Those who don’t learn from history are doomed to repeat it, goes the adage… and listening to print media managers, I would almost think we were in 2001-2003 again. Let’s flash back to that era, or the February 2001 issue of Maxim, to be precise, where the lad mag’s editor Keith Blanchard proclaimed in his Editor’s Letter (!):
“The Internet Bites: What are you doing on the Internet today? (…) I can’t believe Al Gore invented this crap.”
Sure… at that time, I understood his frustration. I was running Maxim counterpart AskMen’s ad sales strategy as we ate away at their market share. Largely due to their digital apathy, we became the largest in the men’s space. To this day, I ask: why did Maxim not buy AskMen? Or for that matter, Conde Nast, Playboy, Rodale, etc.?
The truth is they were afraid of acquiring a disruptor, I think. That understanding explains how I’ve crafted WatchMojo.com’s strategy as we essentially seek to disrupt the television media space through the online video content sector. Mind you, due to Hollywood’s fear of cannibalization, I see online video as a salvation for print (because it is all incremental) but as I like to say: when it comes to traditional media and online video: those who want, can’t; and those who can, won’t. But that is a separate post.
To stay on the topic of print media: if you need any further explanation of why Maxim’s parent Alpha Media Group’s EBITDA plummeted from $28M to $8M in the one year since the company went private, look no further than that management philosophy.
Admittedly, the truth is: print media’s dilemma is rather complicated, as
- women-oriented publications will continue to do quite well,
- the outlook for newspapers and magazines will probably be rather different.
But first, let’s fast forward to 2008, where the slowdown in advertising revenue is making the 2001-03 era look like a boom.
Now, I read that magazines will react to the decrease in advertising revenue and circulation numbers by cutting online headcount:
The operating policy now, particularly at Condé Nast, basically reads: Revenue first! Future later.
And the printed page, the luxury object, is still where you find the money these days.
“The print reader’s worth a whole lot more [than the online reader],” said publisher Jann Wenner in an interview with Advertising Age last week.
Mr. Wenner is no slouch, he founded Rolling Stone magazine. But that mindset is not limited to the B2B space:
[Business-focused] Portfolio, a magazine that had one of the boldest Web sites in the Condé Nast empire, let that experiment go two months ago when it dismissed 25 of the 30 people who worked full time and as freelancers for the magazine’s Web site.
And why? Partially to save the magazine.
The magazine lost close to $20 million this year, and with the magazine’s Web site losses also totaling in the millions, Condé Nast group president David Carey, along with Condé Nast editorial director Tom Wallace, played a large part in convincing Condé Nast chairman Si Newhouse and CEO Chuck Townsend to keep the magazine afloat at a reduced publishing schedule. But to essentially gut the Web site.
Across Condé Nast, publishers are making a calculation about the revenue of the present versus the promises of the future.
“We work in the high-end market,” said our Condé Nast source. “We’re going to stick to it and we might be the last one standing, but that’s our philosophy. The Web isn’t really a priority.”
The result is little - if any - original and fresh web content:
“It’s nothing now,” said one recently laid-off staffer. “There won’t be any more fortune.com original content in the near future.”
While the perception remains that the “higher-up’s” (ie. editors, publishers, management, owners) seem to put their heads in the sand, the journalists - bloodied by rounds after rounds of layoffs - seem to be reading the writing on the wall.
The New York Times’ Joe Nocera burst out of his seat during a question-and-answer session and strongly disagreed with the editors and wondered how they could be so sanguine about the future of print.
Of course, the philosophical, theoretically correct answer is that there should be no distinction made between an online and offline writer or for that matter, content… but the truth is, Mr. Wenner is right: right now, an offline reader is worth much more, but this has more to do with the fact that print dates back two centuries whereas online dates back two decades.
Moreover, while Mr. Blanchard’s philosophy might have worked in 2001 when marketers were still trying out online advertising. Today, marketers’ mind is made up: tracked and targeted media beats out traditional channels. The only problem is that new media remains embryonic and the transfer of wealth from traditional media to new media won’t happen overnight. As such, being so sanguine and stoic might prove foolish before long.
After all, this time around, it’s not online advertising budgets that are being savagely slashed, it’s print. Case in point: Dell’s $50M back-cover print ads.
Is print going to zero? Probably not, but there is no doubt that online will be the biggest media after television, and might even surpass television within one decade.
- Venerable private equity bank Veronis Suhler Stevenson (VSS) projects that to occur by 2011.
- Our estimates forecast online advertising to surpass TV advertising by 2021.
Ultimately,
- newspapers really have no business being distributed via print media and the Web medium suits their content rather well (timely news, short articles, etc.) whereas
- magazine content, dare I say, works better in glossy print packaging. The problem with magazines, frankly, is that the only viable magazines are women-oriented publications as men have flocked to the Web. As such, despite the aesthetic merit to publish in print… the ultimate conclusion is that any company (forget media or print company, we’re stressting any in all industries) that does not have a thorough digital and interactive strategy is doomed.
All I know is that TV executives better be following the storyline in print media, because within a decade, if not sooner, their media’s day of reckoning will be here, too.
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