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.

A Year Without Porn (No, Not Like That) Part 2

So why is it significant that a year has gone by without my retaining an “adult sophisticate” (porn) publisher as a client?

There’s a stream of conscious commentary that the porn industry is always on the leading wave. They’re the first to adapt to a shift in technology, or they push the bounds retail or social trends. The big one, of course is that porn merchants are early adapters of technology (examples here: http://bit.ly/Gq92u and here: http://bit.ly/avcUtK). Perhaps it’s true. Or perhaps it has more to do with the mainstream side of the world being enthralled and amused with an industry and it’s inhabitants who live outside of the rules.

In my last post (http://bit.ly/aSoAKI), I mentioned the impact that the Meese Commission report had on the adult business in terms of the single copy sales of “sophisticate” magazines. Both Playboy and Penthouse Magazine, for example, used to have their own field forces to supplement the circulation activities of their national distributors. They consistently sold a million or more copies on the newsstand.

A decade after the Meese Commission report, Penthouse was selling slightly over 750,000 copies on the newsstand. Playboy about 775,000 copies.

Fast forward a decade to 2004 and we see Playboy down to 450,000 copies and Penthouse at 226,000 copies.

According to Audit Bureau of Circulation (ABC) reports, Playboy now sells under 225,000 copies on the newsstand. Penthouse under 100,000 copies. Talk about losing your market clout.

The consensus among most of the people I talk to about this trend is that several events followed Ed Meese’ little gift to the religious right that created a “perfect storm” for the adult magazine business:

1. The loss of retail outlets. Convenience stores were reluctant to carry the magazines. The shift of convenience store images to more “family” and “food” friendly places to shop meant they weren’t getting back in. And forget about mainstream accounts like drugstores and supermarkets.

2. The advance of DVD’s and DVD viewing technology in the ’90’s meant that interactive adult entertainment could more easily take the place of magazines.

3. The advent of reasonably fast and  inexpensive high speed internet connections meant that online porn videos took the place of DVD’s in the middle of the last decade.

So wither the printed porn magazine? Are they a leading wave for what will happen to mainstream general interest and special interest printed magazines?

If I were a TV reporter, I suppose my sign off right about now would be: “So is this the end of the line for the printed porn magazine? Only time will tell. For News 4 You, I’m Joe Berger.”

And it may very well be the case that time will tell.  I almost always had an adult oriented publishing client because there was always some changes I could affect to their distributions. If not in the mainstream wholesaler market that is now dominated by Source, News Group and Hudson News, I could work some positive change in the secondary and specialty market where we still find regional magazine wholesalers.

But in this case, both technology and social trends may trump tradition. If you want an adult magazine nowadays, they are a little hard to find. You either have to go into an adult bookstore (where their presence is also diminishing), or an old style newsstand, or some of the convenience stores (mostly independent) that carry these titles.

Or you can download the latest from the web in the privacy of your own home  And if you don’t want to see the whole thing, you most likely can get a lot of it for free.

Of course, that could be the topic for another post.

A Year Without Porn (No, Not Like That!) Part 1

First the personal:

Here’s a reveal: I grew up in the magazine distribution business. My Dad was the general manager of a small magazine, book and newspaper distribution company. I could tell you that I was intimately involved in the comings and goings of the company but that would not be true and if I were in Connecticut (which is not far from my ancestral home), I’d be in trouble . But as I’m in Illinois, I could have told that whopper and I would have gotten away with it.

But my Dad was more engaged than most fathers from that time, and he enjoyed regaling us with stories of his work-a-day life and we loved hearing them.  And, during spring breaks when his company did inventory, I did have the opportunity to work in the warehouse and that’s when I first had my introduction to the world of printed porn magazines.

The company had brought me and the owners son in to help with inventory . Most of the work in the first few days involved going up into a very dirty and cobweb filled loft and tossing down old inventory that the tie line employees for some reason had tossed up there. When that task was finished, we moved on to a large stack of periodicals that were waiting for their covers to be stripped. Back in the day, many magazine wholesalers still did not have “affidavit” privileges,  and UPC scanners were just coming into their own.

At some point during the day, the stack revealed some “adult themed” magazines. We were teenage boys , so, of course, this was the most intriguing reading material we had ever seen. We stopped what we were doing, flipped open the magazines, and wondered who on earth would want to destroy such beautiful print creations by ripping the covers off of them?

My Dad’s office overlooked the warehouse floor – the better for him to oversee what he was supposed to manage. He came down onto the shop floor a lot too and I do remember seeing him out on the floor checking in on the daily activities. As an aside, he always wore a suit and tie to work, but because he was out on the floor so much, my Dad’s suits and ties often took a beating.

