Everything’s Gonna Be All Right (Just Different)

Permanent Musical Accompaniment to this Post: 

I had the distinct pleasure of attending the Magazine Innovation Center’s ACT 7 conference at the University of Mississippi in Oxford, MS last week. The Magazine Innovation Center was founded in 2009 by Dr. Samir Husni of the University of Mississippi’s Meek School of Journalism in response to the crisis the magazine publishing industry found itself in after the start of the Great Recession of 2008. To me, the ACT conferences (ACT means Amplify, Clarify, Testify) serve two purposes: The first is to give a small group of magazine professionals a chance to meet together and exchange information about the business in a setting that is outside the usual “industry conference” setting. The second and in some ways more important one is to allow undergraduate and graduate students of journalism and magazine publishing a chance to learn from and interact with industry professionals.

This was not my first time to an ACT conference. In fact, it was my fourth. I attended the first in 2010, the second a few years later. Last year I was incredibly privileged to give a presentation on launching a magazine onto the newsstand. This year I served on a panel that discussed what publishers needed to know in order to have a successful launch.

Overby
The Overby Center, home to the ACT Conference.

I return to the ACT conferences because I thoroughly enjoy the intimacy of the conference community and it pairs well with the depth of experience of the presenters and panelists. There is a very collegial and community feel to the meeting. If you’ve ever been to a International Regional Magazine Association meeting you may know what I’m talking about.

The other reason is the students. These are some pretty incredible people. Their mere presence defies all of the stereotypes you read about Millennials and Gen Ys. I’ll discuss that more in a bit.

If you want to know what some of the panels were like, check out Dr. Husni’s blog to see what I am talking about.

This week, the newsstand business is buzzing with the news that TNG, the largest magazine wholesaler in North America is purchasing Ingram Periodicals, LLC (IPI) from the Ingram Content Group. IPI is the exclusive magazine distributor to Barnes and Noble, Jo Anne’s Fabrics, and several hundred independent bookstores. B&N may account for as much as 75 -80% of IPI’s business according to several industry professionals.

As soon as this news was released, my email and my phone blew up with comments and questions about what all of this will mean. What is the future for the newsstand side of the magazine business?

So?

Obviously TNG will get bigger. Most likely, the IPI warehouses will close. Some IPI employees may get to stay on in the TNG organization. Others will not find jobs and will leave the industry. Will TNG look to acquire Media Solutions next? Hudson News? What will this mean for One Source, the distributor to Whole Foods who uses IPI warehouses? How will they wield all of this accumulated power?

Much of the commentary I heard was negative. Depending on your point of view, working in the newsstand business is pretty much nothing but a long hard slog from one bit of “bad news” to another bit of “bad news.”

But let’s be realistic. What’s been going on in the newsstand distribution business since the massive consolidations of 1995 – 1997 is nothing other than change. We often don’t like change but so what? It may be personal to us but to the people who implement change, it is not personal.

Change in our business came as regional retail chains gave way to large powerhouse national chains. Simultaneously, TV Guide gave way to cable television. The seven sisters of the check-outs gave way to other forms of entertainment for women. Adult entertainment magazines, the third leg of the profit triad for magazine wholesalers, retailers and national distributors lost circulation to VHS tapes, then to DVDs, and finally the internet. Those three sources of newsstand circulation were what made magazine racks in retail stores the “must haves” for retailers. Unlike our European cousins, our industry focused on check out exposure and not the mainline.

We have two large national magazine wholesalers because the large national chains that carry magazines want it that way. We lose circulation because there are many other things (like Netflix and YouTube) that compete for people’s leisure time and pocket change. Retail shopping patterns are changing. Perhaps you’ve heard of Amazon?

Throughout the past decade, we’ve heard call and response after call and response for the newsstand business to “work together”. To “solve” the problems of the newsstand. I would suggest to you that the newsstand may be the way larger publishers and retailers want it to be. Mostly out of sight, mostly out of mind. Frankly the folks in the executive suites have other things on their mind: Events, mobile web, video, subscriptions, and newsletters.  Newsstand is and always has been a small piece of the circulation pie. Just a very visible one that people like to write about.

I’ve always liked this business because I like magazines and I like characters. And there are still a lot of characters and magazines in this business. When I started this blog, I talked about surfing the waves of change. You can surf. Or you drown. It is up to us who work in this business to affect as much change as we can on behalf of our publishers. You want change? Make it so.

Why do I think “Everything’s Gonna Be All Right”?

