The Tablet Worsens Magazine Companies Headache

Ever since the iPad was introduced there have been many magazine groups who have hailed it as a savior.

I was very skeptical as I watched my own (big magazine fan) and others usage of content on the tablet.

We now hear of Conde Nast slowing down on ipad development and with circulation piddly everywhere ( Wired made their most recent edition free) the writing is on the wall.

Tablets will hasten the demise of magazines and not save them because…

1)Competition for Attention: When a magazine appears on an ipad it happens to be one of many icons in a sea of icons that I can select from including Angry Birds and Books on Kindle (when offline) or Facebook and Twitter when online.

2) New definition of Content: Professional content creators have always thought that it was their content that was cool. Taking nothing away from their skills I believe they made their money through a) a tight chokehold on distribution, b)the ability to bundle many articles into a magazine and charge for the bundle and c) limited content creation options for others.

But now a) we do not have to buy a magazine to get an article, b) postings by friends or passonistas are as valid as those edited by experts and c) the only chokehold is what the future has around the throat of legacy publishing.

It is time to recognize that there is a new mindset for digital magazines as shown by Flipboard and others and it is not just porting over printed content with some multi media add-ons and the ability to retweet and share.

The future does not fit the containers of the past.

The magazine is a great way to bundle things in print but a magazine on a tablet is just not going to make it.

Update: So what should Magazine Companies do?

1. Double down on print by making the magazine a truly tactile artifact (like Monocole) which people are willing to pay for or pay more for (subscription/advertising split will skew more to subscription)

2. License their content particularly evergreen content to marketers who are working to buttress their “owned” media properties. (If you think your content is so cool why is it that only you are allowed to distribute it?)

3. Recognize that their circulation data is just a tip of the iceberg and there are many other forms of data that can be linked to home address which can be monetized. Advertisers want audiences not spaces.

4. Revisit culture. Stop being scared of founders, ceo’s and some ghost of the past. Magazine companies think they are some temple where one has to be believers. No. Hire iconoclasts and challenge the dogma.

5. Partner with technology companies by doing either joint ventures or riding along with them. They have the tools, the talent, the speed that magazine companies do not. On the other hand magazine companies have some complimentary skills such as a different set of talent, ability to promote and scale (old media still can scale very well and its not just network effects that scale)

6. Go to schools in Journalism and Communication and pay them and their students to invent the future with a clean sheet of paper. If they had magazine company assets what would they do in digital media? Not how would they put a magazine online! Don’t bet only on the McKinsey’s and Bains who smart as they are often in this space are of questionable expertise.

7. If you do not change the mindset of the people or the people you will not manage to change….More on change in my previous post.

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11 responses to “The Tablet Worsens Magazine Companies Headache

  1. Patrick Stimson

    Such interesting points (esp #2). Never thought about how bottlenecked content really was, and the effect of passionista’s is not to be underestimated.

  2. easytofindmeonthesocialgraph

    “Advertisers want audiences not space”

    Advertisers want the attention of an audience. If a space provides that, then advertisers want the space.

  3. Terence Kawaja

    Totally agree Rishad. The other consideration is that with the tablet, magazines have completely ceded pricing control to the distributor – something they would never do offline!

  4. Great article and spot on.

    As my Ipad continues to get more and more crowded with apps/icons, I am reminded opening a brand new computer in the mid 1990′s only to find “desktop” pre-populated with icon’s for everything from ISP’s hoping I will chose them to games and other productivity applications all vying for my attention in the hopes I would make a purchase of the “full application” or subscription. The IPad has reproduced this phenomenon and as Rishadt notes creates increased competition for any magazine or other app that makes money by garnering our attention.

    Perhaps the best line I have read this year: “The future does not fit the containers of the past.” I love this – it sums up everything most folks are missing about the future of digital media. I thinking can also be applied to Web Sites. The Web has developed over the past decade with “site” and “traffic” perspective that assumes that sites need to go out and attract unique visitors to make money from their content. The site mentality (“container of the past”) simply won’t by the basis of the next shift in content discovery online and the changes in the online media world. Rishadt aptly notes that publishers will have to license their content far more broadly to succeed – we agree.