My Dad’s office also had an old fashioned microphone. So the manager could flick a button and announce a break, or call someone into his office, or stop the tie line. In this case, after we had been reading for what for us, was not nearly enough time, we heard the intercom buzz, click, and then my dad’s voice sternly announcing:

“Joseph and Everett, stop reading and start stripping.”

He meant magazines, of course.

In our world, porn magazines are called either “adult magazines” which makes sense, or “sophisticates” which doesn’t make a lot of sense if you know anything about porn. In this case, the name does make sense if you realize they mean “sophisticated taste.”

Once upon a time, back when TV Guide was the best selling magazine, adult titles were huge profit centers for retailers, magazine wholesalers, national magazine distributors, and, obviously, the publishers themselves.

Do you know that you could once upon a time buy Penthouse Magazine in  national drugstore, supermarket and convenience chains?

Well, don’t blame the internet for their absence. The decline started during the Reagan Administration and former Attorney General Edwin Meese. Back in the early 1980’s Ed Meese published the infamous “Meese Commission” report which said that porn was going to be the end of civilization (http://en.wikipedia.org/wiki/Meese_Report). I thought then, and still do now, that this was the Reagan’s sop to the Religious Right. Back before DVD’s, the Internet, and even the ubiquity of VHS cassettes, porn was not the huge industry it is now. Major corporations, like Marriott, for example, didn’t know how much money they could make off of “sophisticate” themed entertainment.

Attorney General Ed Meese (Source: Tru-TV.com)

So away went all of the chain authorizations that the major adult magazines had and the long slide towards marginalization began for adult magazines.

So what you talkin’ about Willis? Why the discussion of porn?

Two things really:

The first is simple. This month marks the first year in about twelve or more where I have not had an adult oriented publisher as a client. There were times in the past where a few months would go by, but in this case, an entire year has gone by.

And that’s significant because:

Well, I told you this part was personal. Part 2 will be all business(y) and all.

Lost Sales Opportunities – The Siloing of Marketing

Several years ago I sat in on a presentation made by the CEO of  a publishing company. After he spoke for a few minutes,  it became clear that he had recently spent time on a long plane ride and was exposed to a Forbes specialty magazine. The buzz word at the time in the business world was “silo” and the goal was to get everyone out of their “business silos” so they could all “work together.”

It was a great talk and I actually felt hopeful for that company’s future for about five minutes. However it was apparent that to this CEO, breaking down silos meant taking resources out of the consumer silo side of his business and “investing” it in the business to business silo.  We could have saved a lot of time and skipped the whole speech.

The phrase “silo” brings to mind several images: The first is the symbol of plenty we see out here in flyover country. A grain silo. A vision of flat fields of corn and wheat and bountiful plenty. If you had a “business silo” and imagined a grain silo, you could think of a business resource that you draw on in times of good or ill, and it would nurture your business.

The second image is a missile silo. Here we’re talking about concrete bunkers and uniformed, brush cut military personnel waiting for the signal from another bunker to fire death and destruction on the “enemy”. Even in a business setting you can “harden” your silo and keep others from taking your resources.

In magazine media marketing, we unfortunately do a lot of the latter. Single copy newsstand marketing is kept far, far away from subscription marketing. Advertising marketing exists on an entirely different plane. Cross promote video and print? Why on earth would we attempt that? Promotional marketing of your own product? Huh?

And the new kid, that scruffy internet punk with all those social marketing thingies. Well, she’s so out there who the heck knows what she’s up to. And she’s kept on another floor. And why the hell is the home office is giving her so much time and resources?

Of course, this is stupid. We all know that.  But this is how it’s done.

Consider this publishers:

If your customer buys a single print copy every month at $4.99 per issue, it will cost her $59.88 per year. I have a client who has a $4.99 monthly magazine and they charge $2.00 per issue to subscribe. That’s $24.00 per year. It costs $1.35 per copy to print the magazine. You do the math.

If you buy the Zinio version of the magazine so you can read it on your computer or iPad, or smart phone, it will cost you $3.99. Why $3.99? Of course, an iPad could cost you anywhere from $500 to $800.  If you buy the $800 version there’s the monthly 3G fee. If you store your stuff in a cloud and you want more than 5 gigs, there is that fee.

About this all being cheaper and greener…

Searching for answers
“So Pete, about that conference call tomorrow…”

It does make you wonder who’s in charge and where are we going.

