Everywhere I look lately, there are articles and blog posts full of doom and gloom about print publishing business models that don’t work any more and how newspapers and magazines are dying. Some of this coverage is coming from industry commentators and some from ex publishing insiders who have seen the problems first hand (one might even argue that they have been partly responsible for them).
For print publishers, there’s very good reason for this pessimism. In the US, always a marker for what is to come in the UK, newspapers are already going under. Traditional publishers who happily gave away their content (and ad inventory) for free when the web first came along are now finding that on-line revenues are not making up for the decline in print advertising dollars.
This is being replicated in the UK where we’re even seeing the traditional publishers cutting back on digital costs in order to keep the business alive in the short term, by focussing on what they know best – print.
The problem is that the print cash cow is dying. Ad and recruitment revenues have been decimated by the current climate.
In these hard times, advertisers have been forced into trying alternatives and have found that they work. On-line advertising has been relatively unscathed so far because print dollars have been switched on-line. Recruitment has been moved to on-line job boards. Neither of these necessarily has the same impact as a full page colour spread or half page job ad in a magazine, but they are measurable and work. A big chunk of that money will never find it’s way back into print even when when conditions improve.
Even the publishers that have well established web properties, and the pureplay on-line businesses, are finding that the fiercely defended CPM model, the staple revenue generator for the last ten years is coming under pressure. Adwords has made measurability a given now and when times are tough, CPC and CPA rule.
So is publishing dying? Is it the end of quality content, news and investigative journalism? All of these things have been predicted and more.
There are interesting parallels with another publishing business – the music industry. Like the newspapers, for a long time the big record labels were able to control the creation and distribution of content, exploiting their position as the volume distributers in order to make revenue. Of course, lots of people benefitted, bands were signed up and paid advances, songwriters got their royalties but the main beneficiary was the music industry itself.
But then, as is now happening to print publishers, the distribution rules changed. It should have been obvious. Digital recording initially meant that CD’s could be copied and the music industry furiously ranted about IPR and pursued the pirates through the courts. But bigger problems were to come. Digital downloads, Napster, and most of all Apples iPod changed the rules forever. Amazingly throughout the majority of the period when this was happening, the music industry adopted a stubborn, head in the sand attitude to the situation.
Perhaps even more puzzling is that the publishing industry, having lived through (and reported on) what happened to the music business, has thus far largely adopted the same tactics. In the words of Jim Collins, they are not confronting the “brutal facts”.
The common thread to this, the thing that changed, was the distribution method. History of course shows us that this has always been the case, it’s happened with many industries. In the transport industry, canals were replaced by trains which were then replaced by roads. In communications, the letter was replaced by the telegraph, then the telephone and now, for a lot of us, email has become our main communication method None of the previous industries died completely (there are still people tapping morse code out there) but they lost their position as the primary distribution method.
Did this change kill music? Not at all. Most would argue that music has never been in better shape. Look around and commuters, runners, people lazing in the park are all listening to music on their iPods. Not only that, they are finding new music through Apple’s Genius, niche internet radio stations and services such as LastFM and Spotify.
As a band, it’s never been easier to get exposure by promoting your songs on MySpace, iTunes and Youtube and make money directly from downloads. Unlike the artists in the 60’s and 70’s, performing live is now profitable so bands are playing concerts and festivals that are sold out every weekend.
Music is alive and well and while it’s not RIP the music business, the power has shifted away from “the industry” and to the people that create the music and those that want to hear it.
What can the publishing industry learn from all this? I think a lot and my next post will focus on how we might adopt some of the new models and provides some predictions…
