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.
Why do I tell you this? Print publishers have an average newsstand sell-through rate of 33 percent—or roughly equal to the financial services' open rates of 35.6 percent. Admittedly, this isn't an apples-to-apples comparison, but doesn't it make you wonder? Our financial future may be at stake here. Advertisers want transparency and accountability, and the digital magazine is our path to offer them.
We need to use our creative energy to get our digital magazine open rates up to at least those levels. This is not going to happen overnight, but I believe it will happen before you can say, "Gee, I didn't see that coming." As the public adopts and adapts to new electronic reading devices, our industry needs to be at the forefront of this progressive trend.
It is not too early in the technology cycle to start thinking about a full digital future for magazines, but we will be there sooner than you think.
Not sold? Just look at the progress of the last few years. The Amazon Kindle was first released Nov. 19, 2007. That is just two short years ago. Already, there are full-color e-readers due out in early 2010. Better than that, there are at least two companies planning roll-outs of hinged, two-page, full-color, touchscreen e-readers, one of which is reported to sell for only $160. This is not science fiction, but rather science fact. Is your business ready to capitalize? PE
Bob Sacks (aka BoSacks) is a printing/publishing industry consultant and president of The Precision Media Group (BoSacks.com). He also is the co-founder of the research company mediaIDEAS (MediaIdeas.net), and publisher and editor of a daily international e-newsletter, Heard on the Web. Sacks has held posts as director of manufacturing and distribution, senior sales manager (paper), chief of operations, pressman, circulator, and almost every other job this industry has to offer.
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.