The explosion of the Internet and its availability on various types of devices has established a new reality in the magazine industry.

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In order to survive a rapidly changing media landscape, magazine publishers must recognize one critical difference between print and the Internet: The Web is a dynamic medium that fosters direct dialogue with an audience; print is a static monologue.

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In today’s marketplace, nearly all publishers have carved out an online presence for their print titles. In some cases, skillful use of the Internet has leveled the playing field, to a degree, between small and large titles. However, an ill-planned and executed online strategy can just as easily have disastrous results.

Given this new landscape, FOLIO: wanted to explore the myriad pitfalls and opportunities of digital publishing. So in April and May, we undertook a major research initiative, with both empirical and anecdotal reporting, to establish a baseline for where the industry is now with its e-media efforts, and where it expects to be in the next 12-to-18 months.

We covered everything: We asked about ad revenue, editorial, technology, staffing, outsourcing, and much more. We spoke with a number of CEOs, editors, publishers, owners and consultants from both large and small businesses. We interviewed 30 executives, asking about their experiences in transitioning from print to online. They ranged from small startups with limited budgets—such as Forensic, based in Amherst, New Hampshire—to large corporations with big plans and the wherewithal to make those dreams a reality, like

At the same time, we conducted a two-part, 49-question survey that was sent to 9,479 magazine-industry professionals. We received 598 responses. Selected results are included throughout this report.

In the following pages, we will identify specific steps and technology options for executing a digital media business effectively. This report is intended to serve as a strategic primer for publishing executives looking to make the next-level investment into their interactive businesses. We assume that your brand has a Web site, we assume that you believe you need to do more with it. From that premise, we’ll cover everything you need to do next. That includes:

Section One: Setting Objectives
Section Two: Projecting the Revenue Opportunity
Section Three: Evaluating the Applications, Features and Software You Need
Section Four: Evaluating Staffing Needs and Whether to Hire Within or Outsource
Section Five: Setting a Budget
Section Six: Projecting ROI

Additional reporting by Eileen Davis and Dave Iannone