Pandemic Publishing Roundtable: Jim Bilton, Media Futures and The Wessenden Briefing

By, Linda Ruth

On Wednesday, almost a full year after the onset of our pandemic, nine months from the first Pandemic Roundtable, hosted by Joe Berger and attended by Bo Sacks, Samir Husni, Sherin Pierce, Gemma Peckham, and me, we met again to review the state of our industry. Our special guest was Jim Bilton, the publisher of the annual mediafutures market analysis and the wessendenbriefing, the 7x newsletter covering print and digital trends and analysis.

While the scope of his business is international, we were particularly interested in hearing about trends in the UK, where his business is based, and how they relate to trends in the US and the rest of the world. Our conversation took us to the continuing strength of print, the re-dedication to print on the part of key retailers, and the excitement that our audience still finds in the world of print.

Jim: I was interested in reading in a past Roundtable about the direction Barnes and Noble is taking. That is such a huge part of your market; we have nothing like that in the UK. WH Smith was formerly number one in the UK, but they expanded into travel, which seemed a good move at the time, that has backfired; now magazines aren’t their main thing, stationery is. Tesco, a supermarket chain, leapfrogged over WH Smith.  Barnes and Noble is interesting because of its connection, through James Daunt, to Waterstones. But the size of the store format couldn’t work in the UK, where the rents are so high; we don’t have the big out of town malls to the same extent as in the USA. The interesting aspect, to me, is what Krifka said about focusing back on bricks and mortar, on print, and moving away from a strong digital focus.


Jim Bilton of Media Futures

Joe: We’re interested in getting your perspective on the effects of the pandemic on UK publishing, and where you expect it to take us from here.

Jim: During lockdown magazines did worse than newspapers. Sales dropped by 30% YoY, although they came back, and overall are now down about 17%. The travel sector fared much worse, of course, going into virtual hibernation initially and are still now about 80% down.  Here many UK publishers overreacted and slashed draws more than they needed to. Supermarkets held up; and independents have a bigger share than ever before. And there’s a background issue about the health of print—in terms of physical health; copies have been taken out of waiting rooms and shops because of health concerns and people have been made to feel uncomfortable about browsing at the magazine racks. This obviously hits impulse sales and discovery at retail.


Samir
: In the US, we’ve seen a big increase in people of color on magazines; are you seeing the same trend in the UK, and is it helping or hurting sales?

Jim: Yes, we are seeing the same trend, but the impact on sales is difficult to size given everything else going on in the marketplace. One launch I can point to is Cocoa Girl magazine, celebrating Black girls. We’re generally seeing lots of small launches, specialty launches, and a bit of a trend from digital to print.

Bo: Last time I was in the UK most publications had cover mounts(Polybagged magazines with attached products of one sort or anohter) ; is that still a trend?

Jim: Yes, though not quite as much as before. There’s a big sustainability issue, and issues having to do with returns. Publishers are learning to move premiums closer to content, so they relate more directly to the content of the magazine. The same has been true of events—although of course that’s less of an issue now. But we haven’t realized how exciting our world is to our readers. Everyone’s got a wine club; but audiences want the unique content a publisher has to offer. Another trend we’re seeing is publishers varying cover price depending on content and pagination.

Sherin: Varying price issue to issue is something you really couldn’t do here.

Sherin Piece, Publisher Old Farmer’s Almanac

Jim: Yes, retail hates it, it causes problems.

Joe: Have your retailers adopted Scan Based Trading?

Jim: We’re getting it in progressively through the back door—WHS and Sainsbury have a soft version, supermarkets are getting ready for it, although each has a slightly different version. The pandemic has had the effect of creating more demand for it from retailers, who are asking for it to mitigate the demands made on their in-store personnel.  

