I woke up early this morning and decided to crack on with trying to write this article. I made myself a cup of tea, sat down at the computer, opened up bbc.co.uk, and was immediately drawn to an article entitled ‘Crisis in the US newspaper industry’. The article pointed out that a slew of newspapers in the US are closing down and for two main reasons: readers are accessing news online for free, and advertising revenues have collapsed due to the economic downturn and due to advertisers moving online as well.
To readers of this magazine, this will not be news.
In this article, I will summarise my thoughts on the future of publishing: on why printing will never die (but is largely doomed all the same), why a lot of printers should be looking for jobs outside of printing, why editors need new skill sets, and why the publishing landscape will change more in the next ten years than it has in the last fifty.
Back to basics
Let’s go back to basics: real basics. Every business needs to bring in more money than it sends out. It took me a few years to work this out after I had started up my business with a partner in the mid-90s, but now we re-affirm this central tenet of business every day. If you think that this is too simple, and that everyone knows this, just recall the dot-com bubble, the current horrendous state of the banks and the level of corporate (and personal) bankruptcy. As Evel Knievel said, “I had a great life: I made $50m. Only problem wuz, I spent $51m.”
We also have to have that money in at the right time, whether it be cash, credit, factored money or through not paying it out. That’s what is slowing down the money-go-round at the moment. As companies and as individuals, this will hopefully be a temporary problem, which will reduce as the banks free-up a bit more credit.
Once you have these two basic pillars of business in place, you are off to a good start – you may eventually start to earn some proper money. For good or bad, those of us who read this magazine have decided to try and make some money through publishing – as publishers, editors, sales-people, printers, distributors, web-masters – anyone who thinks they can make some money by putting words and images on page or screen and charging money for access (either to readers or advertisers).
Let’s be straight about this – publishers make their money through controlling access in one way or another. In a printed magazine, the publisher makes his money by selling the magazine or by allowing the advertiser access to the readers’ eyeballs. Online, the same applies (only most content providers don’t charge for access to online content – whose bright idea was that?). Everything else is a cost – the cost of editorial, of administering subscriptions, of collecting money, of putting ink on paper, of shipping magazines around the world, of maintaining websites – and of employing people.
Publishers have been making money for centuries (although Johannes Gutenberg seems to have been the first printer / publisher to have gone bankrupt through his efforts – back in the mid-15th century). Now we are going to find it a little tougher – and we are partly to blame. We have killed the golden goose with our own hands.
Burn the internet!
In the olden days, before about 1995, we used to enjoy a well-printed magazine. They would arrive through the post, or be bought at a shop (remember those?) and we could then read them at our leisure, perhaps over the course of a week or more, while we enjoyed flipping backwards and forwards through their colourful, glossy pages. Those were the good old days. Then some bright spark (Sir Tim Berners-Lee and his pals) invented the internet, allowing anyone to post content to a central place, and allowing anyone to access it (albeit via security if desired). This was the beginning of the end of ink on paper. It just makes so much more sense than chopping down trees, making them into paper, putting ink onto the paper and then sending the product out to the consumers. After all, if we were trying to think of a viable business model, we wouldn’t come up with that one. It would be laughed out of the Dragons’ Den. It’s a pleasure to read a magazine, but when it comes to money, the equation is no longer balanced.
Back in the early days of the internet (ahh, remember 1998?) some content providers started putting content up for free, hoping to pay for the bandwidth and other costs by selling advertising. So far, very few sites have ever managed to make a buck out of doing this. However, those early sites were teaching consumers a brilliant new trick – content on the internet is free! As we’ve seen, if it is not provided free legally, those pesky consumers will set about providing for free – illegally - for themselves (and hoping to make a profit for themselves in the process – with music downloads, films and even magazines).
The problem is that so far we don’t have an economic and universal system of micropayments – where we can get our users to pay 5p or 10p or 25p (remember when newspapers cost 25p?) for their content – rather than give it away. In the meantime, the majority of websites are stuck giving away their content. I hold out some hope that a universal micropayment system can develop over time (after all, tin openers weren’t invented until some 40 years after the invention of canned food).
So what can we do?
Since the income side of the equation is reduced (due to the internet and due to the current economic malaise), we need to reduce the cost side of the equation. Publishers need to look at every area of cost – and reduce it.
In practical terms, this may include cutting staffing levels, cutting hours and pay, getting quotes from printers for your current jobs (and going with the lowest or near-lowest printer), moving your distribution to the lowest cost provider, reducing your paper weight, cutting your print runs (either by making digital editions available to your readership – as we have done since 2004 – or by updating your database and cutting out all ‘dead wood’ and duplication), going controlled or semi-controlled (to increase subscriptions and to increase advertiser rates), looking for new premises, renegotiating existing rental agreements, tightening up on perks… in short, every area of cost needs to be looked at with a dispassionate eye – and reduced by 10, 15 or 20% at least.
However, in my humble opinion, this is all just a process of rearranging the deckchairs on the Titanic. Plucking a number from the air, I would suggest that the number of printed titles will halve in the next ten years. Print runs will inexorably drop, as digital versions take over from print. During the same time, the number of printers will more than halve, as publishers shift work to larger, more automated, more specialised, more efficient and cheaper printers.
The post-printing age
Just as we once saw supersonic airliners in the skies and a man walking on the moon, one day we will tell our children that, yes, they really did put ink on paper. They won’t believe us.
To see how the future of printing will work, you need only look at the more advanced publishers now. They provide well-written content, which has been through the brain of an experienced editor. They provide exclusive content (be it an old-fashioned scoop or well-thought-out analysis). They give it to the consumer when they want it (online, via mobile, via email, via digital editions – today’s journalists will have to master all these new channels to the consumer). They control access to the content and charge for that access (either by subscriptions, or via micropayments) and they have cracked the advertising nut. Critically, they have realised that publishing is not where the money is now to be made. They have expanded their business models to encompass sponsorships, events, festivals, exhibitions: anything that can’t be undercut by that pesky internet (yet).
The Noughties turn bad
These are tough times for all of us. One printer I spoke with recently told me that 15 years’ ago, his company’s margins were at around 15%. Now they are at 1%. I asked him where he thought he might be in five years’ time. “Retired, hopefully,” was his reply. With the current calamitous debt-burden of the country, the possibility exists that he may still be working, but probably not as a printer. Every realistic publisher will have already undertaken the cost analysis and cutting exercise suggested above – transforming themselves into a leaner, fitter and more profitable business. Let’s face it, some of us might not make it. This year, and for a couple of years’ hence, survival is the key. After all, if we are not making money at this game of publishing, we are all just busy fools.
Now, I’ll just check on bbc.co.uk to see if anything else has happened in the world, and then it will be time for breakfast.
