Thoughts and reactions to the PBAA-MPA Conference
In a very real sense our industry is grappling simultaneously with its near and far future, both of which have alternate possibilities that seem to transform every day. I would further comment that our near future may be somewhat different from our far future. Where once publishing was pretty much on top of the three dominant media consisting of TV, radio, and print, today we are scrambling for a new understanding of our position in the still evolving information distribution society. Our products are as good or better than ever before, but at the same time the public has more choices, so we have more competition than ever before, too. The public’s options to learn, be entertained, or just spend time browsing their inner-selves with one type of media or another has never been larger.
When it comes to newsstand it should be noted that newsstand is not the only source of revenue for publishers, but it is a major player in our search for commercial continuity of our products and our income.
And that brings me to the PBAA-MPA annual event this year in Philadelphia. It is officially called The MPA and PBAA Retail MarketPlace Conference. The purpose of the conference is the discussion of the important issues in the retail chain of the publishing business and the on-going efforts to drive sales, understand change, and hopefully create new revenue opportunities.
As publishers, we are in a unique position. No other industry faces the long tail of commerce as we do. Farmers grow apples, peas, pears and other products that never change in the process of retailconsumption. Sara Lee sells the exact same formulaic pie over and over again to great success and consistency. On the other hand, our products must change with each and every delivery. We start with different words in each new product, and then we add new design, new art and a new layout. We put it all together on paper and ship our product to the retailer. What other product can you name that changes completely with each and every delivery, yet still has to satisfy the customer time in and time out?
Clearly we are an extraordinary industry with an impressive history. Impressive up until now, that is, because in the last 5 years we have lost between 40 to 45 percent of our newsstand sales. On top of that there have been radical changes in distributors and wholesalers, none of which has been a positive advancement for our industry.
With all that said and an understanding of the peril and importance of the retail side of our business, I can finally get to the PBAA-MPA conference.
Right off the bat I think credit has to be given to Mary Berner, newly appointed President and CEO of the MPA, who somehow managed to corral the four top players in the industry to sit on the opening panel and discuss some of the realities of the business from the Mount Olympus perspective of publishing. It is important to understand that behind the smoke and mirrors of congeniality, these men are strong competitors, maneuvering for a still shrinking share of the retail market, who yet share the commonality of the need to be successful as an industry on the newsstand. The panelists on the dais were: Stephen M. Lacy, chairman of the board and CEO of Meredith Corp.; David Carey, president of Hearst Magazines; Bob Sauerberg, president of Condé Nast; and Efrem “Skip” Zimbalist III, chairman and CEO of Active Interest Media (AIM). I will gladly admit that I was excited to see them all on stage at the same time and being interviewed by my good friend and long-time debating partner Samir Husni.
Samir correctly acknowledged and asked the panel if the magazine sales declines that commenced with the recession in 2008 will level off any time soon. David Carey suggested that retail magazines have faced several issues that have coincided at the same time. He said that customers were making fewer trips to the market and thereby having less opportunity to see our magazines at the checkout counter. He added the complication factor of the “mobile blinder” syndrome. I think that this condition would be funny, if it wasn’t so serious to the magazine industry. “Mobile blinder” syndrome is when people on–line at the store pull out their smartphones and check emails and other life important events rather than looking at our beloved magazine racks for that all-important magazine impulse buy. It is worth noting here that our industry spends tens of millions of dollars for racks and the privilege of being at what at one time was the right place at the right time. Now that concept may have to be reviewed for success if “mobile blinder” syndrome continues, and really, why wouldn’t it? Someone on the panel noted that we all do the same thing, if we are standing still for more than a just few seconds.
David said that, “We have to co-opt that experience at the front of the store” and be as innovative as possible” … He said “I’m not sure we’re going to reverse the slide, but I think there’s a good chance to moderate it.” To me this was of critical importance for an honest assessment of the current market conditions. And having David acknowledge that we may not be able to reverse the slide but we may be able to slow the sales direction, is bold, honest and eventually helpful to all.
All the other panelists agreed with the change in shopping dynamics and Steve lacy added that the stores the consumers shop in have changed as well. He went on to express how hard Meredith is working on their products. He and many other panelists in the morning and also the other sessions talked about the success of SIPs, especially bookazines. Steve said, “I think some things will continue to decline, but I also think we’ll continue to innovate with new and different types of products that will help fill in a consumer need.”
Condé Nast’s Bob Sauerberg called for an end to the sales trend by saying, “We have to stop the decline.” Bob emphasized the need for all supply-chain partners to work together, and that everybody has a role to play in fixing the problems. He also said, “This industry has brands like no other, it has assets like no other, it has editors and consumer marketers like no other . . . We’ve got to work together to product-ize those things, to get to retailers and really move the needle.” This “work together” plea I have heard for many years at the PBAA. It has yet to reach the full accord it deserves, but I am forever hopeful. Sometimes genuine peril has the advantage of bringing together those elements that don’t want to play together, but in the end must do so to survive.
Another common conversation thread was brought up by Skip Zimbalist of AIM. He talked about the time and research spent on his covers and about working with his various retailers to select the right locations for his titles. A key point made first by Skip and then many others for the next two days was the proper use of multiple publisher databases combined with the retailers’ databases to help identify and motivate directly to the consumers.
This talk of big data was repeated at almost every talk by one speaker or another. Some speakers suggested there is too much data and that it was overwhelming. If that is the case, than it is just proof that we don’t yet have the programs to properly analyze the data received. It is my opinion that there can’t be too much data, but there can be inefficient to awful programs that analyze that data and deliver reports that are not readable or understandable by your typical professional. We don’t need better professionals, we need better reporting systems that convert our terabits of data into usable, easy to understand calls for action.
At one point Samir asked, “How important is the retail consumer magazine buyer to publishers?” At first I thought that was strange softball question, as without the retail customer there is no sale of any magazine, but Samir’s wisdom showed through with some interesting answers.
David Carey said that Hearst magazines sells more than 4 million copies a month on the newsstand and that those economics are very important to the company. He explained how they use the retail chain to test and develop new magazines. David went on to say, “We live in an on-demand world, and retail sales can satisfy that need.” I thought that a very interesting point and one that I hadn’t considered before, where consumer satisfaction of an instant on-demand “need” could be delivered with an analog product, that happens to be in the right place at just the right time. Good job on that point, David. That’s why he is where he is, and why I’m just the pundit.
Throughout the show the topic of higher than typically priced magazines called Bookazeens was discussed. These books have been profitable for everyone involved up and down the retail chain and bucking the downward trend of publication sales. Bob Sauerberg said, “This is going to be a big piece of the sales potential over the next few years, and I think the better we get at it, the better the sales and profits for the retailer.”
Steve Lacy said that Meredith has been making special interest publications since 1938. I thought that observation was pretty cool, and proof that nothing is as new as an old idea.
David Carey pointed out, “With the high price-point and longer shelf life of these titles, they have very good economics for us.” (The longer shelf life is another part of the retail story of magazines that hurts the cash flow of wholesalers, and I will discuss that in my next posting)
I see that this article is much longer than I had intended, but I will confess that the show was an important dialog in our efforts to continue to successfully sell magazines to the public. The length of this posting suggests the significance I hold of this topic. I will write another report, let’s call it Part II over the weekend to discuss some of the other equally important discussions that happened in Philly.
My many thanks to the staff of the MPA and to Jay Annis, of Taunton Press, Jose Cancio and Lisa Scott, both of PBAA for a great show and all the hard work of many years.