My reaction was visceral because the decline of print has been brutal for many friends and colleagues at Time Inc., Hearst, Conde and other magazine publishers. The print free fall seemed personal, viscous, unrelenting …. and obvious. How could anyone believe otherwise as thousands were laid off and publishers were going bankrupt left and right or being sold for pennies (TV Guide, BusinessWeek)?

But the rational side of me wondered if there was some way to quantify the decline of print publishing as an industry beyond the obvious short-term drop in ad pages and ad revenue. I still don’t know the best way to do that. But I did come across this report by UBS Gobal Media Team titled “Announcing the 2010 Advertising Recovery.”

You can read the whole report for yoursleves. Their key takeaway is that:

we believe two-thirds of the recent decline was cyclical in nature and will be recouped over the next three years.

That is an interesting point of view — one they back up with pages of analysis. My own point of view is that for all the quantitative projections they are based on historical trends that may not hold up (sort of like those collateralized debt obligations). With Facebook on pace to close in on 500 million users by the end of 2010 (that’s half of the entire 1 billion internet users on the planet) and social media sites now a more popular online habit than adult content, all bets are off on consumer media consuption behavior.

While UBS sees advertising coming back with 3.9% ad-spend  growth for 2010 and 6.9% growth for 2011, they also say this for 2013 and beyond:

As we had concerns about 2009 back in 2006, we are extremely sensitive to renewed pressure after 2013. By then, the amount of available advertising inventories (“impression”) would have expanded exponentially on online and digital media and could put tremendous pricing pressure on all platforms. Over the next three-year lull, we believe media companies should further trim their cost structure while revisiting their business models, including distribution and monetization.

I also found this interesting: think of Media Companies as have these revenue streams:

• Advertising. We include television, radio broadcasting, cable, print, outdoor, Internet (including search), and most of the yellow pages.
• Consumer discretionary spending. We include, among others, box office, DVD sales, PPV, VOD, video games, music, online downloads, newsstand print circulation, amusement parks, books, ancillary revenues (toys, branded products), and retail stores.
• Consumer recurrent spending. We include cable operators, video and audio satellite video, broadband, voice, online Internet gaming, print subscription, and book clubs.
• Corporate spending. We include market research (and most below-the-line advertising, as well as marketing services), programming sales (including cable networks affiliate fees), financial information, and professional publishing (B2B).

According to UBS, consumers are driving most of the media sector’s 625 billion in revenues, not advertising:

Consumer spending drives 48% of global media revenues. Advertising follows with only 30% and Corporate spending is last with 22%. That order is also true for Europe and the Americas.

So for all the wrangling about ad-rev decline it’s worth remember that it’s only 30% (if you trust the UBS numbers). It’s a sign of the times that thinking of ad-rev as being only 30% makes me feel better. At lease the report gave this debate some quantitative substance. Overall I think anyone with an ink-on-paper revenue model needs to work to digitize that revenue ASAP — no matter what the historical patterns suggest about ad-rev bounceback, I wouldn’t want to bet my future on it.

It started when David Carr (@carr2n), the NYT media columnist, wrote a Jan 1, 2009 piece (Why Twitter Will Endure http://ow.ly/SiHe ) that’s been widely embraced by Twitter fans for nailing some key aspects of the service’s popularity and growing role as a key part of the global information dissemination (i.e. news) system. To make it more interesting, the Carr column became part of a food fight that erupted this morning (Jan 3, 2009) as NYU Journalism Professor @jayrosen_nyu compared Carr’s savvy take on Twitter with this quote from Brian Williams of NBC Nightly News from a recent Time interview:

“Our team has used Twitter on occasion. I see it as kind of a time suck that I don’t need any more of. Just too much “I got the most awesome new pair of sweatpants.” I’m going to go ahead and assume that people buy awesome sweatpants every day and that I don’t need to know them by name.” http://ow.ly/SiLV

Rosen Tweeted “Why is Brian Williams an airhead? Compare @carr2n‘s column on Twitter http://jr.ly/q46f to what Williams says about it http://jr.ly/rc3g .” To add fuel to the fire Brian Kurtz apparently referenced the dispute and using a (different but related) Rosen tweet on CNN. I didn’t see it, but Rosen posted this:

“Uh, this calls for an OMG. Kurtz on CNN just upbraided Brian Williams for his idiotic remark on Twitter by using my Tweet http://jr.ly/q487 “

Blogger and J-school prof Jeff Jarvis http://buzzmachine.com added this:

“Brian Williams sweatpants/Twitter crack is the half-decade-later equivalent of CNN Jon Klein’s pajamas/blog line.”

