National Geographic Adventure has lost its passport. It’s the latest casualty in the 2009 media meltdown. Staff was told today that the magazine, a 10-year-old extension of National Geographic, would close, according to a report by Folio:.
Seventeen staffers will lose their jobs, the report says. The brand will continue online and with other affiliated products.
Seth Godin is one of my favorite bloggers, and I quote him regularly. He’s been a source of clear thinking and wisdom for me since long before blogs existed.
But in today’s blog, he writes about News Corp. Chairman Rupert Murdoch’s idea to control how news content is indexed on web sites. He got it wrong. He writes, in entirety (and you’ve got to admire Godin’s brevity):
You don’t charge the search engines to send people to articles on your site, you pay them.
If you can’t make money from attention, you should do something else for a living. Charging money for attention gets you neither money nor attention.
If Murdoch were just another blogger, or just another guy with another product to shill, I would agree with Godin. But Murdoch owns one of the largest news-gathering organizations in the world. And here’s the point that Godin misses:
When search engines index vast troves of original content, such as Murdoch’s News Corp., the impact is synergistic:
Here’s the nuance; there is less and less original content of the kind that News Corp. produces. Anyone who has ever used the Web has had the experience of following one good link after another to find they’re all connected to the same piece of mediocre content. The money dedicated to generating high-quality content has evaporated; it’s down by more than $1.5 billion in the U.S. newspaper business alone – not to mention all the other businesses that pay content providers to create information that people want and need.
So anyone who wants this kind of content to continue, must make some kind of investment in it.
When search engines index to content like that provided by Murdoch’s company, they profit by selling sponsored search results in the space around it.
But the news organizations’ only means of profit from this activity is to sell advertising around the content. But advertising isn’t selling – nor is it expected to significantly recover. Further, a portion of the money that marketers no longer spend to advertise in newspapers and magazines has been reallocated to the paid search function of search engines.
So why shouldn’t they pay for the right to index high-end content?
The attention that search engines generate is doing less and less good for newspapers and other free-content websites. If News Corp. can’t sell ads around its content, it has no reason to care if search engines promote the content.
So Godin has it wrong. He supposes that news media get the larger share of value in their relationship with search engines. In fact, to the consternation of anyone in the news business, it’s the other way around.
Further, the search engines may be able to extract even more value. Right now, one search engine is much like another. But if one could brag that it’s the only search engine to index the world’s largest news generators, that might make a difference to consumers. I know it would to me.
I don’t know if even Rupert Murdoch has the juice to take on Google. But he may be able to set the big search engines against each other. I don’t know if he’ll succeed in getting paid by one search engine and in locking out the rest. But to me, like it or not, it sounds like the kind of clash that isn’t likely to go away without creating some kind of change that affects everyone.
Here is more background on the issue:
Murdoch no longer alone in desire to block Google
Murdoch wants a Google rebellion
A study by Boston Consulting Group indicates people are increasingly willing to pay for local and national news delivered to their mobile devices.
On average, according to the study, the price would have to top out at about $3 a month, which admittedly isn’t much. But it offers two strong points of optimism:
People are willing to pay SOMETHING for what was previously assumed to be of no commercial value.
$3 a month, for a product that no longer has the production or distribution cost of a printed product, is worth far more in the way of earnings than it would be for a traditional media product.
No, this isn’t proof that consumers will pay the full cost of journalism. But does demonstrate that they are aware of the pressure that traditional media models are under as advertising revenue continues to erode; and that they are warming up to being part of the solution.
According to AudienceDevelopment.com, audited circulation levels are declining at historic rates.
This actually points to two trends — one economics related, and one customer-induced.
The first is that publishers are cutting circulation in order to reduce cost. AD states that “183 publications decreased circ 5 percent or more compared to 142 a year ago and 101 the year previous. Conversely only 41 publications increased circ five percent or more compared to 76 the year previous.”
OK, so publishers are cutting circulation to reduce printing and postage costs. It happens in every recession, and it won’t come back much, if at all, following this recession because advertisers won’t accept rate hikes in exchange for a larger rate base. There’s simply no money in sending more publications to more people.
But the second trend is bigger and more meaningful to advertisers and publishers – and it could put the auditors out of business. That is that publishers are dropping their audits altogether because the audit process provides decreasing ROI.
AD states: “Departing titles far exceed newly audited titles. A record 69 titles were discontinued or ceased being audited and only 23 titles were added to the audited ranks. The total number of audited “consumer magazines” fell from 545 a year ago to 499.”
