1. The race to transition business models accelerates.
The imperative to monetise massive investments in digital platforms becomes more urgent as core print advertising / circulation revenue streams come under increasing pressure. Successful transformation from print-dependent to integrated, all-platform media entities amid continually evolving technology, platforms and audience demographics / behaviours hinges on a cohesive guiding vision - a reality underscored by the choice of digital maven Laura Lang to lead Time Inc.
2. Mixed news for print economics.
Leading forecasters’ 2012 projections for US print magazine advertising spending point to declines ranging from about 2% to 4% (on top of a weak second-half 2011). Newsstand units and revenue continue to drop. (US single-copy dollar sales were down 10% in Q3 2011, and US / Canadian units were down 11% for the first nine months, per MagNet.) Postal rates for periodicals and direct mail both rose 2% in January - and yes, direct mail is still an important source for many titles, despite great strides in shifting new-sub / renewals marketing to digital channels. As for raising print sub prices, or cover prices on regular newsstand issues… ha!
However, there’s good news on the critical paper front: publication-grade paper prices should fall during 2012 (although leap again in 2013). Also, at least two majors are successfully bolstering overall newsstand revenue via high-priced “bookazine” specials: Time Inc’s newsstand dollars were flat in Q3 2011, and Wenner Media’s were down just 3.9% (versus drops of 9% and 20% for Hearst and Meredith, respectively).
Still, Justin Smith, president of Atlantic Media Company - which recently reported that its digital ad revenue has surpassed its print ad revenue - sees print magazines facing more downward pressure in 2012 than the previous two years. “Print pages will drop by more than 5%, print subscriptions / newsstand revenue will also fall faster,” and print circulation will be only partially replaced by digital subscriptions, he told Folio:.
3. Intensified efforts to attract new digital readers and convert print die-hards.
Or at least get print adherents to try digital.
Affinity research for MPA found that 54% of 187 million Americans who interacted with magazine content during the study period did at least some of this via the web or mobile devices. But that leaves 46% who did not. Of these, 54% said they simply prefer print and 44% said they have “no desire” to read in digital. Just 18% said that they expect to switch to digital at some point, with 13% attributing their hesitancy to lack of familiarity with using digital platforms. The study also found that 95% of the total magazine audience still consumes some magazine content / advertising in print form, with 48% using both print and digital.
Hanging onto enough print readers to preserve print revenue streams at least until digital economics reach the tipping point is, of course, the crux of the challenge. This is one driver behind Time Inc’s “all-access” bundled marketing strategy, and it appears to be working. Looking at total / all-brand audiences among 12 majors, Affinity found Time Inc having the largest percentage of readers (30%) who access content through both print and digital, versus 15% being digital-only and 55% print-only. (The digital audience tallies spanned access by websites, mobile devices and social networks.)
Not surprisingly, given its young demographics, Wenner had the largest digital-only readership (27%), with digital / print crossover readers at 18% and ‘print-onlys’ identical to Time Inc’s 55%. Condé Nast, Hearst and Meredith respectively showed ‘digital-onlys’ of 13%, 11% and 7%, and crossover readers at 20%, 24% and 14%. Among the four largest publishers, Time Inc included, print-onlys ranged between 55% and 79% of readers, or an average of 66.5%.
While their overall digital / print strategies differ, virtually all consumer magazine publishers will be pushing in 2012 to better leverage social media, in particular, to market digital-platform offerings. The reasons: digital users in general are shifting from search engines to social media; and consumer magazines to date aren’t so great at social media marketing. (The L2 Think Tank found no correlation between magazine brands’ numbers of Facebook fans / Twitter followers and their subscriber bases.)
Publishers are, of course, delighted by tablet / e-reader growth. As of May 2011, Pew Research found 8% of US adults owning tablets and 12% owning e-readers, and penetrations have undoubtedly risen since. (For starters, Amazon’s Kindle Fire, which didn’t launch until mid-November, sold 3 million units in its first three weeks.) As for getting device users to buy magazine content, the other good news is that apps are getting somewhat easier to find due to Amazon’s newsstands for Android and the Kindle, Apple’s newsstand (inadequate but better than nothing) and search tools like Appbrain.com and Appolicious.com.
4. The mandate to cover all of the platform bases.
I haven’t even scratched the major mobile, video or e-commerce developments afoot (fodder for future instalments). For now, suffice it to say that publishers are also grappling with how best to employ HTML5 and native apps to ensure user-friendly experiences for the exploding population of smartphone users, as well as conventional computer users… among other tech challenges.
Dan Lagani, president, Reader’s Digest North America, offered a pithy summary of the current scenario. “The greatest challenge for all publishers is how to successfully address the variety of digital platforms available to consumers” and which they prefer for content consumption, which requires staying abreast of “a constantly evolving digital landscape, including social media,” he noted to Folio:. “That said, we can’t lose focus on the fact that the vast majority of our consumers still embrace our printed products. The key will be finding innovative ways to create the ability for them to seamlessly move between our print and digital brand offerings.”