Honestly, I don’t know. But I do know, that at least in the single copy side of the world,  we’ve been on a roller coaster since January 2009 when Anderson News melted down. Since the announcement of the iPad and the rollout of new 3G Nooks, Kindles, and whatnot, we print folk are supposed to see a renaissance of the business as we embrace the digital world. Which many of us already had. But still, we’re all dinosaurs. Or we’re all dead men walking.

Whatever. It seems to depend on who’s talking.

Consider this:

If you work at a company, you could work in a silo. Raw grain is inedible. You’ll starve if that’s all you’ve got. Do you work out of a bunkered missile silo? You do know that you’ll run out of food eventually.

So, really, if you work at a company, imagine that you’re all working at the dining room table. And you all need to eat. And you all want a nice meal.

So pass the food, talk across the table, not just to your neighbor, and learn some manners.

Husni Vs. Sacks: Who’s right? Who wins? Does it matter?

Dr. Samir Husni aka Mr. Magazine,  ( mrmagazine.wordpress.com ) has developed a well deserved reputation as a defender of the printed magazine. He loves them, collects them, teaches about them to college students. And in the era of digitized content, declares very eloquently that they are not obsolete. As somebody who is acutely aware of the fact that more than 80% of his income still comes from ink on paper magazines, I applaud Dr. Husni.

On the reverse side of the same coin, Robert Sacks (aka BoSacks.com), a leading publishing industry consultant refers to himself (and apparently Dr. Husni concurs) as Samir’s “very good friend”, but debates him just the same about the future of the printed magazine. Like all good consultants, Sacks opines that the future of the printed magazine is essentially one where it will be niche and pull in significantly less revenue for publishers as the world goes digital. In fact, Sacks is such a forward thinker, that he and his staff came up with a definition of a magazine that does not include paper or ink (or staples, for that matter). I realize that in ten years or so more than 80% of my income might come from this new definition of a magazine, so I applaud BoSacks too (although may be more of a polite golf clap).

Of course, there are industry gurus who seem to feel that the printed word is dead, gone and anyone who works with print is a dead man walking. If nothing else, they certainly get to write an awful lot of articles. The notably ironic and sarcastic “Reaper” of magazinedeathpool.com comes to mind. I keep my Twitter up throughout much of the day and have designated time in the late afternoon to follow some of the links that come through from the people on my list. Just as the iPad was coming out, the conventional wisdom seemed that print publishers were the walking dead and the iPad would ride in and rescue us all if we let it. If we continued to fight it, we would stay dead.

I should point out, that as far as I am concerned, I have rightly placed both Dr. Husni and BoSacks in my “Future Media” list on Twitter.

In his most recent blog post  (http://bit.ly/c26rbv), Husni writes: “Magazines, each and every one and each and every issue of every one, are a total experience that engages the customers five senses. “

And that is true, but you could argue the same about a digital edition. Even on an iPad or a Kindle or a desk top, there is tactile, maybe even some smell. But I’ve been around mags long enough to know what Samir is saying.

Sacks’ definition of a magazine goes like this: “a magazine must be paginated, edited, designed, date stamped, permanent, and periodic. But it does not have to use either ink or paper to be an ‘official’ magazine. Ink and paper are an unnecessary restriction in the 21st century.”

And technically, he’s right too. As Husni pointed out in his blog entry, you could call a “digital magazine” a magazine, but it’s not really a magazine like an ink on paper magazine is. He objects the comparisons that have been made between publishing and the music business. As he points out, “I listened to my favorite songs over and over. I used earphones, loud speakers, any and all the things created to help me listen to the music. The goal was always to listen to my favorite song over and over again. I did not care how the song was broadcasted or delivered.”

Couldn’t the same be said, then for magazines and even books? Could it be that three, five or even ten years from now, people won’t care how they get Outside Magazine, or the latest Nelson Demille novel, they’ll just want it? Don’t definitions of objects, over time, change?

After all, I can listen to an entire album on an LP, a cassette tape, on my computer, on a CD, on my iPod. In all cases, it’s an album.

What I like about Dr. Husni’s arguments is that he fights against the industry wags and arch ironists and says in effect (at least as I interpret it), “Pay attention. You have a viable, profitable business here and you’re about to run off and play with an untested shiny object that could bankrupt you if you’re not smart about it.”

Likewise, Bob Sacks points out (again, as I interpret it), “And don’t forget to pay attention to this shiny new object too. If you’re not careful, all you’ll be left with is a cute, niche business that will make less money than before and you’ll be considered a throw back to the old horse and buggy days if you don’t modernize.”

So I tend to think that these two great friends are arguing the same side of the coin. And, actually, I’m very grateful for that. Because they certainly got this publisher consultants attention.

