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Greg Satell Digital Tonto: The future of publishing Today at 10:41 | Greg SatellJust a few years ago, some people were ready to write publishing off.
Social media, crowdsourcing, content farms, wherever you looked there was somebody aiming to put traditional publishers out of business.
People were understandably scared. Red ink spewed everywhere. Layoffs at major media companies were rampant. Yet today, publishing is becoming a hotbed of innovation.
Major publishers like Conde Nast, Hearst and Time Inc. are transforming themselves while upstarts like BuzzMedia, Say Media and Glam Media are building new models altogether. There are significant challenges ahead and, inevitably, some will falter. Nevertheless, the future of publishing is brighter than ever.
The bust that wasn’t The crash of 2008 and 2009 hit the media world hard. Publishers reported heavy losses. Lots of hard working, competent people were put out on the street. Meanwhile, social media was hitting its stride and many thought the publishing model was broken.
Many, but not all and certainly not me. I pointed out at the time that the signs pointed to magazines making a comeback and that the enormous losses at media companies were mostly due to bad investments and not to poor operational results. The downturn, in other words, was cyclical and not structural.
That didn’t go for everybody, of course. I also pointed out that Newsweek made grave mistakes. Interestingly, however, their error lied in overreacting to the “digital threat” and trying to transform a mass product into a niche one (I still don’t now how they thought the numbers could work on that one).
That’s not to say that nothing has changed. A lot has and publishers have some hard adjustments they need to make. Nevertheless, the overall effect is positive and will make publishing more vibrant, exciting and profitable in the years to come.
What will happen to print? But wait. Isn’t print in decline? Aren’t circulation numbers falling? Isn’t all the money moving online?
Those things are somewhat true, but the situation isn’t nearly as dire as some would have us believe. Firstly, the overall decline in circulations is rather small, about 1% in the US. Second, publishers make money on ad sales, not distribution, which they subsidize to maximize readership (the cover price is often less and sometimes much less, than it costs to print and distribute.)
On the ad sales side, the story gets a bit more complicated, because we have to make a distinction between newspapers and magazines. Newspapers have indeed been hit hard. In North America, ad revenues have declined 45% since 2007 and are projected to go down further from there.
However, newspapers are a special case. Historically, they made their money from classifieds. All of those people buying small boxes of text advertising jobs, cars and personals added up and made for a very good business. In a very real sense, the hard hitting journalism basically served to promote small transactions.
That money is gone and will never come back. The Internet is a much more efficient medium for classified advertising and newspaper companies have, for the most part, missed out. As I’ve noted before, the drop in newspaper ad revenues roughly equals the rise in digital ad sales since 1997.
For magazines, on the other hand, the story is much different.
Magazines have always been used by marketers to build brands among discrete audiences. Digital media still struggle to consistently build awareness among consumers and therefore the drop for magazines has been far less severe. Moreover, ad revenues should remain fairly stable in the coming years, dropping only slightly if at all.
For the foreseeable future then, we can expect the bulk of magazine publisher’s revenues to come from print.
How tablets will change the game What’s amazing is not how much things have changed, but to what extent they have stayed the same. For all the talk about everything going digital, roughly 80% of total ad spending goes it where it always has: traditional media.
That is, until now. Tablets are quickly changing the face of media.
Strong Christmas sales doubled tablet penetration to about 20% and, with just about every computer manufacturer coming out with devices to compete with the iPad and Windows 8 entering the fray, that figure will rise quickly, especially in younger demographics.
Further, advances in OLED technology will make tablets, thinner, lighter and cheaper, putting screens everywhere. To get a sense of what the future will look like, take a look at this video from Corning.
The rise of tablets represents both an enormous opportunity and an enormous challenge for publishers. The opportunity is that tablets will allow them to integrate text, video and interactive graphics seamlessly and not only create more engaging products, but also gain access to big TV budgets.
Multiplying revenue streams As I mentioned above, publishers have historically earned their money from advertising and going forward, they will remain heavily reliant on it. Clearly, marketers will pay more for consumers than consumers will pay for content, which is why the world’s most successful publications are ad supported.
Still, there will be plenty of opportunities for publishers to increase their share of the pie. They have immensely talented people, strong brands and devoted readers. Digital technology will allow them (impel them, actually) to deploy content over multiple devices and touchpoints.
