Reversing the Polarity
In the fall of 2005, U.S. News & World Report, Technology Review and IDG's CXO Media, three publishers experiencing a wane in their print fortunes, announced they would be scaling back their print products and putting significantly more investment into the Web and events. Early indicators show promise. The question is, can they sustain it? "I can't speak for all newsweeklies but certainly we've learned from our readers and from what we've been dealing with as consumers is the ability to get our news instantaneously," says U.S. News & World Report publisher Bill Holiber. "There's no point as a newsmagazine to try to compete with that. U.S. News is not for everybody;we learned that a few years ago when we did a lot of focus groups."
U.S News & World Report is investing several million dollars initially into building up its online business and laid off much of its print staff, including longtime chief political correspondent Roger Simon. However, the print product will continue to be weekly and shows solid performance in revenue, if not pages. In 2005, U.S. News & World Report was up 9.2 percent to $256.5 million in ad revenue despite a 0.6 percent drop in ad pages to 1,681, according to Publishers Information Bureau. Bolstered by an election year in 2004, U.S. News & World Report was up 21.2 percent to $245 million in revenue and up 16.7 percent to 1,691 in pages. In 2003, the magazine was up 2.4 percent in pages and generated $202.2 million in revenue, per PIB.
"Nothing Else Is Going to Work"
Massachusetts Institute of Technology's Technology Review re-launched last November with technologyreview.com as the lead product and the 106-year-old magazine as a premium brand that will be published six times per year, down from 11 times. In 2005, revenue fell 34.5 percent to $8.5 million while pages fell 29.4 percent to 211, according to PIB. In 2004, revenue was up 13.7 percent to $12.9 million, while pages were up 9.5 percent to 298.9. The Web site however, posted revenue in the low seven-figures in 2005, up 20 percent over 2004.
"In recent years, we've over-distributed our magazine to 315,000 subscribers while print advertising fell 30 percent last year," says publisher Jason Pontin. "Meanwhile, advertising is up 20 percent on the Web site. Publishing companies pay lip service to the idea of a diversified revenue stream. But most publishers have invested enormous amounts in order to offset revenues in print advertising sales. If print alone was ever a working strategy for the long term, it has really ceased to be so in the last four or five years."
Online traffic is averaging 320,000 monthly unique visitors and the overall traffic goal for 2006 is 500,000 monthly unique visitors. "If you can't get traffic up to 500,000 per month, it's not a business," says Pontin. "We're facing an editorial challenge, which I don't know the answer to yet. The majority of online publishers don't receive traffic through their home page. They receive it through referring sites, the blogosphere, RSS readers and aggregation sites. Making sure that you are part of that opinion is a real challenge."
Technology Review is juggling a paid subscription model ($19.95 per year) and daily free online content.
The site will need to offer complete ad packages to gain ground. In one early coup, the Spanish government placed an eight-page ad supplement in the print publication while Technology Review created an online micro-site in a package worth more than seven figures for the year. "It's simply inefficient to run unadorned banners at conventional CPMs," says Pontin. "It's not that we that turn away banner advertising, but I think the real potential is to customize the advertising opportunities you can get."
Ironically, print ad pages have risen since the magazine scaled back. "Advertising dramatically increased for the January issue," says Pontin. "There are about 17 pages, the better portion of which are paid and not heavily discounted."
Advertisers like what they've seen but still have minor reservations. "The new format introduces a number of new advertising opportunities that our clients have expressed an interest in, such as RSS and text-to-speech," says Chris Drago, associate director of strategy at agency OMD Digital, the agency for GE. "I'd like to have a better sense of what content is online-only, and what has been re-purposed from print."
Pontin says the goal is to have 40 percent of Technology Review's revenue come from the Web site in fiscal 2006. "We were not profitable in fiscal 2005 and I can't promise you we will be for 2006," says Pontin. "I think our model has the best possibility for a single title publication. Nothing else is going to work."