BoSacks - The Profit Prophet: Has the Print Magazine Bubble Burst?
I have to be honest. I am shocked that so many magazine people are so shocked about the current state of the industry. For years, before the economic downturn, we heard that there were too many redundant titles out there. You've heard of the "dot-com bubble" of 2000 and the "housing bubble" of 2008; I think we are experiencing the bursting of the magazine bubble of 2009-2010.
This is not a prophecy of doom and gloom for the industry, as my friend Samir Husni (aka Mr. Magazine) likes to say, but rather a message of hope. History shows us that after a market's bubble bursts, comes a period of sensible growth and recovery. The magazine industry will not wither and die under these pressing conditions, but will contract and move on. It will get rid of the fat, and become a more capable force of monetized information distribution. The smart publisher will refocus with 21st-century business models, models that deal with the advertising agencies' demand for transparency and accountability. They have begun to call it granularity.
So what's next, and how will we get there?
A great industry shift is happening. BPA and ABC are changing their rules. They are looking closely at the digital magazine market, and with good reason. Digital magazines are our best hope for giving advertisers what they want—information and granularity.
The direct-marketing industry recently reported that e-mail open rates averaged 22.2 percent in the second quarter of 2009. (That is, 22.2 percent of people opened and viewed the e-mail with images turned on; the actual number of people who opened the e-mail with images turned off, and therefore not trackable, may be significantly higher.) The report, from Epsilon (which tracks e-mail trends), also noted that Q2 2009 showed an increase in open rates and click-throughs year over year. Of the industries tracked, financial services had the highest open rates—35.6 percent in Q2, up from 28.4 percent in 2008.