More and more advertisers are changing their perspective from wanting to reach a verified audience to wanting to achieve a measurable response from whoever they reach – a painfully fundamental change that I’ve previously addressed, and which most publishers – especially in the glamorous consumer world – are still trying to tiptoe around.
A hundred valid responses from an unaudited audience is worth 10x more than 10 valid responses from an audited audience.
From a publisher’s perspective, if you can deliver the responses, the audit becomes irrelevant.
Based on this, the audit bureaus ought to be frightened.
And while abandoning your audit is still a bold step in the magazine business, I assume that most publishers who do so are reinvesting in products that deliver the kind of results their customers really want.
The parties I’m most concerned about are the publishers who haven’t talked about leaving the audit behind. Because if it hasn’t occurred to you, then you clearly haven’t been listening to what your customers want. And this is one of those watershed times when the only security is to be so close to your customers that you can feel them breathe.
The New York Times, according to one of its own, is close to deciding whether to try charging for online content. If you assume that the best way to bolster the future of news is to figure out how to get people to pay for it online, then this is important – and a good thing if The Times does, in fact, try charging for content.
The only way to get people to start paying for content is for a few leaders to simply take the leap and start charging. Rupert Murdoch’s News Corp. is implementing a plan to do so. Having The Times follow would only be good for the movement.
Can it work? That’s the big debate in media. Many think content wants to be free. Others, like myself, think consumers want it to be free primarily because they’ve been trained that content comes cheap. What nobody knows is how much people will actually pay, or whom they would pay, for real journalism.
If the news is to find its footing again – that is, if anyone is ever going to figure out a 21st Century business model by which journalism can flourish – the starting point is knowledge of the true value that journalism has to its end users. This is something that’s been obscured for the past 150 years.
Will consumers place enough value on it that they are willing to pay the full, unsubsidized cost of sending investigative reporters to do what they do (and defending against the inevitable lawsuits that are a byproduct of their work)? It would be nice. It would simplify the quandary of media executives, who are now gathering in solemn charrettes in search of a bew design for profitable media.
But the truth is that nobody knows. We don’t know what a newspaper would actually cost if paid for fully by readers? Or how its mission, staffing levels, range of focus and intensity of reporting might be adjusted over time to reflect the market-based measure of its value. How would it be distributed? How often would it be published? Who would its readers be?
None of these questions can be answered until enough media simply jump in and try to find out. Until now, few (the Wall Street Journal being the only one of any critical mass that I can come up with) have taken that risk. If The New York Times is getting ready to give it a try, desperation in the business may be reaching some kind of tipping point.
I’m fully confident that real journalism has a significant societal value. The problem is that it’s always been paid for indirectly. Once that value is untethered from the indirect means by which media have always monetized it (that is, advertising), then the real work can begin to right-size the industry and focus efforts where they deliver the most value.
There is real risk that the result would be even more “circular media,” in which celebrities are first manufactured and then covered by the same media organizations as if they were of real consequence (Jon & Kate and Lindsay Lohan represent two train wrecks in which the front of the train has crashed into its own caboose).
But I’m more optimistic than that. I have enough faith left that if news businesses got serious about charging for the news, they would eventually achieve market balance – knowing how much to spend, and optimizing that for the best impact, as defined by consumers.
I’m hoping the Gray Lady of New York is ready to give it a try.
While newspapers are wallowing in catastrophic circulation losses, their online revenues are falling short of objectives, and more people look to the web for news, Amos Gelb, a former TV guy and now an associate professor at George Washington University’s School of Media and Public Affairs, suggests a new model for profiting from running a serious news operation: cost transference.
In short, the idea is for Internet Service Providers (ISPs) – his example is Verizon Internet – to pay for news feeds on a per-subscriber basis. It’s how CNN works – collecting 37 cents per subscriber from every cable television provider that carries CNN (which is pretty much all of them). While CNN does earn revenue on advertising sales, its most dependable revenue stream is from the cable providers – which in turn simply pass that cost along to consumers as part of the cost for basic service on their monthly bill. And consumers don’t seem to mind – even though there is plenty of market evidence right now that they wouldn’t pay the same 37 cents per month directly to CNN if given the choice.
How does this transfer to newspapers? The largest news organizations (Gelb cites Time Warner, New York Times and Washington Post) would block their content to ISPs, except when paid on a subscriber basis. Those ISPs that make the payments would then pass along the cost to subscribers.
People who care about getting news content online would gravitate toward those ISPs that provide it.
The model strikes me, on its surface, as incredibly complicated given the wide range of business models that exist among ISPs. It also doesn’t include the many smaller news organizations that, one way or another, are going to survive, but will never be large enough to command attention from ISPs.
