2009 isn’t likely to be a year that engenders fond nostalgia among many in the print sector, regardless of geography. And if ZenithOptimedia and GroupM are even close in their projections for 2010, the year ahead will bring more declines in ad spending in North America, albeit in the single- rather than double-digit range.
But new years are meant to be a time of optimism, and it is of course far more constructive to focus on the positives and potential opportunities than to wail and gnash one’s teeth. So let’s start the New Year on some positive notes.
OK, it’s not exactly time to pop the Champagne, but according to MediaFinder.com, the US “dead print magazine” tally is slowing. As of mid-December, the service reported a count of 428 magazines folding in 2009, which was actually an improvement over 2008 (613) and 2007 (643). While launches were also down (275 in 2009, versus 335 in 2008), I choose to read these numbers as a possible indicator that the worst of the print magazine carnage may be behind us.
Similarly, I choose to postulate that 2010 is unlikely to bring many more significant magazine staff purges — not only because the magazine shakeout is slowing, but because print and general-function staff counts on remaining properties are already at the skeletal level.
Good news at the newsstand?
And yes, 2009 was a horrendous year for the US newsstand, what with the demise of one of our largest wholesalers creating months of distribution turmoil that exacerbated the economy’s impacts on sales of magazines and nearly all discretionary items.
The good news? Barring a double-dip recession (oops, forget I mentioned that!), it does not seem too Pollyanna-ish to observe that the newsstand has nowhere to go but up, at least in relation to 2009. Further, newsstand players made some progress in cooperating to promote the entire category for the greater good last year. For instance, there were two category-wide promotions within supermarket chains that produced unit sales bumps of 8% and 15%, and we saw the start of organised, cross-publisher / distributor efforts to convey the profitability of the magazine category to retailers and actively assist key retailers in identifying and closing magazine sales / profitability gaps within their chains.
The work ahead is daunting — particularly given retailers’ disillusionment with the category after last year’s distribution “interruption” and their greater-than-ever focus on product categories that can drive significant growth. Still, the newsstand sector also has some powerful new data to make its case for maintaining critical supermarket checkout display space. The latest study by Time/Warner Retail and co-checkout giants Mars, Wrigley and Coca-Cola confirms that magazines are one of three “power categories” at the front end. Magazines account for 25% of sales and profits (putting their performance on par with beverages, and only slightly below confectionary). Still, category leaders will have to marshal substantial focus and resources to leverage such data effectively within the retail community, as well as jump-start retailer enthusiasm with promotions and every other tool at their disposal, in order to stem disadvantageous display trends and get sales gradually back to pre-recession levels.
While print magazine subscription trends and practices aren’t likely to change radically in 2010, we can count on even more accelerated internet efforts. Major publishers will keep focusing on reducing costs and upping payment rates by shifting as much renewal and customer service activity as possible from print to online channels. Even more important in terms of the longer view, we’ll see even more stress on establishing more content-based relationships with prospective and existing customers, with an eye as much (or more) on marketing online tools and apps as subscriptions.
The year of the eReader?
Of course, the most pivotal or ground-breaking work for the consumer magazine industry in the year ahead will lie in attempts to establish a beachhead in the eReader / mobile device arena. Since my last column, you’ve no doubt read that the “consortium” of consumer publishers spearheading this battle has been officially announced. The plan, while still taking shape, does indeed call for Time Inc, Hearst, Conde Nast and Meredith — plus News Corp — to work out format standards enabling magazines to be effectively showcased (with magazine-worthy design and graphics and interactive features) across a broad range of devices and sold via a centralised, iTunes-like store.
On that front, two elements are particularly intriguing at present. One is Hearst’s own separate announcement that, through Skiff LLC, a Hearst-incubated company formerly called FirstPaper, and Skiff’s work with semiconductor giant Marvell, it will soon unveil the first “system on a chip” to enable wireless device manufacturers to offer optimum reading of magazines, newspapers, books and content from multiple publishers. Skiff will also sell the digital content, and offer a connectivity service through a Sprint partnership, as well as an advertising system complete with standards, formats and metrics for eReading. How does all of this mesh with the “consortium” (which apparently has no joint hardware development plans)? Stay tuned.
Meanwhile, the addition of Rupert Murdoch to the consortium may not make the participating magazine executives’ lives any easier, but it’s bound to up the enterprise’s negotiation and leverage quotients.
In short, whatever else 2010 may turn out to be, it will not be dull.
