Special Report: Publishers’ Outlook 2011
The year ahead promises to be an interesting one, with an exploding digital device market, a recovering economy and maturing notions of what multiplatform publishing can mean. As readers and marketers continue to adjust to a media landscape made newly dynamic by tablets, questions of how and when to monetize e-content will constitute a central theme in 2011, especially as News Corp.'s and AOL's announced tablet-only publications, and platforms such as Flipboard and the long-anticipated iTunes and Android newsstands, help re-shape the conversation. Meanwhile, print holds firm, events show signs of accelerating growth, and ever-more sophisticated data monetization and in-house marketing solutions beckon as new sources of revenue.
Publishing Executive interviewed executives from various publishing sectors to get a sense of where the industry is heading. In addition, our "Publishers' Outlook 2011" survey provides a cross-section of what publishers currently find most promising—and challenging—about the industry. (See sidebar.)
Michael Clinton, President of Marketing/Publishing Director, Hearst Magazines
Hearst Corp.'s recent deal with Lagardere, which promises to add 100-plus media properties to Hearst's roster in 15 countries, puts the company in a position to shape the future of magazine publishing through its strategic decisions.
PE: In which area(s) do you expect to see the most revenue growth?
Clinton: [In] 2010, … we began to see a media recovery, particularly in magazines. … We will have low double-digit growth in 2010 in our advertising paging; the numbers are through November, but we know that through December we will see that. There was some … double-digit growth [in] print and … digital in our corresponding websites, and, of course, we have the emerging iPad apps world.
So … we're feeling that '11 will feel a lot like '10 in terms of continuing recovery. We don't expect it to be robust, but … to continue to grow as consumers are beginning to spend more. Even with high unemployment, overall GDP looks to grow, and marketers are spending more against consumers. I think we'll see that in print … in digital, and then, of course, on all things app.
PE: Where are you investing most heavily?
Clinton: This is our first full year of publishing Food Network Magazine, and it has been a huge success: 1.3 million circ and the No. 1-selling food magazine on newsstands. So we continue to invest in that baby; [it] has become a big baby.
But we are always putting investment dollars into our core magazines. In the last couple of years, we increased the trim size of Good Housekeeping, … Redbook, House Beautiful [and] Country Living. So we've been enhancing production values. …
It's important that we invest in our core product because that continues to be … where we get [the majority of] our revenue and profits; but at the same time, we have to invest in [expanding] our digital sites, in all things iPad and tablet. … We have a team now that is working on iPad and tablets, [and] we're building out an app lab at Hearst Tower.
We've hired an advertising executive to run the emerging advertising side of the app world, so those are big investments in people. If you go to MagazineConversation.com, we are investing a lot in bringing consumer insights to the marketplace [regarding] how consumers use, read and feel about magazines as part of their media experience. … That's great information we can take to our advertisers.
PE: What's your 2011 print outlook?
Clinton: The good news is [that] the advertisers have realized the importance … of magazines in the mix, so magazines … are very much a part of the media mix and, I think will continue to be. We [expect] … to see growth on the print side, while we are growing out these other businesses.
PE: Will revenue from paid content (e.g., paywalls, subscriptions) grow?
Clinton: I think we have all been unsuccessful in getting the consumer to pay for content on the Web. The media world and content providers at large trained the consumer that they [did not have to pay]; but now we have Steve Jobs to thank for getting consumers to pay for content. …
We have about 50 apps … that live in iPad, Nook, on the iPhone and soon-to-be emerging Android tablets … [and] 95 percent of them—because we have a couple other little experiments—are paid apps. … We'll have … consumer revenue and advertising revenue.
PE: What's on the horizon for you in terms of mobile/app initiatives?
Clinton: … We are building bundled content and advertising. So, for example, in the October issue of Esquire, we have the "Best Restaurants of the Year," … and then we built it out with different content online, and … again in a different way on the app. So the consumer can follow … iterations of the content on different formats, and we bundle those and sell them to an advertiser. In [the Esquire] case, Buick bought that whole bundled program.
PE: What do you think will be the biggest challenge this year?
Clinton: …A lot of younger media professionals … don't have full appreciation for print, for what magazines do.
The magazine industry came together about a year ago and launched an advertising campaign, the Power of Print. It's been measured by research companies—MRI and Vista—and [has achieved] very, very high scores in terms of consumer buy-in to the magazine product. The whole idea was to change the conversation so that, yes, we live in an ever-changing digital world; however, … the magazine-reading experience seems to be very much what the consumer wants. That's always a challenge, to … keep that conversation front and center. That's why we called our site "the magazine conversation"—when you go on it, you will see we did newsstand intercepts and subscriber/user-generated video and so forth.