At the close of the ACT 7 conference, Samir called a number of students up onto the stage at the Overby Center. These students were seniors in Samir’s class and their final project was to create, edit and print a magazine. I was fortunate enough to get to see some of these magazines and they were pretty impressive. as with other ACT conferences, I got to see and sometimes interact with Samir’s students.

MICACT7 Finale1
Dr. Samir Husni awards prizes to Ole Miss seniors for creating magazines as part of their final projects.

After seeing these students, let me tell you, when it comes to the magazine business, everything’s gonna be all right.

Just different. Very different.

 

The ACT 6 Conference Addresses the Newsstand

In 2009 I was excited to hear that Dr. Samir Husni (aka Mr. Magazine) had launched the Magazine Innovation Center at the Meek School of Journalism at the University of Mississippi in Oxford. I thought it was past time that the conventional wisdom was challenged. Yes, the world of information is changing. Yes, digital is the future. But did that mean that digital was the only future? While we  embrace digital, revise how we look at media and magazines and journalism do we have to dance so happily on the grave of printed magazines?

One of the missions of the MIC is to host conferences that discuss the business of publishing in an open and free ranging forum. The conferences are called ACT (ACT is the acronym for “Amplify, Clarify and Testify.”) At the first ACT conference I was thrilled to see speakers beyond the usual batch of insiders who spoke at most magazine conventions. Better yet, we got to hear from a wide range of Samir’s publishing acquaintances from overseas and learned how they were addressing the changes in the magazine world. And even better than that, the auditorium in Overby Hall was filled with journalism students, undergraduates and graduates who were there to learn about magazine publishing and what the future may hold for them.

This year, the ACT conference was in the Spring (April 20 – 22) instead of the Fall.  After five conferences that focused on a wide variety of topics, this years’ ACT featured several panels on the struggles of the newsstand side of the business.

Day One of the ACT conference kicked off with an industry overview from Tony Silber of Folio Magazine. It was followed by a very lively and informative address from Sid Evans of Southern Living Magazine.

Day Two took on a whole different form.

The conference kicked off with an historical overview of the makeup of the newsstand distribution industry from John Harrington, a consultant and editor of the New Single Copy newsletter and former head of the industry trade group, The Council for Periodical Distributors of America (CPDA). John is a long time industry veteran and he was able to lay out for many conference participants how the newsstand was organized, how it had worked for many years. Finally he explained why the industry experienced such rapid consolidation and had arrived at such a precarious position in the second decade of the 21st century.

But for any newsstand veteran, the surprise was the next panel, “Reimagining The Newsstand”. This was a remarkably open and frank discussion between several publishers, a major magazine wholesaler, and the major supplier of books and magazines to Barnes & Noble. The panel was moderated by Gil Brechtel, a former magazine wholesaler and current CEO of MagNet, a data service that provides publishers with store level information on their newsstand sales. The members of the panel were: Shawn Everson of Ingram Content, David Parry of TNG, Hubert Boehle of Bauer Media, Andy Clurman of AIM Publishing and Eric Hoffman of Hoffman Media.

While it was not that remarkable to have wholesalers and publishers on a panel discussion, this panel was more lively and open (Perhaps because we were nowhere near either coast?). Before the panel opened, each participant was given the opportunity to give a short presentation on their side of the business. This was incredibly informative. I could understand, fully for a change, the incredible pressures that TNG operates under (High fixed costs, pressures from retail customers, competitors for space within those retail customers, pressure from magazine suppliers). I could see why a publisher from another country (Hubert Boehle of Bauer) would view the American newsstand with a skeptical and quizzical eye (Germany has similar sales volume as the US, yet a higher sell through and lower remittance to the retailer). It was fascinating to hear about the transformation of Ingram from a strictly magazine and bookstore reship operation into a multi-channel company that also profited from digital production and distribution was impressive and remarkable.

Did the panel fix the newsstand?

Of course not. The challenges that face the newsstand distribution business can’t be fixed in one morning. But to my mind, this was the first of what should be many open, frank, and engaging discussions. We should continue this conversation. You can watch the presentation below:

 

This panel was followed up with another MagNet sponsored panel titled “Cover Data Analysis for Editors”. This was led by Joshua Gary of MagNet and included Brooke Belle of Hoffman Media, Josh Ellis of Success Magazine, Liz Vaccariello of Readers Digest and Sid Evans of Southern Living. From my perspective, this was another successful panel. It was refreshing to hear from editors who understand that newsstand copies are the public front door to their magazine. That something designed to appeal to a potential reader could make that part time fan of the magazine a full time paying subscriber.