It’s a meta news food fight about Twitter taking place on Twitter.

Why All This Is Relevant

My take is that it’s part of the ongoing battle between media traditionalists (in print, broadcast, journalism) about how to “save journalism.” Since everyone knows that most of the revenue that pays journalist salaries is still tied to print advertising, there are two ways to go:(a) do everything you can to milk print revenue by gaining print ad and circ market share or (b) reduce print overhead by focusing on doing more with less and cutting down or eliminating print distribution costs to grow digital traffic and revenue to truly find equilibrium where digital revenue actually covers  digital news gathering and production (salaries and servers).

In 2010 we’ll know a lot more about which models will actually work. The major experiments have been set up as follows:

• Demand Media which reduced video segment production to $20 per piece — and only for topics it knew would get enough clicks to make $20+ in banner/ad revenue (this was profiled in a Wired article here http://www.wired.com/magazine/2009/10/ff_demandmedia/ )
• Huffingtonpost.com which has become the most likely candidate to make journalism (or at least news aggregation) profitable online (and therefore sustainable)
• The WSJ and Rupert Murdoch’s paper-based news empire seems to be positioning itself in defense of the traditional model by threatening to put up paywalls and block search engine indexing of their content
• The Apple tablet (and ereaders in general) combined with new forms of rich-media content navigation from Next Issue Media (the print consortium of Time Inc., Conde Nast, Hearst, News Corp and others) along with digital stores (iTunes and others).
• Steve Brill’s micropayment system — this is a hybrid model that allows X percent of content to be free and then enables easy 1-click micropayment to see the rest.

My personal guess is that some form of 1-click micropayment for premium add-on content/tools (Zagat-like) or a subscription to a basket of content from consortiums will emerge. There won’t be one knock-out model as some high-traffic sites will likely achieve profitability as fully ad-supported operations. But that was just the business side.

Jouralism Itslef Is Being Atomized and Reaggregated

We are in a period of incredible disruption to media models. Print (if you include inscriptions on clay and reed) goes back to the fertile crecsent of Mesopotamia. Mass-produced print could be pegged to the 1500s and Guttenberg. Content was tied to a medium and there was always a “content value” and “medium value” (the ability to physically possess and own i.e. “take” that content with you via bound paper) that were interlinked. Did the money you paid for a book or newspaper go for the content or the physical creation and delivery (either to store, newsstand, doormat or mailbox)? It never really mattered to the buyer how the internal split was divided as long as the aggregate product satisfied. To be sure, most newspaper buyers thought they were buying content — who really cares about what type of newsprint their newspaper came on. But you did care a bit more if the paper was sold out or late to your door (distribution).

And you really care if all of a sudden the newspaper in your city says they can’t afford to put out a print product at all. Because, truth be told, you like to at least glance at the headlines on the newsstand even if you don’t always like or buy every paper. And you probably felt a bit safer knowing some hack was paid to sit around city hall or the police headquarters to keep an eye on things. And that leads to another interlinking — media companies that could cover overhead (rent, IT, satellite feeds, servers) via both news and entertainment operations. Even the NYT could get some extra cash from fashion coverage and classified ads. So pure “hard news” content never had to fully pull its own weight. Until now. Now news can be created and consumed without being physically distributed. Legacy owners of multi-million dollar print plants and truck fleets are stuck with huge costs and no way to levy a toll as news flows from journalist to reader. To make matters even worse, not only is news “product” untetherred from physical substrate and courier, news creation has become open to all.

We are in the UGC era. News is now dis-aggregated. The atomic news unit is a everyone and anyone with a phone that can call in, record and post breaking news. It’s likely that random “self-deputized” news reporters from any breaking site will now always provide the first images and reports we consume. As stories unfold, insiders with access to key sources will share information from overheard chatter or leak incriminating documents from sources with whistleblower pride or scores to settle.