There has always been resistance from publishers, who demanded much lower shrink levels before it would be considered. Yet the industry, led by Future Publishing, has decided to take the lead – they see it as inevitable and choose to manage it up front, to take the initiative rather than being forced to do it. Now other publishers are coming along. Wholesalers say this will be margin neutral—that retailers will concede margin but make cost-saving gains. In the US the situation got out of control, everything went the wrong way all at once. By contrast, in the UK the negotiations are tough, if the retailer wants SBT they have to give something.

Joe: In the US some publishers have seen an uptick in subscriptions with the pandemic. Have you seen that in the UK?

Jim: Subs are booming—mostly print subs. With publishers worried about their future at retail, many made the mistake of going crazy with front end acquisition. Now Hearst UK, for example, has been firming up sub prices. They, like lots of publishers, were doing short-term low-margin offers to build their files. They were overwhelmed by the response and are trying to back off on that. There were a lot of people in the funnel already, and all the cut-priced subs have done has been to shovel them in more quickly, and less profitably.

Joe: What percentage would you say subscriptions have increased?

Jim: Acquisition activity increased massively, but much of this was based on short-term, big-discount offers, which are now converting at quite low rates. When all this churn is taken into account, my sense is that total subs file sizes will end up being flat year-on-year in 2020. But that’s a big improvement on the 8% year-on-year drop seen in 2019.

Bo: What trends are you seeing digitally?

Jim: Financial people like digital editions; readers don’t so much. Newspapers are going into a digital black hole in terms of revenues apart from a handful of high profile brands like the New York Times or the UK Times and Telegraph. But what digital means to magazine publishers is very different from what it means to newspapers. Magazine publishers are still wedded to the issue rather than website accessed article level streams, which is the core of the newspaper digital offer.

Samir: It requires constant upkeep to maintain a digital file, a digital list. Publishers constantly collect and re-collect names, contact information. Has anyone found a way of making money?

Joe: For example, one of my publishers had 20,000 subscribers spread across the platforms; without constant upkeep, attrition can be rapid, and they’re down to a fraction of that now.

Sherin: Our only monthly publications, the OFA Extra, is digital. We send them a notice when an issue drops, and only revisit them for renewal annually. We keep it as simple as possible. People start with so many barriers, but you have to simplify that.

Gemma: We make our digital version free to print subscribers.

Gemma Peckham, Editor Rova Magazine & Oh, Reader Magazine

Jim: That’s why most legacy publishers are holding on to print. Hearst Premium—making best out a bad situation—has lower frequency, higher pagination, and a higher cover price at its core. Digital is still a thin medium that consumers aren’t prepared to pay a full amount for. To make this difficult field profitable, we might look to e-commerce. How high can print cover prices go?

Bo: Much higher than you might think.

Gemma: Magazines are still really underpriced.

Bo: We have to continually make the transformation from a perceived commodity product to a necessary luxury product worth paying for.

Jim: In the UK, everybody is putting their prices up.

Linda: What do you see as the effect of Brexit on exports.

Jim: A lot of UK publishers are going digital-only for export sales rather than shipping print across borders. And anyway, our really big export markets are the USA and Australia, not so much Europe. The Brexit issue more has to do with cover mounts and where your paper comes from, where you’re printed, what borders are crossed on the way to creating the final finished product. For example, a garden title with cover-mounted seeds had problems getting across borders. And it varies from country to country. In France and Germany, the supply chain is tightly regulated. But as we go into Brexit, everyone has their Plan B and Plan C. 

In the UK, every link in the chain is under pressure. Publishers are feeding less product into the market. Retailers are cutting ranges and the space allocated to newspapers and magazines. Yet the recent focus has been more on wholesale. We only have two mainstream wholesalers now – Smiths and Menzies – with Smiths recovering from a disastrous diversification programme which caused them some serious financial issues. In response, some of the newspaper publishers had been looking at a newspaper-only distribution network – although this has gone quiet now. If we ever went down that route, then magazines would lose many of their current advantages – five- or six-day a week magazine deliveries, sales-based replenishment and national on-sale dates.

