blade extravagant experience over 17 times the price of the available injector blade. In a search of my local drug store, they only carried the expensive type. The less expensive option was only found on the Web.
This brings me to the magazine business. We are at a fascinating business plan crossroad where there are several revenue paths we can travel in the hopes of finding a lucrative future for the publishing business.
We can try Chris Anderson's now famous freemium suggestion and use the original plans of King Gillette to give the public something for nothing and then try to up-sell the heck out of everything else. I think in some cases and for some industries this is an excellent plan and could work out very well.
On the other hand I deem it hard to impossible for print products to be profitable with that as a business model. The loss leader of printing, distributing and up-selling is complicated and fraught with too many unprofitable dead ends.
But what if we didn't use the old style of marketing like King Gillette and instead ramped up our products and used the modern razor theory of selling the public something that is 17 times more expensive than what they used to buy, for perceived gains in the everyday experience of reading extremely valuable, maybe priceless, content?
Readers of free content don't have any skin or investment in the game and can come and go as they please without personal loss, while a reader that has paid dearly for the product will cherish each word and the experiences that they deliver.
If printed magazines are going to have a future, it will be as a luxury item and will not be considered a luxury item till the public pays for more than its current perceived value. Just like the razor blades I buy now at 17 times the old price, I have been up-sold and charged for a better experience.
Magazines have to do two things as we move into the luxury product line business. The first is to make sure that our edit is considered indispensable and, as such, more valuable to our readers than ever before. And second, we have to pitch to the public a new value proposition on our industry's products—that they are more than worth every penny of the additional costs.
I have held magazines in my hand that command a price of $80 per copy on the newsstand. These very same magazines have a sell-through percentage in the range of 65 percent. That is a noble goal for our industry, which currently sells about 35 percent of the copies on the newsstand. This goal is only possible with outstanding edit and a perception of nothing less than distinction. Where are you currently in this pursuit? What I present to you today is an achievable goal, but not with the logic of our current methodology. PE
Bob Sacks (aka BoSacks) is a publishing industry consultant and president of The Precision Media Group (BoSacks.com). He also is co-founder of research company mediaIDEAS (MediaIdeas.net), and publisher and editor of a daily, international e-newsletter, Heard on the Web.