 

Consider the potential streams of revenue open to magazine publishers today: Events, e-commerce, newsletters, blogs, video, subscriptions. Ask yourself, why wouldn’t you put your best foot forward with every single issue that hits the newsstand? Why wouldn’t every newsstand cover be a piece of art instead of the very last thing you think of?

I don’t know. Any art directors or editors want to chime in?

Screen Shot 2016-05-04 at 10.33.04 AM
The MagNet cover panel discusses the impact of discounted sub on newsstand sales.

In a March editorial, Tony Silber, the VP of Folio Magazine stated that the fate of the newsstand is not the same fate of print magazines. Tony correctly points out how the channel no longer generates much, if any profit. That racks are “truncated”. That many editorial pursuits have moved online. His address at the opening of the ACT conference was inspiring. But on this point I’d have to disagree. What has happened to the newsstand could very well be the fate of the printed word if publishers do not pay attention to all aspects their business. If all they do is react.

The fate of the newsstand is the fate of any business if the participants pay no attention the rumblings of their customers or suppliers. If you don’t watch and respond to trends, the fate of the newsstand is waiting for you.

If we want readers to buy newsstand copies, we have to give them a reason to do so. If we want the newsstand channel to be profitable, then the participants in the channel have to cooperate and on the same page about who, how, when and how much they will get paid.

Recently a supplier contacted one of my customers and rather (Rudely I thought) informed them that they were not profitable, that they would have to switch to another form of discount and that they would have to agree to this right now this very minute or else they would be dropped. A quick review of this distributors sales showed that their sales losses were significantly higher than anything else this title had ever experienced. Moreover the discount structure that the title was currently declared “unprofitable” had been imposed by the distributor in an earlier “either/or” declaration. In other words, the losses this distributor incurred were self inflicted. Why? Because they took their eye off the ball and didn’t think long term.

When will sales stop declining? When we give readers a compelling reason to buy. When the producers of the content, the publishers decide that it is a channel of sales that they should pay attention to. In fact, during the ACT conference, we heard from several publishers who are doing well on the newsstand precisely because they are paying attention to their business.

It’s my hope that the discussions that were started at this years ACT conference continue. The alternative is a continued drift. At a certain point, we need to stop the drift and chart a new course. That point really is now.

Things That Don’t Exist, But Would Be Cool If They Did: The Conference Room Edition

It’s that time of year again. Yes, there are parties. But there are also the last rounds of budget meetings, media plans for the soon to start New Year, meetings to tighten up editorial calendars. And, of course, the conference calls to plan the next round of …conference calls?

Out in the world of circulation, that high intensity drumbeat you hear is actually the collective hearts of circulation and audience development teams beating at +180/minute as they wonder if there’s enough last-minute circ to meet the oddly high rate base guarantees the ad team made to their customers a year ago. Will we make it? Will AAM or BPA accept it?

Last week a colleague from the newsstand world called to wonder out loud why her December prematures were so high and POS numbers so low. Were the Christmas displays actually put up in the King Soopers in Denver? And why did the Ad Manager laugh so much when she mentioned the Buehler Supermarket chain in Ohio? “It’s not even spelled the same way and Ferris was from Chicago,” she pointed out.

October’s post “Things That Don’t Exist, But Would Be Cool If They Did (Especially If We Could Bring Them To Our Next Meeting) was inspired by a few stories I had recently heard about some wonderfully failed presentations.

With that in mind, I polled some colleagues in the magazine circulation side of the business to see if they had any creative things they’d want to bring with them to their next conference room meeting to discuss end of the year circulation numbers. Here’s what they suggested would make their time in the swivel seat more enjoyable:

Things That Dont Exist Part 2

When senior management invites you into the 21st floor conference room to discuss end of the year numbers, what do you want to bring with you?

 

 

How Bad Is It, Really? The Promise and Possibilities for Regional Magazines.

It is pretty apparent that the nation is still deep in the grips of a recession. Visits by consumers to retail stores are down and that means that the opportunity to make a sale is down. Now that the magazine circulation industry has had a chance to fully digest the news from the latest round of ABC reports and MagNet, we have to ask ourselves two questions:

“So, how bad is it, really?”

and

“What are we going to do about it”

The fast, glib answer is that it is pretty darn terrible. Continuing in that train of thought you can reach the conclusion  that the only thing to do is to cover yourself in sack cloth and ashes and go about the streets with torn clothing while wailing and gnashing your teeth.

