New Year, New Challenges

Folio: The Magazine for Magazine Management, Jan, 2001 by Jennifer F. Steil

The dot-com crash, extraordinary advertising growth, continued consolidation at the newsstand, major M&A activity--the year 2000 proved eventful. FOLIO: asks four publishing executives what they see as the biggest alteration in the magazine publishing landscape over the past year, and how it will play out in 2001.

Jim McCabe

Publisher, Worth

What we've seen is a recommitment from a number of advertisers to the idea of the print advertising campaign. As there has been a bit of a shakeout in the Internet world, advertisers are making a recommitment to magazines, understanding that magazines are truly an efficient way to reach their target audiences. As publisher of a magazine targeted to upscale consumers, we think a lot of advertisers have found that they need the magazine to make the emotional connection between their products and the magazine reader. We are seeing major recommitments from the financial field, automotive and even consumer to the idea of using a magazine to further your brand's image. So we see very positive signs for 2001. We think that--for us, at least--there is going to be an increase in advertising in 2001 from a number of different categories.

Mark Druskoff

Managing editor, Minnesota Business Magazine

The most significant change did not take place in publishing at all, but in the stock market. The crash of tech stocks, while it may have killed our personal portfolios, has finally given publishers some breathing room related to their Internet initiatives. Everyone has been saying that it can't last forever--but meanwhile, there was the prevalent fear that some hot dot-com might come out of nowhere and smote you out of existence. That threat is now much reduced--after all, where are they going to get the funding? Plus, publishers can feel a little less insecure knowing that we're not the only ones who can't make money from the Web.

Having said that, I think the tech-stock nosedive proved what many publishers have known all along--that business does not prosper by bits alone. A "bricks-and-clicks" strategy is the strongest. Our business mode has been proved correct. Now the onus is on publishers to come up with schemes that integrate print and electronic media into packages that actually work.

Julie Bradford

Editor, All About Beer

The biggest and most frightening change in the magazine industry continues to be the ongoing consolidation in distribution, and dramatic increases in distribution expenses. Big retail outlets displace local newsstands, and they are serviced by huge wholesalers. Big titles benefit, but little publishers are squeezed out of the market. These massive wholesale chains, driven by bottom-line performance accounting, have consistently pushed small titles off newsstands. Not a day goes by that we aren't confronted with another demand for additional margin or fees to hold onto our dwindiing shelf space.

The sad part is when you hear from former newsstand buyers who can no longer find the title anywhere in their community. When this all began, we bad hoped the big publishers would fight the perception that our magazines can be just given away to wholesale and retail.

Dan Lagani

But that wasn't the case. A very few companies are seeing this as an opportunity to create a revolution in distribution channels, but there's plenty of room for new ideas. If I'm being optimistic, I hope that some entrepreneur sees a great business opportunity to specialize in the distribution of smaller magazines like ours.

Vice president/publisher, George

There have been two fundamental changes in the advertising community in the past year. The first is that advertisers are placing an increasing value on the quality of a magazine's circulation-- both in terms of its vitality as measured by growth, and in terms of a reader's willingness to pay more. George has had both this year.

The second, which I've seen in the past couple of months, is interest on the part of advertisers in the primary research being produced by magazines. It appears that 2001 will be an even more competitive year for advertising. So magazines that are able both to demonstrate the quality of their circulation and to differentiate their readers by providing proprietary insights through research-- those magazines stand a better chance of continuing to be successful.