    “Advertisers want audiences not spaces.” – Another gem. The media business is about creating a brand and figuring out how to monetize audience. This business of getting “everyone” to “my site” and then monetizing them with ads “on site” just won’t scale once content can freely “route” by and between sites. (with permission of content owners and payment when required.) If a publisher has a great deal with an advertiser for their audience/content, that audience/content still has value to the advertiser even if the actual impression occurs off the specific site of the publisher.

    All in all – a great piece making great points about the future of online content.

    Gregg Freishtat
    CEO, Vertical Acuity

  5. Being a magazine fanatic, this article is hard to swallow but absolutely true. I wholeheartedly agree with the seven steps they need to take next and would sumbit an eighth: rethink the subscription. While magazine companies continue to hurt, new models of subscription are thriving: Netflix, XBox, CSAs, Bacon-of-the-Month club. People are still interested in paying companies that can regularly curate stuff that interests them and no one curates niches better than magazines. Unfortunately, most of them currently only curate articles and photospreads. So stop thinking about paywalls per article or iPad editions and start thinking about what $50/year can get me in [product/information/experiences/community/etc.] if I’m intersted in [fitness/ food/ music/sports/etc.]. I wrote a bit more about subscriptions here: http://www.denuology.com/yes-i-want-to-subscribe/

    • Dan, agree with your idea of adding an eighth point. Overall as a fan of magazines I believe they have the talent and the assets to soar as long as they do not let their legacy and mindset be an anchor.

  6. Rishad’s post is actually very optimistic. Read: the old magazine business model doesn’t work on the tablet. But, magazine content is still highly valued. I am inspired by the idea of print/tablet living in Symbiosis (the 2nd global truth in my new book). Yes, each platform can support and reinforce the other. The tablet cannot replicate the experience of the printed page, but it will do other things for magazines. The ‘clean sheet of paper’ approach to building the strategy is spot-on. The media have to get comfortable with the fact that they are no longer content aggregators: the days of ‘bundling’ are over in nearly every medium.

    • Judy

      Thanks

      Yes, it is optimistic and in many ways thinking of extending and enhancing versus porting over is the right way. Maybe your students can work on the “fresh sheet” project!

      Rishad

  7. I like #6 – Go to schools in Journalism and Communication and pay them and their students. There are many kids that have become millionaires by inventing software or a product. Think Mark Zuckerberg (Facebook). They can give this generation a new and fresh way of thinking.

  8. I also posted this comment on economistgroup.com where your adapted version of this post appears…

    Thank you for an insightful piece. Glad I caught this post through RSS.

    I do have a question though… You propose solutions for magazine publishers, but I’m not sure you’ve clearly defined the problem. You seem to be criticizing magazines but simultaneously highlighting the innovation of companies like Flipboard who have embraced the magazine form factor, with impressive results.

    So what exactly spells demise for the magazine industry on tablets? I don’t think you’e saying its their cost structure, since you see value in the content they publish. You mention their seeming inability to effectively translate content creation to digital platforms in a way that engages readers. Is that the primary problem? Or is it the form factor, ie that consumers of editorial content no longer want to flip through pages but would rather scroll down a page, even on iPads? Or is it that editorial content presented around themes is no longer viable in a world driven by bite-sized content consumption?

    I hope you’ll elaborate further. Thank you.

  9. The single biggest challenge is legacy mindset and cost structures.

    Cost structures are hard to deal with but in many ways magazines in the US have cost structures that are much higher per dollar of ad revenue or subscriber than anywhere else in the world since costs rose to the point margins remained in the 15 to 20 percent range. In England for instance magazines with same quality have cost structures that are a quarter of the US. The digital world requires lower cost structures or costs in new areas versus old.

    The mindset issue is that magazines have thought of digital as another distribution medium (how to port magazines to digital) rather than a way to think in completely new ways about how to leverage content to both engage and monetize.

    The reason for this challenge is that most magazine revenue comes from traditional print and so management and decisions are driven by where the dollars are, rather than where the dollars will be.

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