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Summary:

I wrote the short essay below for a report we co-authored with min called “The State of Digital Media,” focusing on the magazine industry’s…

I wrote the short essay below for a report we co-authored with min called “The State of Digital Media,” focusing on the magazine industry’s digital moves. Slightly naive now that I read it after six months, but I still strongly believe that “magazines are about communities of interest.”

“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity…” — Charles Dickens, A Tale of Two Cities

For the magazine industry, online is finally coming into its own, as the companies understand to creatively mix the print and native-Web content, and as online advertising has roared back, helping the revenue side move from being just a rounding error in overall revenues. The buzz about magazine launches (and stories within magazines) has never been higher, amplified by the ever hungry blog-machinery, RSS feeds, widgets etc, looking for things to feed off. This is certainly true for certain subsections of celebrity and lifestyle magazines.

But, at the same time, some inexorable trends against the magazine industry continue. If magazines cater to a niche, other online competitors are in super-niches, continually cutting into online readership. Competition comes both from big portals like Yahoo and AOL, and on the other hand, from bloggers specializing in a specific subject. Online advertising is still primarily low value, and not enough to replace the economics of print advertising, at least not in conventionally measurable ways. Also, magazines brands work in silos within a company, and across mediums, when more nimble online companies are blurring the lines constantly, much to the delight of their advertisers.

Meanwhile, a growing issue is a shortage of talent for online, both on the business as well as the editorial side. Ad sales people who have experience selling online and can think natively in the medium are hard to find, as Google and others gobble up every sales talent in sight with, among other benefits, bigger salaries and stock options. The same is true for product and brand talent. On the editorial side, journalistic talent is harder to develop and hone, both on the junior side, as well as more experienced side, where journalists have to balance learning new skills and unlearning older skills to adapt to the online medium.

And while all of these are the longer-term trends, some short-and-medium-term trends bring in a lot of hope and advantage for the magazine industry. Developing extra and daily content online has never been cheaper and faster, with the tools becoming cheaper and easier. Magazines by definition have a loyal community, and with social media tools and services proliferating, they have a chance to experiment and expand on the communities like never before. You’ll see more and more magazines become stewards of communities of interest in the coming years — and the hybrid jobs as well as business models that come out of it.

Developing bigger audiences online also means investing, both in organic growth as well as through M&A. The activity in the M&A market has never been hotter. Some of the representative deals in the online magazine space are buying out other niche community and content sites to get bigger audience quickly. Of course, that means more inventory to sell advertising against. The deals volume will continue to rise over the next year or so, driven by online advertising and excess cheap money to finance the deals. (One change since this was written: investment money isn’t as cheap.)

At the end of the day, magazines are about communities of interest, whether professional or lifestyle driven. If magazines keep that driving mantra in mind, and use the Web for all its is worth, things could begin to look brighter and bigger on the monetary side soon.

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  1. Finally! Someone who gets it! Thank you for the great article. I read the entire history of mass media recently and it seems you're the first to get it that this is not a time of dire straights but of branching out to more fully HELP consumers with the passion they have. H E L L O! Thank you!

  2. I totally agree on your conclusions, and most executives in magazine publishing already understand that their magazines' readers are communities of interest. Then why do online initiatives of most magazine publishers not take off as they should? I think because many magazine publishers still do not understand that online publishing is something completely different than offline publishing. They are separate businesses with their own dynamics in content and advertising and they should be organized as such. Maybe the biggest obstacle for magazine publishers is that their business is still doing too well, and they are not hurt by online business enough. That's a shame, because it is not about the end of magazines, it is about the opportunities online.

  3. Arno, I totally agree. As someone who has worked in the trenches of many traditional publishing houses in NYC, I am constantly amazed by the basic lack of understanding re online publishing on the part of key stakeholders. For many, their content strategy begins and ends with shovelware.

  4. Arno…excellent point. Most traditional publishers still try to fit their online opportunities into their traditional publishing strategies. In many cases, publishers launch online initiatives to solve advertising problems, not to create valuable information to solve user challenges.

  5. I am squarely in that amen corner. I have had to create my own clues to building capacity and giving visitors what they really want in web 2.0. I am so grassroots my invoice payments stagger in like a drunken sailor. Between diving into my home equity dollars, the generosity of friends who believe in what I am doing and the aforementioned slow-pay invoices, I am growing and intend soon to be soaring. Going the grassroots way is hard but, so far that has been a good thing. It has made me hellaciously (sp?) creative and I can move fast – unlike the mag executives who have so many layers of approval before they get a green light on an idea.
    I create original content for my target audience in my sleep and lately – finally -met a savvy, daring young person willing to be my co-conspirator in redoing my site into the slammin' social community my audience has been asking for – not in name – but in need. Of course, I'm certainly not about to turn down any capital that comes my way but doing it this hard, organic way has made me an expert in ways I could not have become if it were too easy and in ways that elude big pubs. As I build capacity and traction in my print and web publication I thrill at its potential. If I do my part right in the near future you will be hearing about me – favorably. I think. Sorry 'bout the blabbing. Just excited to see your comments and this article.

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