And that brings me back to Twitter. As we saw with the story of James Karl Buck, a one-word tweet (“arrested”) when in Egypt was enough to help get him released http://www.cnn.com/2008/TECH/04/25/twitter.buck/ . From Iran to the tweets about the TSA rules after the Christmas bombing attempt, one tweet (especially if liked to documents, images etc.) is enough to blow a story wide open. And for legacy journalists (who actually tend to have the largest audience on Twitter) it may be that their followers are more bound to them and their individual feeds than the media companies that pay their salaries. And once a reporter has a huge audience, it’s likely information will flow both ways. Twitter will enable sources, links, facts and corrections to flow upstream to reporters creating crowdsourced stories.

Brave New World 

The interesting thing for me to watch will be how underlying news ecosystem and 500-year framework will adapt — i.e. legal protections for bloggers, attempts to pressue and go after anoymous sources, limits on fair use, libel issues, credentialing for access to events and breaking news sites, laws around paparazzi and public stalking/following. When everyone’s a journalist who decides the ground rules?

I’m starting to notice an uptick in social spam on LinkedIn and other social sites I use such as Folio’s mediaPRO (a Ning based community for publishing professionals with about 5,000 members). Twitter spam is also an issue but the “report as spam” feature has helped tremendously.

Social Spam Techniques

Social spammers seem to follow a similar formula. It begins with a highly attractive profile picture (see samples below) which stands out due to high production value (well shot and cropped) as well as using model-like headshots. From there the spam is:

• inserted directly into a friend request
• used to boost friend counts to be exploited later

Since I don’t follow up on dubious friend requests, I don’t really know how spammers leverage them downstream. The upfront spam typically has offers that relate to making money with Google or other affiliate programs. I have a feeling some may be out-and-out prostitution as the use of Craig’s List for that is well documented and social networks offer an even better marketing tool for that as well.

How to Combat Social Spam

This morning I pulled my email address from my LinkedIn name (a hack I used because I found that there were many times I saw people I knew but did not have their email handy and did not have a LinkedIn connection requirement such as group or job in common). But that openess is now making it too easy for social spammers to get through LinkedIn’s screens. I’ve gotten 3+ social spam requests on LinkedIn in the past month and even at that level it’s a time-sink and annoying. And while I know many have are leveraging Facebook by openly promoting and accepting all friend requests, I think I’ll pull back a little on that as well and use Fan Pages for business promotion instead (which is not the same as the highly-personal approach of building friends). Hopefully social platforms recognize the threat and build easy to use “report as spam” links into their systems as well as the algorithms and staff to make them effective.

Now don’t get me wrong, I love the magazine business. I worked at Time Inc. in the 90s, met my wife through colleagues there, started the Consumer Marketing softball team, led the bar crawls, worked until 8 pm so I could get my comped Chinese food and free town car home. But as much as I love it — I can’t pretend the end isn’t near.

And I can’t abide others pretending either.

So for all you print optimists (yes you Mr. Magazine, and you DigitalTonto), I’ve collected a list of reasons that print is not “bouncing back” and no amount of innovation, curation, new focus, design or editorial vision is going to change that. Print is dead and no one in their right mind should argue for any future other than getting the most out of its sloppy leftovers. The print decline may vary by niche, sector, scope. But no print publication will ever again be must read. There will be no more eight-figure circ titles or mass-market hits like Time, People or Reader’s Digest.

Here’s why:

• Plummeting market value. In 1998 TV Guide sold for $2 billion. Last year TV Guide sold for $1. In 2007 Primedia sold 70 magazines to Source Interlink for $1.3 billion and in April 2009 Source file for bankruptcy. BusinessWeek recently sold for just $5.9 million. Reader’s Digest went bankrupt and Gourmet, Cookie, and others closed altogether. Maxim might not be far behind. That is not just a little business cycle decline. That is the great sucking sound of systemic, underlying fundamentals being eviscerated. If anyone really thought ad revenue would bounce back, sellers could command higher valuations. They aren’t, because the smart money knows the gig is up.

• Plummeting ad revenue. It’s no surprise why print magazine market values are sinking. Print ad revenue’s have fallen off a cliff losing $1.8 billion in aggregate in from 2007 to 2008 and ad revenue was down over 21% for the first half of 2009 acording to the MPA.