Samir: Vogue sold out its Harry Stiles issue in Barnes and Noble. They had to replenish.

Jim: Print still has immense power in the magazine business. Look at Amazon. Around their major markets, they offer print and digital, single copy and subscription. They understand that magazine consumers want print as well as digital. Print is still the “gold standard” and is still part of the “magazine experience”. At least for the foreseeable future. Yet there is no single, simple business model that works across every market. It’s all about understanding your own audience and delivering what they want. Not what you think they want.

Some Places Remembered

In the very first post of this blog I pointed out that one of the reasons I started it was to write about some of the great “characters” I met. During the years when I traveled frequently I met many people who left indelible memories with me. Most of these people were friendly, hard-working and interested in doing a good job. Some of them were complete characters. A few of these “characters” were very lucky to avoid incarceration.

Earlier this week I wrapped up rolling over all of my files to the new year. More than 90% of them are now completely digitized (They never get printed and filed). That meant it was time to clear out some old “analog” files, folders and binders. That also meant it was long past time for some of the old “wholesaler” files to make the final trip to the shredder.

But before that last trip, here’s a few “memories” to share:

  • The “old” Rep Room at CLCC’s (Chas. Levy Circulating Company) 1140 North Branch location was one of the loudest places I ever worked…
  • That is, until it moved to 1200 North Branch. Then it was one of the more unsettling places to work because I could never get used to the feel of the building trembling when the semis would back into the loading dock and bump the wall.
  • Whenever I drove to Southern Michigan News in Jackson, MI in the first quarter of the year, it always seemed to snow. I would always keep a count of how many cars were off the road and in the ditches on I-94. It was a big number.
  • Ron Lankerd, the GM of Western Michigan News in Grand Rapids wouldn’t let me park my foreign-made car close to the building. He is a GM man.
  • While working for a publisher early in my career, I was sent on a trip in early November that took me from the ARA agency in Spokane, WA to the wholesaler in Coeur D’Alene, ID, and finally on a circuit of all of the wholesalers in Montana (There were at least five at the time). When I arrived at the agency in Missoula, the manager looked up from his desk and said, “You’ll probably never get out of here if it starts snowing. Can you work a tie line?” It did start snowing and I did (barely) get out of there. I really didn’t want to work that tie line.
  • Ladies of a certain career choice used to walk the street next to Buckeye News in Toledo, OH.
  • The state of Iowa serves the best pie.
  • The state of Minnesota serves the next best pie.
  • I never found a decent Chinese restaurant in Mankato, MN. Hopefully things are better now.
  • The original location of Iowa Periodicals in Des Moines, IA (pre-consolidation) was next to the airport and you could hear the Iowa Air National Guard practice take off and landings.
  • While the wind chill made it -50F in Chicago last week, I worked at Badger Periodicals in Appleton, WI one week when the thermostat read -40F before the wind chill.
  • Ohio Periodicals in Cincinnati, OH had one of the smallest Rep Rooms I ever worked in. I believe Tom Doddy liked it that way. That is one of the numerous reasons I like Tom Doddy.
  • I often wondered if the pipes that ran next to the Rep Room (located in the basement) at Klein News in Cleveland, OH carried toxic waste.
  • There was a “warehouse cat” in the pre-Anco Lexington, KY warehouse.
  • One of the owners of M&M News in La Salle, IL brings his dog to work. Dogs, warehouses and magazines all go together better than you would think.
  • I used to time how long it took for the donuts I brought in to disappear from various break rooms. In Jackson, MI, they consistently were gone in about 5 minutes. At Ludington News in Detroit, they took about an hour. Steubenville, OH took most of the morning (it’s a small office). Lima, OH, about the same. Dubuque, IA seemed to prefer bagels.
  • Pat’s Donuts in Lima, OH are incredibly good.
  • The security guard at the Ludington News parking lot often seemed pretty angry about something and I always wondered what it was.

