2008 a Down Year for Deal-making
The total number of media industry merger-and-acquisition deals in 2008 was down 13% from 2007, and total transaction value declined 68%. Business-to-business magazine deals in 2008 fell in number by 46% and in value by 92% compared to 2007. There were 25% fewer consumer magazine transactions in 2008, and their total deal value was 97% less than in 2007.
Source: The Jordan, Edmiston Group Inc.
Nothing is more important than useful content. If you have that, then design can only help to get people to notice it and thence to read it. If your content is mediocre, no visual fireworks will improve it. They may enchant for a while, but in the long run, “Form without substance casts no shadow” (T.S. Eliot). But what if you simply have to cut costs with measures such as switching to saddle-stitching instead of perfect binding, or eliminating UV coating from your covers, or opting for a lower paper grade or cover stock? Can design camouflage the loss?
More and more, publishers are seeking content management systems (CMSs) that help them to create in one system content intended for any channel. These tools serve as central repositories of content stored in extensible markup language (XML) and interact with other publishing and delivery systems (e.g., print and Web), thus enabling publishers to repurpose content across a host of channels on the fly.
Marie Myers knows a thing or two about magazine production. A 29-year publishing veteran, she has spent the majority of her career with Manhasset, N.Y.-based United Business Media (UBM), a global media and marketing services company targeting professional and enthusiast markets. She is currently the company’s senior vice president of manufacturing and is responsible for the premedia, production, distribution, print and events billing groups. Among her many contributions throughout her years at UBM, Myers created the production budget models that the company utilizes to forecast, reconcile and bid manufacturing expenses.
We live in interesting times. That statement reminds me of the day I was in a hospital bed surrounded by a team of doctors. They were telling each other, “This is an interesting case.” I looked up at the doctors and said, “For a journalist, anything interesting (case, times, etc.) means you have no earthly idea what is going on.” The same can be said today about the publishing industry in general and the magazine industry in particular. We live in interesting times.
If the publishing industry has any advantage in these tough economic times, it’s that the imperative to discover new revenue streams far predates the current crisis. Publishing’s woes are not analogous to a bursting bubble so much as a deflating balloon—with the hissing sound of advertising steadily moving from print to online.
The last eight years have been tough for science. They have, however, been very good for Science, the flagship publication of the Washington, D.C.-based American Association for the Advancement of Science (AAAS), in terms of readership and advertising growth.
Many magazines today are bleeding profits. Ad revenues are down in almost every market segment, and right now, there’s no telling when—or if—they are going to come back. For many (the recession aside), ad revenue is shifting online, but often at a slow pace, and it still comprises a relatively small slice of total revenue. As former Berkery Noyes Media consultant Jeff Reinhardt says in this issue’s feature story (“Outside-the-Box Revenue Generators,” page 28), “The marketplace has undervalued it. We’ve gotten rid of 10 analog [print] dollars and replaced them with 10 digital dimes.”
In an effort to cut costs and stay relevant in an age of up-to-the-minute, breaking online news, US News & World Report in 2008 reduced its print frequency from weekly to biweekly, and finally to monthly. Similarly, Newsweek plans to shrink its print format and focus on more feature-length stories. Its editor recently told The New York Times, “The drill of chasing the week’s news to add a couple of hard-fought new details is not sustainable.”
Clearly we are in a moment in history that I expect we all wish we were looking back on rather than living through. The Great Depression, which our grandfathers and great-grandfathers lived through, was not an easy time for anyone. But unlike the Great Depression, today the publishing community has been hit with a triple whammy in that we were already under attack by technology demons before the economic foundation of our advertising base was pulled out from under us, and at the same time, we were placed under an ecologic microscope. Technology, economics and ecology would be hard to fight individually, but en masse it will take great stewardship to survive the treacherous terrain.