I don’t ever really expect to see the model play out as Gelb describes it. But I like the out-of-the-box thinking he brings to the discussion, and I agree with his assessment that news is something people want, and something people will pay for – just not directly.
In fact, the way I see it, it’s already playing out on small scale and through a slightly different medium: the burgeoning app store business.
There are now multiple places where smart-phone users can buy applications: iPhone’s App Store, Blackberry’s App World, and soon, Palm’s App Catalog. Each of these offers apps that let you aggregate and read news from various sources. Many are free, some cost money – from a $2.99 one-time download fee to monthly subscriptions (or so I’m told, though I haven’t actually found one on the monthly model in my time at either of the functioning app marketplaces).
So people are paying money to download an app that will deliver the same news they could get for free right now on the Internet? It’s a little different than the model Gelb envisions, but it plays out the same way psychologically: People who buy these apps aren’t actually paying for news; they’re paying for a new gadget on the smart phone. The cost has been transferred.
Gelb’s notion is heavy lifting, to be sure. To achieve the kind of behavior change that he describes, large news organizations are going to have to give up on their most cherished belief: that increased profit necessarily derives from increased distribution. And then they would have to convince numerous other organizations – like Google, Yahoo, Verizon and AT&T – to alter their business practices, all while risking the anger of their paid customers.
It sounds like a long shot at best. But the drastic decline in circulation and revenue that news media is experiencing is, if nothing else, a strong motivator.
In a move that startled almost everybody, Condé Nast is closing four magazines: Gourmet, Cookie, Modern Bride and Elegant Bride.
At some level, though, this shouldn’t be a surprise; the two bride titles are simply maids of honor to Brides magazine – also owned by Condé Nast. Elegant Bride, with 150,000 total circulation is a niche magazine for those who plan to buy luxury weddings. Modern Bride, with 335,000 total circulation, is positioned as the hip, fun and stylish magazine in the segment. Brides is simply the No. 1 with 340,000 total circulation and, notably, a network of local/regional bridal magazines.
Once upon a time, this kind of segmenting made sense. It assured the perfect fit for every possible advertiser, and many of those advertisers – given a little incentive – could find reason to buy into multiple titles.
I don’t have any idea how many of its bridal advertisers are still buying in multiple titles; I’m sure it’s a lot – but I’m also sure it’s not as many as a few years ago. Much of that piggyback revenue will be hard to replace. That’s why company executives needed a third-party consultant to tell them what they already knew: In today’s environment, it’s no longer economical for a magazine publisher to serve a category both horizontally and vertically.
Casting away two out of three heritage brands is scary, and some observers are already beating up the company for the decision. But I’m guessing that the publishers (Modern down 21 percent this year and Elegant down 32 percent) were already getting early reports of a continued bloodbath in 2010, as more advertisers rationalize their purchases across a few broad-based titles per category. If Condé Nast hadn’t made this gutsy call now, then its recession would simply drag on into next year.
By consolidating all bridal business into Brides, Condé Nast undoubtedly gives up a lot of revenue, but it also reduces a lot of expense. And what it gains is the ability to focus all development efforts on the one brand that is already recognized as the industry leader and that already encompasses all bridal niches. In fact, the company has said it plans to double Brides‘ frequency to 12x.
The recipe is pretty much the same for Gourmet – which has a rate base of 950,000, compared to Bon Appetit (also owned by Condé Nast) with 1.3 million.
The company has probably had an increasingly difficult time justifying a two-book buy to its advertisers and has been told that it needs to make their ad buys simpler and more cost-effective.
Cookie is probably a different situation altogether. It’s a lifestyle magazine for the modern mother – a category that would overlap with parenting titles, women’s titles and shopping titles (of which Condé Nast closed one, Domino, early this year). It’s a hyper-competitive 
category and, founded just four years ago, Cookie (total circ: 550,000) probably never had a chance to develop its own secure presence in the shrinking marketplace. Other titles in the Condé Nast portfolio include Vogue, W, Glamour, Allure, Self and Lucky.
Condé Nast CEO Charles Townsend told the New York Times that the decision was simple: The four magazines were losing money and that’s no longer going to be tolerated. He also said no more closings are planned.
Which may be the truth. Today.
An interesting bit of information from the TV world:
The new Jay Leno Show is particularly successful in one area: reduction time-shifting – which is the practice of watching a show at a time other then when it airs – basically through TiVo or other recording devices.
Last year, according to a report in MediaBuyerPlanner, which cites TiVo as its source, 70 percent of viewers watched NBC’s 10 p.m. programming on a time-shifted basis; only 30 percent watched it live.