Video, of course, is the most obvious and we can expect publishers to start deploying networks of YouTube channels which will be increasingly viewed not only on smartphones, tablets and PC’s, but on interactive TV’s as well. We can expect to see a renaissance in short form video content similar to what Bleacher Report is doing in sports.
E-commerce affiliate programs like Amazon’s represent another golden opportunity. Links from product reviews are easily monetized. Recent reports indicate that Pinterest is already making money that way. Moreover, companies like Flite and Stipple are developing new ways of embedding links inside images, further integrating e-commerce and editorial.
Those are just a few new revenue streams. Others are surely to appear. Anyway you slice it, there are more ways to make money from publishing than ever.
The integration imperative The challenge, is that to take advantage of the new environment, publishers will have to acquire skills they don’t presently have and there’s bound to be quite a bit of organizational inertia. Integrating video, for instance, is not something that immediately occurs to print editors. It’s just not something they’ve had to do before.
Further, publishers are used to operating on the principle of a chinese wall. Editorial operations and business interests have been kept separate and disticnt. However, rules need to be updated. If editors are choosing what to promote through links, for instance, than the issues change dramatically.
Probably the most difficult area is not reconciling business and creative interests, but integrating skills. Editorial teams used to have nearly total control over the product, but now have to share the road with technology, UX and video teams, which will create obvious tensions. To be successful, publishers will have to bridge those divides.
The future of publishing, then, lies in capitalizing on multiple revenue str
eams andintegrating diverse skills effectively.
Greg Satell is a U.S.-based independent media analyst. You can read his blog entries at http://www.digitaltonto.com.
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Digital Tonto: The future of publishing
RAMSEY, Isle of Man, February 16, 2012 /PRNewswire/ --
IBS Group has completed an acquisition of 14.09% shares in the IT services segment, consolidating its full control. IBS is a leading provider of IT Services in Russia, with 7% market share and a strategic focus on business application implementation, where it holds 18% of the market. Its core line of business is complex project implementation in IT services and IT consulting for major Russian and international corporations and the public sector, including 39 of TOP-50 Russian companies. The company builds and secures long-term customer relations based on its outstanding engineering background, innovation and deep industry expertise.
Commenting on the transaction, the Group's President Anatoly Karachinsky said: "Streamlined corporate structure and buy-out of a minority shareholder helps maximise the IT Services segment's return for shareholders, simplify planning and budgeting and further prioritise our business development strategies."
Dmitry Ivanov
Investor Relations Director
IBS Group
tel: +7-495-967-8000
fax: +7-495-967-8099
cel: +7-916-618-4034
dvivanov@ibs.ru
http://www.ibsgr.com
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IBS Group Consolidates Full Control Over its IT Services Segment
by Films in Peel
Next film to be screened by Films in Peel at the Centenary Centre, on Wednesday 22nd February, is a film made on the Isle of Man - Albatross (cert 15A). This movie stars young British actress, Jessica Brown Findlay (recently of Downton Abbey fame). She plays Emelia, a rebellious, seductive teenager who finds a job at a guest house and befriends the daughter of the house. Emelia turns heads and quickly finds herself having an affair a little too close to home. Co-starring Felicity Jones, Sebastian Koch and Julia Ormond, this movie was almost entirely filmed on location on the Isle of Man. The scenery is breathtaking and shows our beautiful coastline at its best. Great film for location spotting!
Hilary Dugdale of Isle of Man Film will do a short introduction and tell the audience a little bit about the making of the film.
Tickets on sale at Celtic Gold in Peel at £4 (£3 conc.). Tickets are also on sale for films coming up: Young Hearts Run Free (cert 12) (Thurs 8th March), Tinker Tailor Soldier Spy (cert 15) (Wed 14th March) and Jane Eyre (cert PG13) (Wed 28th March). Tickets are also available on the door. Reservation tickets with a seat guarantee from Shakti Man (Ramsey), Mostly Manx (Douglas) and Thompson Travel (Port Erin). Film starts at 7:45pm. Refreshments and bar available from 7pm.
Films in Peel have also announced their April - June programme. The list includes multi-award winning film from Iran, A Separation (cert PG13), Irish comedy The Guard (cert 15) and acclaimed British movie My Week with Marilyn (cert 15).
For further information visit http://www.centenarycentre.com, http://www.facebook.com/filmsinpeel or join the Films in Peel mailing list: filmsinpeel@manx.net.
-ENDS-
In Other Isle of Man News
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Films In Peel