Business of Media

Stephanie Clifford does it again for me in this article about Conde Nast's Lucky Magazine's new iPhone application, "Lucky at Your Service." The application allows users to view over 70 shoes featured in Lucky's March shoe guide (note: many of the shoes are from their advertisers) by style, color, designers, etc. Through a GPS system or zip code, the application will let you know where you can pick up your coveted Jimmy Choos. Lucky is not collecting fees for the service and even has a call center to confirm where your shoes are waiting for you.

Clifford and several bloggers noted that this may be a good move for the magazine, whose sister publication Domino folded earlier this week. Embarrassingly, this is the first time I actually realized that Lucky is more of a catalog than an actual magazine with articles. As Clifford points out, this move may be Lucky's attempt to hold onto advertiser's confidence as the application brings them readers more directly. I also think it eases the transition to the digital format if the magazine wants to generate more online traffic. The application itself is a great platform particularly for this catalog-magazine, which can revamp the inventory every month per say, and perhaps features clothes or other products in the current issue and of course, eventually put a price to the application.

Women's Wear Daily (WWD) reported that the January issue of O, The Oprah Magazine, released during the media frenzy over her weight gain, was the best-selling issue in three years for the company with sales over 1.1 million in January. The issue featured the "Best Life Week," a new year's guide to improving health, finance and relationships. WWD reports that Winfrey utilized nearly all of her media platforms and partners to promote "Best Life Week." Oprah.com, her satellite radio show and of course, her own television show where she divulged her own weight struggle story, were outlets to generate media buzz before the issue came out.

What was interesting about this article was not Oprah's weight-gain revelations but the use of synergy among her different platforms, even more powerful as these outlets are centered around only one brand: Oprah (unlike Time Warner, that deals with different brands from Cartoon Network to Showtime). Winfrey's viral technique was strikingly similar to what I keep hearing about Disney. Are magazines under such multi-platform corporations like Harpo in better hands than other magazines, say at Conde Nast, that mostly own other magazines instead of television/radio stations? This must be a big boost for the Hearst Corporation, which owns the magazine with Harpo.

FOLIOmag.com features breaking news that two major magazine wholesalers, Anderson News and Source Interlink, have ceased operations after bickering for two weeks with magazine publishers and distributors over their proposed 7-cent increase per copy starting February 1. The two companies were unable to be reached to confirm the story. Nevertheless, the two companies combined represent nearly 50% of the magazine market. If FOLIOmag.com's article is correct, a messy transition will result and weekly and regional magazines dependent on such distribution will likely suffer. John Loughlin, executive vice president and general manager at Hearst magazines said,

I guess I'm glad I'm not publishing weeklies.

This article goes hand in hand with the latest news of Page Six, the weekly New York Post fashion insert, of going quarterly. One of the first companies to protest the price hike is Time Inc, which owns popular weekly magazine People. As I've been learning in the fundamentals of marketing and the business of media, distribution is often mistakenly overlooked, as it accounts for the popularity and consumption of the product as much as the product itself. Being the indecisive person I still am, do you think wholesalers are actually making the problem worse? Or do they have no choice but to implement the price hike before they get eliminated? There were no reports indicating a sort of conference or meeting with magazines to discuss this, so hopefully a compromise isn't too much to hope for. Stay posted for an update!

The New York Times reported that Newsweek plans to revamp its business model and image. The weekly magazine plans to stop attaching itself to the week's biggest events and will pursue "an opinionated, prescriptive or offbeat take on events." Along with content on heavier stock paper and less cluttered layouts, Newsweek also plans to make its target audience a smaller, but more affluent readership that will come through in paying more for subscriptions. Thus, the magazine's "rate base" or expected circulation promised to advertisers, will be lowered along with their efforts to reach out to a mass audience, which "doesn't work anymore." With this model, Newsweek hopes that more luxury ads will grace its cleaner-cut pages.