PE: What do you see as the greatest opportunity in 2011?
Clinton: … Our magazine brands are … our unique selling propositions. If somebody is interested in reading Cosmo magazine, the greatest opportunity for us is to continue to build out the Cosmo messaging on … new devices and platforms. We have Cosmo.com, Cosmo Radio with Sirius XM, the Cosmo iPhone and iPad apps that are emerging.
Jim Fishman, Senior Vice President, AARP Media Sales
AARP The Magazine is the flagship product of association-publisher AARP, whose portfolio includes AARP Bulletin, AARP.org and Spanish-language AARPViva su Segunda Juventud. AARP the Magazine enjoys a rate base of 22 million, but doesn't rest on its laurels—the staff is always looking to improve print and digital offerings to reflect the needs of older Americans.
PE: Where do you expect to see the most revenue growth?
Fishman: As marketers continue to acknowledge the importance of 50+ [consumers], we expect to see continued growth in print, digital and broadcast. The most explosive growth is expected in our digital space, which showed year-to-year revenue growth in the 50-percent range in 2010.
PE: Where are you investing most?
Fishman: … In … reaching and engaging our members wherever they are. …We have invested in magazine and website redesigns, and launched a digital newsstand, apps and a social media strategy.
PE: What is your outlook for events?
Fishman: AARP and AARP Media Sales continue to provide engagement through a variety of events: AARP The Magazine Road Show, Movies for Grownups, AARP Presents Los Angeles@50+, AARP The Magazine Inspire Awards and AARP Presents Marketing@50+.
PE: Do you expect growth in ad revenue—in print, digital, or both?
Fishman: … We expect growth in both areas to continue in 2011.
PE: What's on the horizon for you in terms of mobile/app initiatives?
Fishman: We're taking a multipronged approach to mobile/apps. In 2010, we launched four apps. We are [also] committed to ensuring that everyone [can] view AARP.org [from any device, through AARP.org mobile site].
… We're looking to increase the utility of our [apps], [and] … value to the consumer. For instance, we foresee a point where a member could go to Walgreens, … and share their AARP [membership] 'card' directly from their phone … to get a … discount. We're also planning to expand our apps to the Android, and further evaluate our app offerings.
Scott Pierce, Vice President/Group Publisher for Magazines, ALM
Pierce, newly appointed group publisher, says ALM is committed to building an effective multichannel publishing strategy centered around digital product development. The business-to-business publisher, which specializes in the legal and commercial real estate sectors, will introduce new digital and events products this year.
PE: Where are you investing most?
Pierce: We are investing most in … continuing education products, online and live. That is a growth area for us.
Because … education is … [so] evergreen, we can produce content that has a [long] shelf life, if we … repurpose it. For example, if we do a seminar …, we will ... [record the audio and video] and repurpose [it and sell it] in our online education center. … [We've done] the same for webcasts … [and] virtual events.
PE: Is your events business growing?
Pierce: Yes. We saw an uptick in 2010 and expect that to continue. We launched Virtual LegalTech and Virtual Corporate Counsel, and are … [expanding] those … this year (our registration for Virtual LegalTech right now is over 16,000), and may do another virtual event this year.
PE: Will print and/or digital ad revenue rebound?
Pierce: I do think we will see some increases [in] print …, but that the digital side will increase more. …
But … people are rediscovering that print actually works. I think there was a rush to move to digital … with mixed results, and now they … want to have a more balanced marketing plan.
PE: Will revenue from paid content (paywalls, subscriptions, data, webinars, white papers, etc.) increase?
Pierce: I 100-percent expect revenue will increase from paid content, [including] all the things you list. It's a big growth area.
PE: What's an important new revenue stream for you near-term?
Pierce: We just launched … a new online directory for legal technology—a membership-based registration product. [You also need to register for the sister (news) site], and you will get beyond a firewall into some better content. There's money in the data. But are we going to have more paid products? Absolutely.
PE: What's on the mobile horizon?
Pierce: We are coming out with American Lawyer on the iPad. Corporate Council and Law Technology News will follow fairly quickly, and we do believe that mobile apps and so forth will continue to grow. … Our feeling is, "Let's get in there and … see what our readership is looking for [and] find ways to monetize it."
PE: What will your biggest challenge(s) be in 2011?
Pierce: No. 1 is … the speed at which we roll out new products, revenue streams, ways of … engaging with our communities. You can never go fast enough. …
The second thing is the pace of transformation. We, like a lot of media companies, are transforming what we do to be more digital than print, and so the speed at which that transformation takes place is something I'm always cognizant of because it's challenging to get people to move quickly. PE