The good news is that’s improved to about 50 percent watching it live and 50 percent recording it to watch later. What’s amazing to me is that half the audience basically refuses to watch the show on the network’s terms. Given the technology, consumers are telling television insiders exactly what they want and how/when they want to watch it.
That’s not to say the networks are responding like champions. But I have to say, subjectively, that bumping even a couple reality shows in favor of a talk-entertainment show like Leno’s is a step in the right direction. And maybe that’s what the audience is responding to; perhaps the reduction in time-shifting basically means, “If you give me something worth watching it, I’m more likely to watch it when you air it.”
With a blog that’s so heavily dominated by print-to-internet trends, why do I think this is worth noting?
Because it points out a huge difference between what’s happening in print media vs. broadcast. Both are struggling to keep up with the change brought on by online technologies, they’re being impacted from opposite directions.
TV is losing its audience to other activities, and has had to fight and innovate to earn every viewer that it gets. Then it can turn around and sell its successes to advertisers. This is a healthy business model.
Print media, on the other hand, isn’t being pushed by its readers – who have largely made it clear that they prefer a print product. Otherwise, readers might pay for online content; and they would certainly ask for digital editions of their favorite magazines. And if that were the case, there wouldn’t be a problem. Readers would get the product they want, advertisers would know exactly how many people see and respond to their ads, and publishers would be able to cut the Three P’s that represent the largest cost of doing business: production, printing and postage.
The problem for print is that it’s being pushed by the other end: the advertisers, who demand better accountability for the impact of the money they spend. Because you can’t measure the impact of print media as simply or directly as online media, advertisers are draining their print spend in favor of an online spend. So magazines keep trying to come up with online products, and readers are yawning.
In the end, the trouble for print is that it’s not yet figured out how to give both the audience and advertisers what they want. And it’s responding to the advertisers first. And each time, readers yawn and the medium loses more credibility with advertisers.
That’s not a healthy business model.
Well, yes. If you have bad content then it doesn’t matter how many people come to see it. Consider this visual from Mark Smiciklas.
Wait, it’s worse than that. If you have bad content, then the more people who see it, the worse off you are. Because now you’re simply broadcasting the fact that you suck.
I would argue you’re better off with great content that only a few people see — because at least those few people will have good things to say about you.
About 10 years ago, I was involved in a magazine that was all about business-to-business commerce. Our readers were intently trying to build e-commerce platforms that would increase the velocity of their business; our advertisers were trying to sell them 7-figure solutions to do so. But the discipline was in its frontier days, and much of what they were doing was first-generation inadequate.
The problem wasn’t that the e-commerce systems failed. It’s that everything else was built for a slower world. Warehouses weren’t organized well enough to handle the high-speed demands of e-commerce. Inventory wasn’t well-enough planned to keep fast-moving items in stock. Shipping contracts didn’t include the kind of pick-up and delivery guarantees that e-commerce requires.
Companies could take the orders with lightning speed, but then the old, slow processes took over.
Which resulted in what became known (at least in my own head) as Rosenbaum’s Law: Enabling e-commerce at a company with bad processes merely makes those bad processes apparent at a much higher speed to a much larger number of people.
The point: Make sure you have something intelligent and/or compelling to say.
Then communicate it.
Then — and only then — promote the heck out of it.
In his blog, Reflections of a Newsosaur, Alan Mutter — a Silicon Valley CEO and a former newspaper reporter, columnist and executive — says nearly half of newspaper publishers don’t believe they can succeed at charging consumers for content.
I think Mutter sounds like a smart guy, and his blog is great; just having stumbled across it I’ve put it on my blogroll. However, what he sees as the glass half-empty looks to me like it’s half-full. I’m pleased and impressed that just over half of newspaper publishers think they can charge for content.
As Seth Godin, another of my blogroll favorites, says: Success is mostly about your attitude. Which means the newspaper business is half-way home to figuring out how and why people are going to pay for their content. I’m not saying it’s an easy task, or that the tradeoff in revenue — advertising and classified for reader payments — is a neat-and-clean one-to-one swap. (It really doesn’t have to be; online content doesn’t come with huge printing and distribution costst, but that’s a digression). Like I said, I’m pleased to hear that half of the U.S. newspaper industry is giving itself a fighting chance at success.
As for the rest of Mutter’s blog, he’s smarter than I am, so you should just take a look at his more detailed analysis, and at the report that directed me to his blog in the first place.
http://www.mediabuyerplanner.com/entry/45119/half-of-newspaper-publishers-believe-online-pay-walls-will-work/?utm_source=mbp&utm_medium=email&utm_content=textlink&utm_campaign=newsletter