As I follow along in this class and "The Culture Industries" with Mark Crispin Miller, I couldn't help but feel that Newsweek's decision was driven and centered on pleasing their advertisers, which the article makes apparent. But aside from that obvious revelation, I also found it interesting how this approach from a newsweekly seems to be going against the grain of what we've come to expect of the 24-hour news cycle: the constant race for updates, even if no significant developments have occurred. As editor Jon Meacham said,

The drill of chasing the week’s news to add a couple of hard-fought new details is not sustainable.

In relation to the previous post, AdvertisingAge gives a few tips on how their beloved clients can save their industry some money. The article cites how magazines have already reported their issue sales more quickly and have been relaying their rate base by issue instead of a "longer-term average." The first tip offered is to extend ad-sale deadlines, which Men's Journal has already done (extension: three weeks).

'Do I think we're going to double our ads?' Mr. Armstrong said. 'No. But if we can get an extra five or six ads an issue, that would be five or six advertisers that would be very happy...It's not like advertisers don't want to run in the monthly magazines,' he added. 'They just can't get their budget approved, their creative approved in time.'

A tribute to one of the few regional magazines I read. Nothing can compare to New York Magazine, though.

Though written a month and a half ago, FOLIOMag.com still features this article on its home page featuring several reasons why regional magazines can stay afloat during the economic downturn. As featured in Vogel, regional magazines can take advantage of "a low barrier to entry," as several magazines kept launching print editions last year. According to Michael Carr, president of Las Vegas-based regional publisher Greenspun Media, regional magazines offer a comfort that can't be replicated in national magazines:

When times are challenging, readers want to know what’s important to them within five miles of their front door. That’s where regional magazines, which are closer to the markets they serve, make a difference.

-Regional advertisers aren't as affected by the same advertising issues of nationals, unless they serve "super niche markets," like real estate or banking.
-Regionals are still attractive to many local busineses.
-Likewise, national advertisers are still attracted to regional mags, as local branding can be surprisingly profitable.

This isn't to say regionals are taking the cake right now--the article mentions several layoffs and struggles. However, I'm glad that my assumption that regionals were going to all die has been disputed. As mentioned in class, localization in a business model is necessary and isn't going anywhere. But Carr offers a succinct, albeit disappointing, way of concluding the thread of the past three posts--the inescapable need to service advertisers:

The people who understand that they serve the market and the market does not serve them, will do well.

Conde Nast hopes to shift the appeal of glossy print ads to the Internet with the new "Dashboard" campaign by Mercedes Benz. Today, 18 Conde Nast Digital sites such as Details and Vogue will be graced with banner ads promoting the launch of the Mercedes GLK SUV, a new product category for the luxury car company. However, rolling over the ad's speedometer doesn't conjure a sketchy website but a package of "lifestyle content":

When users roll over them, they expand to become a rich-media environment that integrates Conde Nast magazine and web content, along with branded video from Mercedes-Benz.

What's interesting about this "lifestyle campaign," as writer Michael Learmonth points out, is that money or conversion isn't the blatant focus of the campaign but a test to see how much time readers will spend reading the Conde Nast content within the Mercedes environment. The partnership may be a preview of new and improved digital advertising that takes advantage of the Internet's feature of interactivity.

Though print may not be doing well, some magazine brands and categories performed well in 2008 according to research by comScore. The following are noted trends that can be inferred from this chart:

-The growth of women’s and family service content still piques consumer interest.
-Several "winners" on the list, such as Glam Media and NetShelter Technology reveal the successes of the emerging generation of vertical media and ad networks (Glam collects blogs and sites together for a online beauty network/forum/resource).
-Companies that "acquired, aggregated and partnered up for traffic" had the most gains, making it easier to catch the attention of a fragmenting audience online.
-Ventures with video sites or video content excelled as the number of videos viewed per week went from 68.6 in 2007 to 86.8 in 2008 and "long-form" viewing became more common place, such as watching TV episodes on hulu.com

In regards to the previous post about the venture between Conde Nast and Mercedes Benz, this article also claims that a key trend in 2009 would be "magazine branded media online." Similar to what I expressed earlier, the article claims this trend would emerge due to advertisers' desires to clean up ads and present viewers with more attractive and less cluttered layouts. I totally agree with this move; online ads and banners are extremely annoying and have no credibility. I have never heard of any one clicking on one that piqued their curiosity. In fact, the only time I click on one is by accident, followed by me frantically closing the window for fear of spam or incessant pop-ups. Just when I thought the Internet was the best it could possibly be compared to other media, I am excited to see how these advertising mergers will help "clean up" the web and actually be more effective.

