The (Dubious) Bull Case for Magazines
by Peter Kafka
Posted on January 26, 2009 at 7:13 AM PT
Want a break from gloom and doom about the state of the magazine industry? The industry’s trade association is happy to help. Or at least, to try to help.
This morning Nina Link, the CEO of Magazine Publishers of America, presented a state-of-the-industry talk for a conference call hosted by J.P. Morgan, as part of its “virtual advertising & marketing summit.”
Don’t worry if you missed it–the accompanying slides, which I’ve embedded below, do a good job of summing up Link’s presentation. And I can do the same in a couple sentences: Things aren’t great, but they could be worse. And they’ve got to get better: People like magazines!
I actually agree with part of Link’s thesis: People do like magazines, and will continue to do so. In fact, the more time I spend creating and consuming online content, the more value I see in print titles. They’re a refreshing break from the relentless crush of the Web, which tends to make really good stuff read and feel just the same as really bad stuff.
Also, as my old employer and current Forbes Media investor, Roger McNamee, likes to point out, you can read magazines on the toilet.
But none of that changes the real problem magazines face, which isn’t going away: Publishers rely on advertising for most of their revenue, and advertisers are increasingly moving their money to the Web.
And almost none of the publishers have figured out how what to do about that–Time Warner’s (TWX) Time Inc., which has been perhaps the most aggressive about getting on the Internet, gets only 10 percent of its revenue from the Web.
Surely more will follow suit, but when they do, they’ll face a new problem: The clichéd-but-true “analog dollars for digital pennies” phenomenon, which means that the same content becomes much less valuable once you move it from print to the Web.
But you’ve heard plenty about that and will continue to hear about it going forward, and I promised you the bull case. So here you go. Click on “full screen” button to make this pitch legible and right arrow button to page through the presentation.
MPA presentation – Free Legal Forms
[Image Credit: dickuhne]
Comments
As a web reader and as a magazine reader, I don’t understand the rush by advertisers to abandon print in favor of the web.
Print has better image quality.
Posted by Dave Barnes at January 26th, 2009 at 8:34 amPrint has larger images.
Print ads can not be avoided whereas I never see any online ads thanks to AdBlock Plus and Firefox.
Print ads can contain a lot more information.
The good (sort of) news: Lots of advertisers are still taking out ads in magazines, Dave. Some of them may be doing it for the reasons you list above, though I imagine most are doing it because they know how to do it.
Posted by Peter Kafka at January 26th, 2009 at 10:00 amPrint is better. Especially since online mags really just provide short and rehashed versions of the weekly happenings you’ve already seen on TV or every other website.
But especially in this economy the audience will drift towards digital because they can afford it (its mostly free) and the same with advertisers, since it is cheaper for them and the masses are drifting towards the web anyway.
Print mags will probably rebound with the economy. They just wont have the masses they once did and will be more of a targeted play, but still more valuable due to its quality and the fact that advertisers are reaching customers that are paying for the content. And as we know, advertisers always find consumers who already paying for something more valuable than those who are not.
Posted by Nokware Knight at January 26th, 2009 at 11:29 am