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The iTune-ization of the Magazine

Posted on Monday, March 26, 2012 at 5:06 PM

Is it time to sell our articles one at a time? What dangers lurk therein?

By William Dunkerley

What's the next step in the modernization and digitization of the magazine? Some believe it is the abandonment of the concept behind a magazine: a collected assortment of articles chosen for readers by the editors.

Controversy: The Concept of the Magazine

To many in the publishing field, that idea may sound heretical. After all, the fundamental notion of a magazine is the preassembled collection of articles. Webster defines the word "magazine" as a place where goods or supplies are stored. In our case, what's stored is the group of articles. If there's no grouping, there's no magazine, right?

On the other side of this argument are the proponents of the iTunes approach. They say that the traditional concept of a magazine is outdated, that the Internet is all about individual empowerment and self-selection of content that suits one's personal interests. According to the iTunes proponents, smart publishers will recognize this and be open to the new realities.

Which way will things really go? That's an important issue for any publisher to consider. How you craft and refine your digital strategies will have a big impact on your short- and long-range success. So do you stick with the "album" of articles or start selling single articles?

The Steve Jobs Approach

To explore the idea of going the iTunes way, I'd like to review some ideas from a recent Forbes magazine article entitled "Steve Jobs' Ghost: Hi-Res iPad Will Undermine the Magazine Model." Its author, Anthony Wing Kosner, believes that Jobs' decision to make the "song" the primary unit of sale was key to the success of iTunes. Jobs had observed the burgeoning illicit file sharing of music singles and saw opportunity. The traditional music industry had been focused on selling albums. Jobs contemplated the music landscape and decided to go with the singles, not the albums.

Bringing this around to magazine publishing, Kosner says, "...when it comes to the world of magazine publishing, that lesson has not yet been learned." He believes that with a new high-resolution display, the new iPad will put the traditional magazine approach under considerable pressure. He seems to expect that the magazine will go the way of the album.

Kosner contrasts magazine publishers who call their products "issues" or "editions" with readers who have called them "loosely associated bundles of content, only a fraction of which they will actually read."

Selling Single Articles

He also raises an issue -- selling single articles -- that we all should be reconsidering. In the print era, this was called "reprint sales." For many magazines the greatest market for such was to companies who wanted to use the reprints for PR or marketing purposes. Maybe the company was favorably mentioned in an article, or it was written by an employee.

In digital publishing, many magazines have made their articles freely available online as a self-promotional technique. That approach was in consonance with the "everything's free" culture that was a hallmark of the early Internet days. But now that consumers have gained more e-commerce experience, the notion of paying for individual articles may not be as off-putting as it once was.

Beyond that point, however, Kosner's likening of magazine sales to record albums misses some obvious realities. For one thing, when a consumer buys a song, it's unlikely the song is intended for single use. It's a keeper. A magazine article is more likely to function like a disposable. You use it once, then discard it. That distinction will certainly have an impact upon the relative perceived values. An impulse purchase for something with durability like a song may be easier to stimulate than one for a single use article.

Kosner trumpets Jobs' genius in perceiving the market demand for music singles that was evidenced by the Napster phenomenon. Kosner seems to believe this album-to-singles move was an expression of a change in consumer preferences. It may have been, though the earlier formats for recorded music, the 78 rpm and 45 rpm records, in effect offered singles. I don't know whether the album era arose from a shift in consumer preference or whether it was an industry initiative for convenience and profitability. Either way, the pendulum has clearly swung back to the singles.

Magazines never did have a similar single-copy antecedent. There was in the print era a similarity to the music album when it came to convenience and profitability. Printing a magazine with just one article wasn't practical. But does this mean that consumers have been thirsting for single articles all along, or that with the advent of mobile devices and tablets that thirst has now developed?

I think there is little evidence of the former, but reason to seriously consider the latter.

Magazine Buying

Think about how magazines are bought. According to MPA, 90 percent of magazine circulation was by subscription in 2010. Single copy sales accounted for only 10 percent. To me that means most magazine consumers are interested in buying the experience of a regularly delivered magazine. If a single issue can be likened to a music album, then a magazine subscription is something like buying an album of albums, delivered in installments.

When consumers buy music, they're after the songs. But when they buy magazines, they're after an ongoing experience, indeed, a relationship with the magazine. Instead of there being a consumer swing toward small capsules of information, the trend has been in the opposite direction. In 1975 single copies accounted for fully 34 percent of magazine circulation. But that has steadily gone downhill to the 10 percent of today. And overall circulation is now up 23 percent from 1975! These facts seem to speak affirmatively for the magazine concept.

Advertising Support?

"Highly popular articles could be completely ad supportedā€¦" Kosner imagines. But of course that notion ignores some advertising fundamentals.

An ad in a one-shot article will be far less effective -- and worth less. In a magazine, ad effectiveness is bolstered by sharing in the trust that readers have developed in the publication. The advertisers also have the opportunity for repeat exposure, a valuable asset.

The Myth of the Digital White Knight

Then, what about the demand for magazine content for mobile devices and tablets? Association Media & Publishing published in its Sidebar newsletter interesting survey results. Participants were asked, "Do you have plans to spin off or launch a new print publication of any kind in the next 12-18 months?" Only 3 percent said yes. But 28 percent said they are launching digital publications instead.

At the same time, Businessweek reported on a revealing trend in the newspaper industry: "U.S. newspapers lost $10 in print advertising revenue last year for every $1 they gained onlineā€¦" I suspect that the experience of magazines is not dissimilar. Print revenues are going down, but online revenues are barely inching up.

What should we make of this? I think it is that the charge toward digital by many publishers is based on hopes for a reversal of fortunes. A lot of publishers lost ground during the recession, principally from soft print advertising revenues. And they've been unable to rejuvenate those ad sales. For some, going digital is basically a cost-cutting move, to bring expenditures more in line with reduced revenue expectations.

The aura of great digital profitability is fanned by the glowing forecasts from techno-visionaries such as Anthony Kosner. I admire their enthusiasm for the technology. The new devices are truly spectacular. But there doesn't yet seem to be an equally spectacular business model for publishers.

Last month I pointed out that when a publisher sets its hopes on finding a digital audience, it is excluding the 92.3 percent of adult Americans who are not in a position to read a magazine on a tablet or e-reader. What's more, there are strong indications that e-readers, in their present form, are not a very satisfying means for reading periodicals in the long run. Once the novelty wears off, interest wanes.

Ad sales are problematic, too. One publisher remarked, "Our digital advertising continues to prosper. However, I cannot sell a banner ad for anywhere close to the price of a print ad."

The tragedy in this is that many publishers are off chasing digital dreams of new and significant revenues. But the reality of capturing those revenues may be as near as the end of a rainbow.

At the same time, though, there are practical opportunities for regaining a good share of lost print revenues. It's just that many publishers are not experienced in the techniques for going after them.

My recommendation is that a publisher's advance into digital should be measured and experimental. There is no body of business experience in digital that can tell you what the right moves are. There is a lot of hype and technology-entranced thinking. It represents a real danger of diverting your efforts into unproductive areas.

Rather than base your plans on such chimerical promises, it would be better to take an experimental approach. Test digital initiatives and look for bottom-line results. But in the meantime, rethink ways for recapturing lost print revenues.

William Dunkerley is principal of William Dunkerley Publishing Consultants, www.publishinghelp.com.

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