As hundreds queued around the world for the latest Apple iPad an Australian media tycoon told a business breakfast that newspapers were a sunset industry. Where does this leave magazines and other print media?
The last decade for magazines has been tough, as readers drifted to largely free websites with the advertisers following. The challenge for publishers is how do they follow their markets onto the web while still making money.
Magazines aren’t unique in this challenge – the media industries, like many others, have been affected by the rise of the web. Magazines themselves sit somewhere between the recording and newspaper industries with news stand sales and subscriptions being a bigger proportion of incom while not having the same newspaper classified income which has collapsed so dramatically in recent years.
The Shift Online
We’ve seen a massive shift to the web over the last decade and that movement is only accelerating as advertisers start to follow consumers and the public embraces social media and online gaming.
PriceWaterhouseCooper’s Entertainment and Media Outlook forecasts the magazine industry to lose 1% of advertising market share – from 5 to 4% of the overall spend – over the 2010 to 14 period with all the losses going online.
While the magazine industry looks at losing 20% of its advertising revenue to the Internet, figures are similar for newspapers, radio and free to air television with online advertising moving from 18% to 26% of the market. The advertisers are, quite rightly, following the customers.
Following readers online is the great challenge for the magazine industry, the question is how do they do it and continue to be profitable.
The Internet Challenge
The greatest problem on the Internet is making money, businesses have trained web surfers to expect online products – particularly news and entertainment – for free. Even physical goods have become increasingly commoditised as deal of the day and group buying sites have used “cheap” as the main hook for buyers.
Today’s reader and consumer expects goods they find online to be cheap and any content they discover to be free.
That isn’t fatal for a business as the broadcast television industry has shown us you can provide free content paid for by advertisers and make a good living while there’s no shortage of merchants who’ve built empires on the fast moving consumer good model of “stack ’em high, sell ’em cheap”.
Part of the online magazine industry’s response to the challenge of adapting to these models has been to use free labour. The rise of the Digital Sharecroppers, where writers provide content for free, has been the result.
People have been prepared to provide content for free for all manner of reasons. The problem for publishers, and readers, is quality writing is not sustainable under this model and we’re beginning to see the end result where writers are forced to drive buses and the free content is being increasingly sourced from PR agencies, their tame blogger bunny friends or from content farms more concerned about gaming Google through SEO keywords.
Free content also reduces the barriers to entry, which are already extremely low in online given a geek with a WordPress site or YouTube account can have a site up and running in a couple of hours for less than a hundred dollars. If content is low quality, there’s little reason for readers to have any loyalty or to stick to any one site.
There is the other type of free content though, User Generated Content (UCG) consisting of the comments, forum posts and free articles submitted by readers. Many of these followers are fans and this is perhaps where salvation for the magazine industry lies.
What formats can we expect
The old magazine format isn’t going to go away, it’s just going to decline as part of the overall distribution. We’re going to see more short and long format online content complimenting the magazines along with a lot of user content in the comments and forums sections.
We’ll also see more cross platform selling like we currently see with magazines like Better Homes and Gardens though with a much bigger online and interactive component than the present TV-magazine tie ups.
Content though will be more important than format. The SEO driven plays and content farms are a transition effect and as both search engines and readers become more savvy, the influence of sites like eHow and The Huffington Post drop away.
Probably the biggest sleeper though are the electronic readers such as the iPad and Kindle, it is just possible these devices might resurrect the fortunes of the publishing industry in a similar way to the Compact Disk did for the music industry in the 1990s. Certainly Rupert Murdoch is hoping this.
How will magazines engage with consumers in 2020?
Successful magazines are going to find the niches where readers and advertisers will pay to be engaged and identified with key groups, demographics and markets. Adding value to readers is going to be the key to revenue on an Internet that is full of noise of movement but with increasingly fewer nuggets of wisdom.
It’s those nuggets of wisdom, useful analysis and unique worthy content that will be what time poor and somewhat information addled consumers are going to be looking for.
They are also going to be looking for a platform to get their views heard. So it’s going to be critical that magazines make that platform available through comments, forums, reader blogs and giving loyal and knowledgeable readers the opportunity to write for the publication.
Engagement is going to mean allowing site visitors some ownership of the content. The more you can build conversations and contributions around content, the more likely it is that readers will come back and the more likely they are to pay for add ons and read advertisements.
Where will the revenue come from?
The great challenge in the Internet era is making money online. We’ve trained the market to expect news and information to be free and that genie is now out of the bottle, and despite the paywalls we try to put up, we’re going to struggle to convince readers of our value.
As writers, journalists, editors and publishers, we’re going to have to demonstrate our worth to the people who are prepared to pay for content. Right now there aren’t many of who will pay for relevance and quality, but things may be changing as readers realise much of what they currently find on content farms is unsatisfactory.
Subscriptions and advertising are still going to be critical while events, merchandise and other revenue streams are going to be useful revenue centres but it’s hard to see how they will contribute to the bottom line any more than they currently do. It’s also important to remember that successful staging events is an expensive task involving skills many publishers simply don’t have.
Hyperlocal is a fascinating area for magazines. While much of the focus has been on adopting local search to the newspaper industry it could be that specialist magazines can deliver effective localised products through directories and mobile phone applications.
For instance let’s say we have an offal magazine for those who like to offal. A Brisbane businessman visiting Adelaide feels like a plate devilled kidneys for dinner. It could be that Offal Eaters Monthly magazine has a paid app or a subscriber site that allows him to find what he wants in a strange city.
What is the role of the publisher/editor?
More than ever the publisher and editor are going to have to know their market intimately. At a time when audiences are going to be widely fragmented it’s going to be essential to understand what the readers want.
User generated content provides an opportunity for publishers and their editors to understand the market and monitoring what is being said by the target audience is going to be a key role of the modern editor.
Moderating and controlling what’s being said on the platform will also be a key role for an editor. We all know the Internet is God’s gift to opinionated idiots and the risks of defamation, piracy and other brand damaging activity on websites are very real. The editor’s job will increasingly be to filter out the lunatics while encouraging interesting discussion.
Most people though don’t want to create content, beyond having a quick comment on a post or sometimes joining a discussion. Another important role of the editor is to balance the higher quality, paid content with user generated material to ensure the publication’s site doesn’t dissolve into just another web forum.
Publishers too are going to be challenged by this and their task is to find the deep niches where these models can succeed then convince advertisers and subscribers that their sites are worth signing up to.
Given the ease of launching new sites, the key to success is being the trusted leader in your segment. If your content can be easily replicated or bought from another source then the survival odds are firmly against you.
The next nine years
We should also keep in mind change isn’t new, broadcast television gave a death sentence to news magazines like Life or the Bulletin a generation ago, and these publications only survived because of indulgent owners. The magazine industry met those challenges, evolved and survived albeit with great change and a few casualties.
The same is happening now, the industry is evolving and adapting to the new mediums and the changed behaviour of advertisers and readers. It’s not pretty or easy but the rewards are going to be there for those who figure it out.
Had we been around when Gutenberg invented the printing press we would have wondered what will happen to all the monks who up until then had spent their lives manually copying religious texts and important documents. Change came to the monks, but not in the ways they expected.
The web only recently turned 20 and in 2020 it will still be less than thirty years since its invention. All of us will still be learning, making mistakes and discovering where the opportunities are.
It’s a time of challenge and the rewards for those who get it right are great. The key for magazines, like all of us, lies in understanding our markets and audiences.
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