• Circulation Plateau. One of the best indicators of print’s health as an industry is total aggregate print magazine circulation. This masks any anomalies at specific publishers, titles and sectors. Circulation peaked in 2000 at 378,918,978 and has NEVER reached that level and never will again. Even green shoots like higher circ at the Wall Street Journal is due to ABC rules changes. The Journal was able to start counting electronic circ in their overall circ figures — giving the impression of healthy circulation growth. But that growth is by and large not print growth, it’s digital growth. And all that doesn’t even get into “Natural Circ” levels which were exaggerated by sweeps, promotions, agents, discounting etc. In fact I doubt many pubs would see much of a circ rise even if they offered to mail their print editions to consumers for free. People … are … happier … doing … other … things ….

• Online media are expanding rapidly. Five years ago Facebook, Twitter and YouTube didn’t exist. Today YouTube is serving over a billion views per day, Facebook is adding half-a-million new users a day and Twitter became the largest single source of news on the Iranian election protests. Clearly consumers are sending a very strong signal about what THEY find value in. In addition to fulfilling consumer’s desire for information and connection (in many ways substituting for the role played by magazines previously) the growth of online, on-demand media is winning in a zero-sum game for consumer mind share.

• Time-less-ness. Loss of its share of advertising dollars is interesting, but what is really hurting magazine is share of consumer time. Because there really is a maximum amount of time in each day. It’s a finite resource. And the competitive set is an ever-expanding list of media and devices and sources that compete for our attention — mobile, PC games, TV games, mobile games, web, social media, chat, video chat, search, music, YouTube, TV, Cable, DVR, book and phone. There just isn’t time to read like there used to be.

• Timeliness. No news is good news. Unless you’re a consumer who actaully would like find out what happened without waiting six days. This is where social media really comes into play. For any given breaking story people have been discussing it for hours and days before print can chime in. For monthly service magazines timeliness is a little less of an issue but it still exists — the healthy spinach advice that seemed so great might be undercut by an ecoli outbreak, travel advice shredded by the latest terrorist threat, hotel fire or natural disaster. Even for service titles, consumers want the most current advice they can get.

• Social Bookmarking and Sharing. My mother still mails be articles she’s ripped and xeroxed and written little notes on like “I thought you might find this interesting.” I appreciate her effort. But I really rather just get a link. There is great satisfaction in handling everything I want to bookmark or share with friends with one click. It’s amazing how many times I read people whining about how online can’t compare “to the texture of real ink on paper.” Puh-leez. Yes, I agree ink on paper is nice. You can smell it, get the ink smudges all over your favorite sweater, give yourselves paper cuts and admire the publisher who sprang for the 80 lb stock. But every time someone makes the argument about how reading online can’t replicat the offline experience, I wonder how many others are thinking print can’t replicate Delicious or Save for Later or seeing a great article posted by a friend and then instantly being able to comment on it. There is incredible, deep value not just in the timeliness of online but in it’s very, uh, texture — the social web.

• Print is not ecofriendly. Now not every consumer really cares about sustainability. But I bet enough do that it’s a factor in print avoidance syndrome. Or perhaps they just tire of collecting and tying up all those piles of pubs for the couch each week they haven’t read. Either way, there is a shadow of doubt that now comes with print that didn’t exist before — in fact reading used to be a virture that made you feel connected, informed a better human. That’s still true, but it now comes with iceberg-melting guilt as a chaser.

• Mobile. Colin Crawford (@ccoc) makes this argument all the time. If print was in trouble before the iPhone, it’s really in trouble now. I probably should have mercy at this point, but what the heck, it’s too much fun. Do print defenders really think that if consumers can carry and read any issue of all their favorite print publications anywhere at any time (yes, even in the bathroom!) they would still rather lug around the print version — especially if that device costs less than one year of Sports Illustrated and can make phone calls, send SMS, take video, pictures, find a date, restaurant and the fastest route to the best movie in town. I think not.

It’s an insult to keep pretending print is anything but dead or dying. For the sake of all of us, let’s please just write the eulogy and move on.