New York Magazine and Magnify.net are partnering to create a customized, "Web 2.0" video service for nymag.com around April 2009. The service will allow publishers to integrate their own videos and will bring in related videos from around the web, creating a library of easy-to-find videos while cutting production costs. NYMag is honing in on the concept of such "curated videos," as seen on Reader's Digest's Taste of Home. Participating publishers are expected to pay under $10 per thousand pages. The articles expresses how the partnership seeks to please not only viewers, but of course, advertisers:

'Ad agencies we’ve spoken with say, "We don’t want to advertise on the same page as unreviewed user generated content," ' Magnify.net CEO Steven Rosenbaum said. 'But with curated video content, they are generally more comfortable doing so.'

I suppose the common thread in this post and the previous two is the shift from magazines listening to advertisers to both sectors listening to consumers. Not only do both sectors have plans to use the Internet's features to their advantage, but may, in the long run, be improving Internet surfing altogether. As much as I love New York Magazine, nymag.com's homepage is extremely overwhelming for a devoted reader who wants to soak in everything. So whether the appeal of such new videos and advertising may be because of its improved design/layout or better surfing experience altogether, I can at least be assured that my money is finally being put to a good use.

Last week, the Magazine Publishers of American lost two more members due to "tough business conditions": New York magazine (bemoaned, as NYMag is one of the top 50 magazines by revenue) and American Media (publisher of Star and Shape). The drop outs follow the first major blow to the MPA: the loss of Hachette Filipacchi. Hachette's CEO Jack Kliger criticized the MPA for letting other organizations avoid fees. Interestingly, the article stated, "Neither the association nor its members disclose each company's dues, which are based on circulation and ad revenue." On a similar note, the Outdoor Advertising Association of America canceled their national trade show/convention; CEO Nancy Fletcher stated,

"Many of you are struggling and making difficult decisions related to your businesses," she said. "A common theme we heard in our calls: Now is the time to stay home and take care of our customers and employees."

What impact does a publisher's membership in industry associations such as the MPA have on its business model? If anything, the article pointed out how the MPA and ASME (American Society of Magazine Editors) grant publishers various awards and titles, perhaps boosting their brand in the public eye. According to the MPA's mission, the association also encourages "editorial excellence" and "champions" the rights of editors before Congress. If this is the case, can such sacrifices been decreasing employee morale, thereby decreasing the efficiency of the company? Of course, we can't forget that the business of media is not just dependent on numbers, but on healthy employee conditions.

MediaWeek.com published a fascinating article about Rodale's plans for "brand extensions" in 2009. However, Rodale CEO Steve Murphy explained,

"we’re just as excited about coming up with new products [for] advertisers … to advertise in new ways.”

Will such brand extensions be permanent fixtures in the magazine business model if or when the economy returns to health? They may, as media becomes more interactive and the lines blur among different media sectors/platforms.

Playboy Enterprises claimed it would be open to "sell the company or change the direction of its flagship magazine" but was not looking to sell the magazine by itself. This comes after news of the company's declines in revenue, publishing, shares, etc. Seen as a "strategy shift," the article claimed many investors were actually surprised. Though a Hefner no longer runs the company, the largest shareholder, Hugh Hefner, probably would not succumb to such a change. Jonathan Boyar, a principal at Boyar Asset Management in New York, which owns Playboy stock, stated,

“Playboy is among the world’s most recognizable brand names, and the ubiquitous Playboy bunny logo is probably as well-known as the Nike swoosh,” he said. “But unfortunately, for shareholders, that’s probably where it ends.”