The former Ludington News building. Source: Google
The former Ludington News building. Source: Google

  • The rep room in Ludington News was surprisingly nice.
  • The reps in Ludington News were all pretty nice to work with.
  • Actually, everyone at Ludington News was good to work with.
  • The Scottsbluff National Monument in Scottsbluff, NE is very impressive.
  • I always seemed to have to go to Gopher News in Minneapolis in either the dead of winter or the height of mosquito season. Timing is everything.
  • The warehouse at Wholesale Distributing in Burlington, IA was a former WWII era Quonset hut. John Sandell, their owner, was one of the most interesting (in a good way) people I ever met.
  • For a few years, I would take a trip in early spring that would start at Norton News in Dubuque, IA and then run down the Mississippi River to the agencies in Burlington, IA and Quincy, IL. Then I’d either turn north and finish in Springfield, IL or south and wrap up the week in Johnston City, IL. We flatlanders often only look at Lake Michigan and forget about the river and the prairie. They are truly impressive.
  • Bob Pilkey, the general manager of Joliet News and later M&M News in La Salle, IL was one of the nicest people I ever met.
  • The warehouse for City News Agency in Canton, OH was a former horse barn. As late as the 1990’s, the office decor was strictly 1950’s.

The former City News warehouse. Source: Google
The former City News warehouse. Source: Google

  • The best MAPDA/PACIMWA convention I attended was in Tucson, AZ. But that was because I mostly wanted to sit on the balcony of my hotel room at stare at the mountains for the duration.
  • It was generally considered unwise to attempt to visit Louisville News during Kentucky Derby week.
  • It was generally considered unwise to attempt to complete any work at Louisville News after lunchtime at any other time during the year.
  • I recall particularly good bar food served in the bar across the street from Indiana Periodicals in Indianapolis.
  • The Pekin News Agency in Pekin, IL was located in a candy shop. The candy shop (which is also a newsstand) is still open today.  You can buy their delicious candy online. Like many retailers, they’re also on Facebook
  • I could never get a trip approved to the ARA agency in Hawaii.

None of these memories are intended to be maudlin. As I’ve said numerous times before, I’m not one of those believers that “things were better in the good old days.” Heck in the newsstand biz, the “good old days” were considered horrible.

But we should consider what worked in the past, and how the creative and hard-working people who came before solved the problems they encountered. There is a warehouse of knowledge there and maybe a key to solving today’s challenges can be found in how they were approached in the past.

And why not call up a good memory sometime, put a smile on your face, and then dig into your day?

In the comments below, please drop in some of your favorite memories. If you have something longer to share, or a photo or two, send them my way via email.

The Trailing Edge of….

Shortly after the national distributors reported on the new fee structure The News Group was rolling out, I started to work on a post for this blog. Through that first weekend and into the limited off time I had in the past weeks, I wrote, edited, pared down and and re-wrote.

Ultimately what was put together was a pretty good explanation of what had happened, what it could mean, and what, if anything positive, could come from this new arrangement. The people who previewed it for me thought it was a pretty well written piece that was fair, balanced, and for me, low on snark.

Then, I decided to leave it in the draft bin.

A colleague asked me if this was self preservation. That’s too obvious. Discretion could be a better answer. Or maybe just let’s wait and see.

The mysterious print blogger, D. Eadward Tree published an interesting piece last week entitled “A Funny Thing Happened on The Way to the Funeral of Print Media”. In it he pointed out a series of reasons why print hasn’t died. They range from the unwelcome return of junk mail to the launch of print versions of digital properties.

Hmmm, I thought, interesting.

Things finally slowed down late last week.  I got a clearer vision of both where the News Group initiative may go and what was happening with some of my clients beyond News Group (Day to day operations will often tell you a bigger picture). One afternoon I found a response to Mr. Tree’s article from the Media Shepherds’ Noelle Skodsinski.