From the Foredeck of The Titanic

In searching for a name for this blog, I tried a many ideas and discarded all of them as too clever or pretty. Everything I came up with seemed tired, trite, overwrought, uninspired, doomed to failure. In other words it sounded like most of the articles you read about single copy sales: trite and overwrought.  You get the picture.

Eventually I hooked onto a memory that seemed appropriate for what I am trying to do here. But to get there, let’s back up first so I can explain to anyone who may pass by what the blog is supposed to be all about.

I’ve spent my entire adult career in the single copy sales business. I’ve worked for national distributors, publishers of all sizes, consulting firms and I’ve consulted on my own like I do now. Part of the reason I stay in the business is that I’m good at what I do. It’s fair to say that I love magazines and can’t think of anything else that I’d like to do. But the biggest reason for my longevity is that in spite of all of the consolidations we’ve endured, in spite of the incredibly bad management some of our premiere companies and trading partners have encountered, in spite of the ridiculously uniformed and badly written press our industry has had to read, I’ve never met more interesting, inspiring, productive, funny, and lovely group of people. It is the people who keep me working away in this industry.

The goal here is to write stories about how we market our products , who we are, what we really do. I don’t really care how many readers I attract.  And I also want to write about the products that we’re responsible for: magazines. Why we love them, how we hope to be relevant in a changing world. My hope is that this becomes the story of how we adapted, changed, learned new skills, charted new paths.

If that is the story I get to tell, the ending will be very different. It will be about how we approached the brink of extinction and pulled back from it. How we turned onto a new course that brought us into safe harbor.

Or maybe not.

So the fact that the ill-fated Titanic is in the title of this blog may seem a little obvious. But I didn’t arrive at it easily. It’s related to that distant memory  I wanted to share:

Sometime in the late 1980’s or early 1990’s, I was calling on the Western Michigan News Agency. It was then managed by the funny and sharp edged Ron Lankerd  and owned by the Stoll family. Several national distributors had representatives based there. One of the things that made working there so much fun was the fact that these guys were the funniest and motliest crew in the area that was then my territory and the interactions between them and Ron was worth the long ride to Grand Rapids. Working in their “rep room” was sort of like being in the Cheers Bar without the beer (At least until lunch time).

One day a local publisher came into the room to review her distribution and meet with Ron. After a few minutes of working through the printouts, it became obvious that she was upset. There was a lot of huffing under her breath. A lot of hair tossing (so maybe it was the late ‘80’s ).  She went in to meet with Ron. She returned about a half hour later and was visibly pissed off.

Like most “Rep Rooms” of the era, this one was a modest sized room in between the front office and the warehouse. We worked on a random assortment of desks and tables that faced the four walls of the room. She whirled around in her chair, faced me and the other reps.

“You guys better go and find something else to do with your lives,” she fumed.

“That’s the goal, sweetheart,” said one of the reps. The others chuckled.

“Yeah, sweetie,” said another. “I keep trying to get fired, but they keep me because no one else wants this f*cking job!”

“I’m not your sweetheart,” she growled.

“Ain’t that the truth!” The third rep replied.

“You idiots don’t get it do you?” She said. “You’re dinosaurs! You’re like the damn Titanic. It’s all a nice party to you but you don’t see the iceberg and you don’t realize that when you sink, it’s going to go fast and you’re all going to be gone.”

She grabbed her things and left the building and I never saw her again. I heard from the Grand Rapids reps a few months later that her magazine went out of business.

Western Michigan News is closed and the Stoll family has moved onto other pursuits. Our industry has consolidated, and then consolidated again. The Grand Rapids reps were let go in the first round of consolidations.

Are our lives accident and chance? Or fate? Is it destiny? I’ve read articles where it is suggested that the Titanic didn’t have to sink. Captain Smith could have gone more slowly through the ice pack. There could have been more life boats. The designers could have built better bulkheads and water tight compartments.

But the Titanic did sink because none of that happened. So what about our business? Industry leaders have warned for years that that we’re heading for an iceberg. Are we? Many of the articles about our industry suggest that we are on the brink of disaster. Or that we have already passed that critical point and are now sinking beneath the wave of digital and web.

I could have named this blog “From the Bridge of The Titanic.” After all, I own my own business. I’ve been a reasonably well placed executive at a publishing company. I’ve worked in some visible places and I have longevity and experience. But I like the foredeck better. I’m closer to the waves. I can still see what’s coming but I’m not so removed from it.  And maybe, just maybe,  if I shout loud enough, the people on the bridge may hear me and steer clear of the iceberg.

If not, at least I’m close to one of the life boats. I have no interest in drowning.