• http://mediadecoder.blogs.nytimes.com/2009/10/19/times-says-it-will-cut-100-newsroom-jobs/
• http://www.mediaite.com/print/new-york-times-to-lose-100-editorial-staffers-by-years-end/

Many comments simply said the NYT should put up a paywall and start charging. But there were also many insightful comments about the newspaper and media industries. Here are the best:

1. 20. October 19, 2009 3:24 pm Link

   Buy a New York Times today, it cost me $9.50 on Sunday for a New York Times, likely printed in Seattle. Oh I read the paper on-line, but compared to holding it in my hand, well its the difference between being intimate with your mate or yourself. One is satisfying, deeply satisfying, the other gets the job done. Charging for the on-line version didn’t work when you did, and won’t work now. Want to study a great web-site that doesn’t charge, and who knows, might make money, check out the Huffington Post, maybe you could hire away a few of their big players to help out for awhile, I am certain Arianna wouldn’t mind.

   Lary Waldman

2. 33. October 19, 2009 3:29 pm Link

   as someone in the industry, albeit not at the Times, the issue at hand is not charge/ do not charge for online content. That is small incrimental gain compared to the core revenue stream – ad dollars. with advertising shrinking by anywhere from 25% – 40% over the past 2 years there is no sustainable measure except to cut jobs. Publishing models are set up so that, basically, subscriptions cover the cost of manufacturing, distrobution, raw materials while ad dollars pay salaries and allow for marketing. You see the same thing in broadcasting except it’s a hazier transition. Reality (i.e cheap) TV replacing the more traditional medium we grew up on.

   — Andy

3. 26. October 19, 2009 3:27 pm Link

   It is nice to see that some people would be happy to pay for access to the NYT online. however, most people understand that the NYT merely lifts a good chunk of its reporting from other news agencies anyway, and about 60-75% of the content in the Times is available for free somewhere else.

   The Times knows this too, which is why they do not charge. The Wall St. Journal model would be an improvement, giving the otherwise free stuff away, and only giving snippets of the self generated content at a price.

4. 11. October 19, 2009 3:19 pm Link

   I used to read the Economist online. Now it charges for content. I don’t read it. Pay-for-content online? That train has left the station. The Times and other newspapers saw the train wreck coming in the early ’90s and put their heads in the sand. Now they’re reaping the whirlwind. Eventually, advertisers will catch up with the fact that Times online readers are affluent consumers and pay accordingly. Until then, the paper will have to keep biting the bullet.

5. 14. October 19, 2009 3:21 pm Link

   Here’s my idea:

   I don’t want have to decide *before* I read an article whether I want to pay for it, I want to decide *after*. To that end, I propose the following micropayment system. If I want to get content from a consortium of providers (say, anything owned by The New York Times Company, or Time-Warner, or Seed Media Group, or a group of publishers that set up their own consortium), I set up an account, pay my $50/year, and get access. If I like a piece of content (article, podcast, interactive graphic, whatever), I click the “Tip the Author(s)” button, and a chunk of my $50, maybe 10 cents, gets redirected to the actual people creating the content I actually like (not just start to read). If I don’t use up my $50 for the year, it just gets split internally by the consortium. This way, readers have control over where the money goes and get to associate “paying money” with “feeling good about what they read”, providers get cash, and the best providers get the most cash.

6. 46. October 19, 2009 3:35 pm Link

   Yo.

   NY Times peeps. What up.

   If you really need the money that badly why not ask for it? I’ve been visiting this site for months and I would pay a small fee per month. Even better, why not specialty content? I’m sure some people only come here to read certain types of stories. They’re intensely loyal and would pay for a certain type of coverage, but they don’t care about the rest. Break up the site into sections and charge for the specialty content. The key is you got to have somethin’ that can’t be replaced. Dig?

7. 60. October 19, 2009 3:43 pm Link

   The Times has already experimented with charging for some of its content. It didn’t work very well and the effort was stopped. Generally speaking, most people don’t want to pay for online news content. If the Times starts, then the Washington Post will have a strong advantage, along with the WS Journal and other papers that are free.

   — Ken Sternberg

8. 72. October 19, 2009 3:51 pm Link

   Unfortunately, what all of the well-meaning folks who are willing to pay for their news on line fail to realize, is that readers and subscribers have NEVER paid for news. Advertisers paid for news. No newspaper (even The Times) can charge enough on line to support more than a a fraction of its news gathering costs.