She rightly suggests that the question should no longer be “Will print survive?” but more along the lines of how print will change. She amusingly compares the whole “Print is Dead” question to an annoying gnat that buzzes around your head. Well, thank you for that earworm!

Which lead to this train of thought: At one time, about the only thing we saw in digital in terms of magazines were web sites full of free replicated content. Over the past few years, we’ve seen the advent of the following:

  • Interactive web sites
  • Pay walls that work
  • Tablet replicas
  • Unique tablet editions that readers will pay for
  • A whole new digital subscription industry that looks like it’s here to stay and grow beyond what we can imagine
  • Social media marketing

And I’m sure there’s more I can’t think of at the moment.

What’s happened to the newsstand business during this time period?

  • Declining sales
  • Consolidating wholesalers
  • Consolidating national distributors
  • Shrinking racks

To be fair, we have had some solid new title launches like the Food Channel Magazine, the rise of book-a-zines, and the advent of digitized store level data has made it easier to see where we sell our magazines. But overall, the negatives from our side of the business often seem to outweigh the positives.

So is the newsstand world condemned to be the trailing edge of the publishing world? The last piece that touches the digital air? The horse and buggy industry didn’t die off completely. Many suppliers  tranformed themselves into suppliers for the automobile industry. But it is also true that other manufacturers could not change. They were held back by their legacy businesses and if they survived they remained much smaller niche businesses.

The question remains, does our newsstand DNA prevent us from transforming how we do business? Is there a way that we can take the initiative back, sell more product? Become profitable?

Seems to me that it’s sleeve rolling time.

Five Simple Steps To Fix The Newsstand Industry

Nope. This post won’t address the Pay on Scan issue. Nor does it contain specific financial or production advice to the remaining three biggest wholesalers. There is no “10 Point Plan!” demonstrating how our four largest national distributors can remain relevant.

Are these the right steps to fix the business? My nose has been on the grindstone for much of the past four months and these thoughts are what smacked me upside the head yesterday afernoon after reflecting on what passed for a heavily revised and reviewed print order landed in my in-box.

So…

Five Simple Steps To fix the Newsstand Industry:

1. All sales are local.

2. Sell local. Can you learn what sells in that store? If you can’t, why are you messing with that make order? If you don’t know, why are you servicing that store?

3. Promote the category. If publishers, national distributors and wholesalers can’t get together to promote our product, then who will? What reason are we giving readers to go out and “discover” our product?

4. Stop undercutting our own category with cheap subscriptions.

5. Stop whinging about digital. It’s here. Deal with it. Work with it. Learn it.

Any questions?

Upon further review, I’d add the following:

2a. Make the tools to discover what sells in that store readily available and CHEAP to acquire. Most publishers, mainline publishers at least, already give up 60% or more of their cover price to get to that store (Not including promotional dollars). They should be encouraged to understand their distribution and have input into how it is developed. After all, they know their readers. Their customers are the retailers customers.

2b. Make the tools that drive distribution more universal in nature and marketing driven. Everyone involved in distribution should be able, at a quick glance, to know rack size, number of checkouts, store demographics and store volume when they make a distribution decision.

Where’ve I been? Very busy. And there are about 12  transcripts sitting in the edit que waiting to be edited. But for a solo practioner who’s also trying to learn a new facet of the business one can either work or write blog postings. Blogging is important. But I have to admit that paying work and reasonably satisfied customers takes precedent. I hope to be back up to speed with more topics as we move towards the end of the year.

On a related front: I am intrigued with the hints we’ve received from media guru Bob Sacks and fellow consultant Luke Magerko. So far, they’ve revealed some pretty straightforward suggestions that daily practitioners like this writer and many of my colleagues attempt to practice. Hopefully there are more reveals that will hape this industry rethink, in a positive, sales growth oriented manner how we work.

Because who in their right mind wants to work in and manage a declining industry?