But in today’s world, you’d likely be mistaken as the former owner of a McMansion who found himself homeless. Then you’d get arrested for vagrancy.

I caught a glimpse of a better answer to those two questions over the weekend while attending the annual IRMA (International Regional Magazine Association) conference in Reno, NV.

IRMA, is an association of state and city magazines that has banded together over the past fifty years to share information and their experience. They work collectively to promote their publications. Smaller and more loosely organized than the larger and better known CRMA (City and Regional Magazine Association), I found the round table discussions and presentations surprisingly frank, open, informative and, unusual for the market that we have lived in for the past three years, exhilarating.

These publishers were not necessarily upbeat about the economy or the short term outlook. But they were deeply committed to their brands, optimistic about their entrepreneurial abilities, and the ability of their staffs.  They were not willing to dump or bury their print magazines and eager to further explore the digital side of publishing.

Supposedly, we publishers are all dinosaurs lamenting the loss of our paper empire and cursing the cool kids on the other side of the office who tweet away all day on their fancy tablets. For these publishers nothing could be further from the truth. They are committed to their print brands and dedicated to using digital to enhance and expand their reach. All of them were engaging their audiences to some degree with social media. Interestingly, however, I gathered from some of the discussions that the web and mobile applications may hold more immediate potential for brand extension and profit than tablet editions.

My former Athlon Sports publishing colleague and fellow independent newsstand consultant Joe Luca, invited me to join him in a roundtable discussion, “The Modern Newsstand Environment” We opened with the question, “How Bad is It, Really?”

The answer is, “Not so great.”

This is true: If you’re a celebrity magazine, a major national check out title, or a middle of the pack mainline title. Or an adult entertainment magazine.

But if you are a regional magazine, we see a wealth of opportunity. Our goal in the presentation was to point them in that direction. While these publishers do not have the clout or wherewithal to change the existing paradigm of newsstand distribution, they do have a chance to live within today’s margins and have a successful run.

I recall reading many commentaries in the ‘80’s and ‘90’s lamenting the “Malling of America”. The theory is that the growth of national chains and franchises was removing what was unique and interesting about the various regional cultures of contemporary America.

But American’s love their hometowns and the uniqueness that surrounds all neighborhoods, towns, and cities continues to exist in spite of the ubiquity of McDonald’s, 7-11, Victoria Secrets stores and shuttered Borders bookstores. All politics are local, former House Speaker Tip O’Neil famously said. All regional magazines have a deep and abiding love and wealth of knowledge about the markets that they serve. The only other local organizations that may have a deeper knowledge of their local market is, ironically, the city newspaper. Today, however, the hometown newspapers is likely owned by a far away conglomerate saddled with unseemly LBO debt. So who really knows the neighborhood better? Our bet is the locally owned and operated publication.

During the presentation, Joe Luca demonstrated time and again that attention to detail at the local level would reveal opportunity after opportunity for the savvy regional publisher. Open check out pockets, previously ignored chain authorizations. We discussed the need to focus on special issues, the placement of temporary displays during peak seasonal issues and the need to engage, engage, engage the retailer, the wholesaler and the national distributor about the benefit of local magazines. These are the steps that will help a regional publisher grow single copy sales. Even in a down economy.

The problem our newsstand industry has is that consolidation of warehouses and national distributor operations resulted in the need by these companies to economize and cut costs. Local warehouses were shuttered. Sales representatives were laid off. Deep knowledge of individual markets was lost. None of this is unique to our business, or even surprising when compared to other businesses. But newsstand sales isn’t called the “Single Copy” business for nothing. You build sales volume copy by copy. Nickel by nickel. The loss of these warehouses was inevitable, and you can’t help but wonder if the resulting efficiencies of scale paid for the loss of unit sales and retail sales volume.

While regional publishers have the local knowledge that could help the wholesalers and national distributors, newsstand sales is usually the smallest part of their business and the last item on their check list. They don’t speak our language. They can get frustrated when we try to explain to them how we work. And I don’t blame them for that. It’s understandable.

So what was our conclusion?

Be fearless. Question everything you read and ask questions. Ask a lot of questions. Don’t be afraid to tackle your single copy sales. We’re here to help. Realize that you do have potential to sell more copies, more efficiently, and with more profitability.

Below is a copy of the presentation we made to the conference. Do you read your local city or state magazine? Do you think they have a good handle on the place where you live?

IRMA Newsstand 2011

Today’s “Buck Up” Talk. Firefly vs. Snoopy

We’re in the middle of proposing a new “spin off” launch this week and of course, the big concern on the marketing, circulation and numbers side is: “What will happen to Borders in the near future?”