   Most journalists (and most Times readers) have traditionally measured success by circulation, number of Pulitzers won, etc. Unfortunately, the market has dictated that those yardsticks were only valuable when they could be converted into ad dollars. Sorry, but it’s those “intrusive ads” that are the lifeblood of any news gathering organization, not the high minded ideals of readers and journalists.

   That said, I too hope that the folks who are affected land on their feet.

   — steve o

9. 94. October 19, 2009 4:02 pm Link

   To the person who said “very few” people paid for TimesSelecte a few years ago. The number who did was 227,000. Is that “very few?”
   That was also just to access the paper’s columnists, for the most part. More people would pay if all the news was put behind a pay wall too, not just columnists.

   — Andy

10. — MotherLodeBeth
11. 104. October 19, 2009 4:08 pm Link

    Ok. In reading the first few comments, people don’t seem to realize how papers work.

    Subscribers, at 75 cents a day or a dollar a day or whatever a paper costs are not what pays any particular newspapers’ salaries for its employees. At most, your subscription may cover at least some of the cost for delivering the paper to your door, or the newstand.

    Everybody on board with that concept?

    The reason newpapers are cutting costs is because

    1.) Advertisers are paying less because subscriptions are down. But, if they are down due to lack of paper subscriptions, remember, NYTimes does charge their advertisers for advertising within the on-line content. Even though you’re reading it “free”, it’s sontent’s production cost, etc. is covered by advertising just as in the the paper format.

    2.) It isn’t just that some advertisers are paying a little less for the same degree of advertising, it’s that scores of companies aren’t advertising at all.

    Charging $19.99 a month for on-line access isn’t going to suplant the void of tens of millions of dollars woth of ad revenue that was lost.

    So all of the rooster-crowing about not charging for on-line content needs to stop. Sure, it would help, and I’m not against it, but fixating on that, as outsiders, who know nothing about the newspaper industry, misses the point. Our economy has sunk. Hundreds of businesses which used to advertise went under, and those remaining, aren’t advertising as much and some barely at all.

    Raising subscription prices and charging for on-line content can’t reverse a devestated business ecomonmy the likes of which haven’t been seen since the depression.

    Thanks and kind regards,

    -Rob Jenkins

    — Rob Jenkins

12. 109. October 19, 2009 4:12 pm Link

    I’m still getting the dead tree version delivered to my door every day, largely because I want to still be paying my share to keep the NYT alive. At the least, you should do the NPR model of encouraging users to pay for accessing your website or using your great iPhone app.

    Perhaps you could offer special perks to people who pay? One idea would be making feature articles and op-ed columns available to subscribers earlier than to the general public?

    — Rich, NYC

13. — James
    135. October 19, 2009 4:30 pm Link

    nytimes is the 27th most visited website in the US, 105th in the world. I use it so much, I feel like I’m stealing. It’s my homepage. It’s the best online source for news. It should cost money to access.

14. 143. October 19, 2009 4:34 pm Link

    We already DO pay for “free” online news. In fact many of us pay more than $500-1000 a year for the privilege of “free.” It’s called your monthly high-speed internet bill and/or Mobile phone bill, which is far more expensive than a newspaper subscription, and provides essentially the same services, just updated more quickly than a newspaper, with the added bonus of video games, music and porn. It makes sense that eventually all news-gathering organizations will be owned by cable companies.

    — Pat Tanzola

15. 170. October 19, 2009 4:52 pm Link

    If the Times were to charge for content, the subscription revenue (micro or otherwise) would have to replace or exceed what would be lost in advertising revenue when fewer eyeballs were delivered. Otherwise, it’s a losing proposition that could make matters worse.

    — Mary

This is “much see” if you’re at all involved in publishing or the ereader market. The post-Kindle devices are coming (Apple, Sony and more) and they will likely have a huge impact on media consumption habits of all kinds. The Plastic Logic device has been slow to market but they have many killer features:

> Superthin, flexible screen
> Open doc formats (pdf, Word, ppt and many more)
> Wireless and 3G connectivity
> Zinio as digital newsstand provider

This goes beyond media companies — other uses such as in-sore sales aid, e-detailing etc. will all be impacted.

If you’re into media, digital and direct marketing, espcially for branded-media look around. Right now we’re espcially focused on how branded media is adjusting to the quickly evolving digital distribution and social media landscape — as well as the collapse of the print display ad revenue model.