From the Editor: Ignore the Periphery At Your Peril
Never let it be said our columnists can't see the forest for the trees. In this issue, our contributing arborist, D. Eadward Tree, offers a frank assessment of the threat facing traditional magazine publishers. According to Mr. Tree, it's not the Zites and Flipboards of the world releasing magazine-like products on the iPad, nor hoary tech behemoths such as AOL and Yahoo pushing further into the content space. It's the "reasonably talented, technology-enabled part-time outsider," unaware or unconcerned with old publishing conventions, willing to meet evolving audience expectations about how and when content is delivered.
Some might call this crazy. After all, expertise—and capital—matter more than Web savvy, right? The most successful publishers today are leveraging well-known brands, not sitting on the periphery poaching followers—right?
It makes one wish they could consult a world-renowned economist. As it happens, advice on business development and strategy was in the offing recently at the Yale Publishing Course from Richard Foster, a senior faculty fellow at the Yale School of Management. Foster presented an analysis of historical market cycles and what they mean for publishers, turning dry numbers into a scintillating tale of the rise and fall of major power players over the decades.
Capitalism, Foster said, is at its core a process of "creative destruction" driven by new technology and competition. Understanding this dynamic can illuminate "warning signs and mistakes that confound executives because they misread what they are seeing in the environment."
Like their counterparts in other industries, publishing executives often look for threats in the wrong place. Over the last 20 or so years, "Core competitors in the magazine business … beat each other's brains out to acquire each other," Foster said, while on the periphery there were hundreds, if not thousands, of tiny start-ups getting ready to revolutionize the industry. "If you want to see the future, you look at the periphery," he stressed. "Do not look at the core. The periphery will tell you what's going to happen."
So, what is the periphery telling us today? While it's not as simple as focusing on scrappy news aggregators, that is certainly a part of it. Foster recommends looking at where the investment dollars (venture capital and acquisitions) and customers (audiences) are going. Certain products and companies come to mind. Flipboard, The Huffington Post, TechMeme, Mashable, Say Media and Zimbio Inc. (both combine innovative technology with targeted editorial), niche B2B like TechTarget … and so on.
Increasingly, as D. Eadward points out, non-traditional website operators willing to break long-standing rules are the ones seeing audience growth. While no one has fully figured out the monetization puzzle, the assumptions and practices of these disruptive publishers must be paid attention to. As Foster might say, the days of duking it out for a place at the top of the publishing pile have passed; Mack the turtle has burped, Yertle's tower is listing, and the kings could lose their throne. Or, to borrow Foster's preferred imagery, business competition is not about the Goliaths battling the Goliaths, or even the Goliaths battling the Davids. It's more like Gulliver and the Lilliputians. With so much disruptive change afoot, even the most high-flying publisher could find itself waking from the sleep of complacency, in weird, unfamiliar territory, tied firmly to the ground.
I'm very pleased to welcome Publishing Executive's new content director Lynn Rosen to the fold (or is it above the fold?). Lynn is an accomplished author, editor, literary agent and academic with a variety of experience in many aspects of publishing. In her most recent role as director of the graduate publishing program at Rosemont College, she spearheaded innovative approaches to recruiting talent and providing cutting-edge insight into the business of publishing, skills she is already bringing to the magazine, website, Publishing Business Today newsletter and planning for our upcoming show, the Publishing Business Virtual Conference & Expo, which takes place Sept. 13. We're glad to have her on board.
Get to know Lynn through her introductory column in this issue.