For a project of this size, putting magazines into Borders is pretty key. So if the chain’s not there when it’s time to pull the final print order together, that’s a problem. If we drop the mags into Borders and two weeks into the sales period, they shut their doors….

If you think about it, it’s kind of like dropping an e-blast and having more addresses bounce back than you anticipated. Or realizing five minutes after you open the box that your android powered tablet doesn’t work as advertised. Or in the middle of a meeting realizing that the connectivity problems you’re having means you really wish your iPad could hook into your flash drive. Or…

For some inexplicable reason, scenes from the series Firefly kept bopping into my head as I worked on the numbers. In “Firefly”, the crew of the ship named Firefly keeps moving further out in the void to find a better life because conditions for the former rebels continues to worsen. But somehow, those images  got all mixed up with Snoopy fighting his endless battles over the French landscape as he keeps getting shot down and keeps getting back into a plane to take to the sky.

So the email that summed it up best for me was this:

There’s a proposal on the table. It’s a print proposal but right there on page 8 are marketing ideas that tie in nicely to the … digital vision and work well to merge print and digital. On pages 4 and 7 are merchandising ideas that would bring additional … revenue.

If we get shot down, we get shot down. We pull the ripcord on the parachute, try not to break our legs when we land, head back to base and take another plane up.  Keep flying.

So if Snoopy got together with....
...Mal and the gang...how would it all turn out?

Keep flying. You’ll find out.

Old Times, New Times, and Digital Times

Several years ago, I stopped attending the annual MPA Retail Convention. For the amusement of my friends in the industry, my rap about it went something like this:

“If I go this year, I’ll kill my career. Every time I go to the key note, I’m afraid I’ll leap up on my chair and start screaming, ‘You lie! You hypocrite!’”

It sounded funnier live. And of course I’d never do something like that. And that poor “guy” isn’t personally responsible for the troubles in our industry.

But I stopped going anyway. The real reason was that the workshops didn’t address topics that interested me and there was always the PBAA (Periodical and Book Association of America). The PBAA  Retail Conference  schedules “one on one” round table meetings around  the usual key note addresses and workshops. In the space of one or two days, I  can accomplish what would normally take me about three weeks of heavy travel and endless hours of conference calls.

While I was employed by corporate America, I stopped attending the PBAA for a few years because the parent company I sold my business to said I couldn’t go. This year, as a self employed person, I gave myself permission to go.

I’m glad I did. It’s important for people who work in an industry to get together and discuss what they are experiencing. For me, it was worthwhile because I got to see people I hadn’t seen face to face for some time. And some of the workshops were worthwhile, even if they didn’t address the topic in quite the way I wanted it to be addressed. Oddly, I find the older I get, the more flexible about these things I can be.

Underneath the pleasure of being together, there is disquiet in the magazine distribution business. Beyond the concerns about print being replaced by digital, there are concerns about retailers continuing to cut back on available space. Will Wal-Mart go direct to publishers? Will publishers willingly go direct if that’s what Wal-Mart does? How stable are the larger publishing houses? The wholesalers? The national distributors?

Personally, I long ago accepted the fact that digital readers, digital magazines and books and some new way of marketing and selling all of this to the public is here. It’s here to stay and it’s share of the pie will grow.

Technology has a nasty habit of getting way ahead of society and it’s been society’s lot to try to catch up, adapt, and not have the technology disrupt society in too negative  a way.

But for me, the real  unanswered question is,  will digital bring us new readers? Or will they replace one way of reading your magazine with another?

There’s endless chatter about the decline of readership in this country. Some explain it away as the coarsening of our culture. I think that non-sense. We’ve never been as genteel a nation as we’d like to think. Just spend five minutes with a history book that wasn’t touched by the Texas Board  of Education and you’ll see what I mean.

The Texas Board of Education

The real issue is the two-fold:

One is the simple crunch for time most people have. They work longer hours, have fewer dollars, and there are a lot of shinny new things out there for people to play with.

The other issue is pricing. We charge too little for magazine subs – so we deflate our implied value to the reader. Then we seem to charge too much for a newsstand copy, and too much for books, and way too much for audio books.

The challenge for publishers in this new market will be to give their current readers a reason to continue to want to pay to read their magazines in whatever form they choose.

Their next challenge will be to attract new readers. Tablets, digital readers, digitized versions of their current print offerings may do that.  But they had better make sure that they don’t simply cannibalize their current readership and make the same mistake and give away their digital versions.