When I last wrote for InPublishing in May 2004, I had just taken over as managing director of COMAG – was it really that long ago?! That article went under the headline, ‘A category worth fighting for’ and I pulled it out of the drawer with some trepidation to see whether I had said anything especially stupid or embarrassing. Thankfully it was only my picture that made me cringe!
What struck me most from that piece over seven years ago was that much had changed, but that many of the issues we are dealing with are exactly the same.
I was pretty big on how wonderful printed magazines are as a medium and that we shouldn’t be too scared of the digital revolution. Well, that is certainly still true and whilst publishers have created a plethora of digital formats to give the consumer options, the ink on paper versions are still by far the format of choice for our readers and we haven’t fallen off a cliff like CDs, DVDs or books – in fact there is no cliff in sight and we should be getting more confident about the long-term appeal of our products.
Economic gloom
What I hadn’t predicted was the chronic economic downturn, but I guess I’m not alone in that and had I possessed that kind of foresight, I would be a lot richer than I am! Along with many other industries, it is the impact the economy has on people and their ability and willingness to buy our products which is currently our biggest challenge. In that environment, businesses are under real pressure and it is harder to drive progress or to strive for excellence when ‘good’ is always cheaper - sadly ‘good’ may not be good enough.
And bloody hell, it is hard going. I have a terrible memory, but I do remember this industry being creative and inspirational and that new titles were launching all the time. I think it was fun! Now we’re all looking for ways to save money and the pressure is resulting in more negativity and moaning and complaining from all sides. We need to find the joy again!
The OFT revisited
There was also plenty of stuff about fighting for the future of our industry which is so effective at putting such a wide choice of magazines in front of so many consumers. When I was writing in 2004, we were deep into an OFT review into the legality of exclusive distribution contracts and had I realised how long that would take, I might have been less bullish about the fight ahead. The OFT finally published their guidance in October 2008 and as we have subsequently seen, the world hasn’t ended.
Coincidently, the OFT are currently undertaking their scheduled prioritisation review to decide whether to revisit the NFRN request to make a market investigation referral of the news and magazine distribution arrangements to the Competition Commission. Having worked with the PPA on our submission to the OFT, I am still convinced that our supply chain serves the consumer well despite the digital and economic challenges we have faced over the last few years. I am also more certain than ever that the alternative to a publisher led supply chain based on exclusive territories and a shared network of distribution would be an expensive mistake for everyone involved, but perhaps especially for smaller publishers, independent retailers and for consumer choice and access to newspapers and magazines.
So I’m still fighting that battle and may be a little punch drunk, but I’m hopeful that the OFT will still see the consumer benefits of the current model too!
Did my 2004 recommendations hold up?
I was also rash enough to make four recommendations in 2004 - how did I do?
I argued that publishers needed to continue to produce great magazines. Whilst I do think too much time, energy and resource has gone into preparing for a digital future rather than protecting our print present, there are still plenty of great magazines being published. Yes, I’d love to see some big new launches, but the quality of British magazines is still the best in the world.
I argued that we needed to improve sales efficiency to stop wasting shelf space, fuel and trees on feeding the recycling industry. Some great work has been done on copy allocation and Sales Based Replenishment and the percentages have improved a little, but there is a long way to go and this is still a key challenge to keep this category affordable.
I urged retailers to differentiate their offer in order to maintain choice for the consumer as I felt there was pressure for magazine shelves to become more similar; that larger stores would cut back the breadth of their range and that the move to convenience formats would mean more outlets just focusing on the top sellers. This may not have happened as much as I feared in 2004, but there have been some massive changes in the retail landscape in the intervening years. We have lost Woolworth’s and Borders as well as a lot of traditional CTNs, all of which have had an impact on sales. New outlets have opened so there are just as many places for people to buy magazines, but many of these are offering limited ranges. I still passionately believe that choice is just as important to this category as impulse and that we need to fight for space in order to avoid fuelling a downward spiral in sales. For all the challenges they give us, WH Smith still provide high street and travel shoppers with a great choice of magazine titles and the largest supermarkets recognise the value of range to meet the needs of their customers and to enhance the shopping experience. Long may that continue!
There are also still plenty of fantastic independent retailers providing their communities with both choice, through the broad ranges they carry, and service, including shop saves and home delivery. This remains an area of potential for us all and I would encourage both publishers and retailers to get involved with the PPA’s Just Ask programme.
Finally, I suggested that we all needed to get smarter to make our businesses more efficient, to focus on what makes us different and to share the things that don’t. I’m not sure I’ve got any smarter but the harsh realities of the economy are forcing us all to think differently and we desperately need to find ways to make our route to market cheaper as well as better. For companies operating in this supply chain, this will be one of the biggest challenges we face over the next few years and we will need to be both creative and bold. At the same time, we will also need to be realistic and careful that we don’t lose what’s good about what we currently have or do too much collateral damage.
So, given that we are sailing in the choppiest waters any of us can remember and that we are still dealing with many of the same challenges we were facing seven years ago, can I be optimistic about the future? The answer has to be yes.
Print still massive
Despite the economic challenges, publishers are still investing in print products. I am still hoping for that big new launch but we have calculated that there were over 12,500 magazine promotions in 2010; Hearst Magazines demonstrated their confidence in the future of magazines by investing hundreds of millions of dollars in acquiring Hachette Filipacchi; Exponent have shown that venture capital sees the potential of print by buying BBC Magazines; the quality of British magazines and journalism continues to be wonderful - just look at the latest issues of Vogue, GQ, the Economist, Private Eye (Happy 50th Birthday to the Eye!) to name but four; and there is still an incredible range of magazines available, just look in WH Smith, a big Tesco or your local independent.
Despite the vociferous protestations of the NFRN, there are plenty of retailers who are positive and understand the commercial realities. In October, I attended a Retailer Forum held by the Press Distribution Forum, an organisation the NFRN has urged its members to ignore in case the OFT forms the terrible impression we were actually talking to each other! The retailers who attended had some real issues and highlighted some important things we really do need to do better to avoid making their lives harder than they already are, but they were also tremendously realistic and balanced.
Despite the challenges to our businesses, there is still plenty of opportunity. In my own business, we are serving more specialist publishers, finding more sales opportunities in niche outlets through Gold Key Media, selling more British magazines abroad and finishing more promotional copies through COMAG Forward than we have ever done.
And despite the pressure to batten down the hatches and look after our own interests, the conversations that will eventually result in our supply chain being fit for the future have started.
So, yes, it is tough and not as much fun as I remember it being, although it’s possible my memory of events that long ago is flawed! And, yes, it has been hard for us to adapt to a declining market over the last few years. There will certainly be more challenges and pressures and fights to come, but this is still an exciting industry which creates over 3,000 regularly published titles and a host of specials every week, month and year. This is still a supply chain which allows consumers to buy the magazine they want, pretty much wherever they want, just about every day of the year.
So I would still rather be doing this than almost anything else, apart perhaps from managing Norwich City, driving for McLaren or playing guitar with the Stones. And I still believe this is a category worth fighting for!
