Magazines Lose $10 Billion in Revenue, And Laurel Touby Wonders Where All the Good News Is

The first quarter is closed and the results are in for the magazine industry. Step back and you realize that we are witnessing a conflagration.

From FOLIO::

Ad pages in consumer magazines dropped 25.9 percent while ad revenue fell 20.2 percent in the first quarter of 2009, according to figures released today by the MPA's Publishers Information Bureau.

This comes one week after ABM's Business Information Network reported that ad pages for b-to-b magazines fell 27 percent and revenue dropped 21 percent in January 2009 compared to January 2008.

Percentages can mask the true order of magnitude of change. Absolute numbers tell a better story—they are the currency we use to pay the bills, not percentages.

At the current run rate, magazine revenues will drop $9.5 billion dollars from 2007 to 2009. Ad pages will decline by 400,000. That means editorial pages will decline by something close to 500,000.

Astounding.

As I thought about the implications of these numbers, my attention was caught by a Twitterstream from Laurel Touby.

I first encountered Laurel seven or eight years ago at an industry event, where she was prowling about wrapped in a distinctive boa, pigeonholing anyone that she thought had something useful to say. If you didn't make the cut, she moved on, abruptly but with a distinctive intensity that helped you reconcile the sudden shift in direction.

She had founded Mediabistro. It was originally a "meetup" for media mavens which she built into an energetic community focused around jobs, career and fun. She eventually sold the business to Alan Meckler.

I went down to her office to visit her soon after our first meeting. I wanted to understand what she had done. I asked questions, we talked, and I was struck at how elegant and simple the core of her business was. Give people a way to come together and they will do all kinds of interesting, useful and, if you're resourceful, ultimately profitable things.

So she's got a big dose of Web cred with me, and that's why the Twitterstream was so fascinating.

There are a lot of magazine people on Twitter, and Laurel's call for good news got one response:

Forget it. Brand loyalty (=market power) has officially and forever shifted from content producers to content indexers.

Her stream of Twitters innocently captures the sadness and misdirection of the magazine world. Money and Kiplinger's announce new Web tools and they hardly touch on the kind of interaction and community that people desire. "[People] want to activate advice online and in their lives," Laurel says.

When an industry loses $10 billion of revenue, that almost all comes off the bottom line. And to right itself, that industry has to make radical changes to its two biggest assets: human capital and product. The process is wrenching and disruptive.

Look around the blogosphere and the battle big media is gearing up for is around its content. It's a valiant last stand at Thermopylae, against the overwhelming force of Google, the clever stealth of Huffington Post.

While that battle is grand and glorious, it doesn't confront the root of the profound change. That change is captured in the way people are migrating into their social networks online, creating their own content, interacting with groups of their peers, embracing diverse communities that organize around each other.

Magazines at their best do two things. They project authority and create community. Those two things, done well—and they still can be done well—create powerful environments for advertisers.

Authority and community have dissipated into the online world, lost to Google and the social Web.

In the magazine business, our core DNA tells us that to protect our brand, we need to control our authority and our community. When we engage our community, we filter and channel. We don't reflect, we don't mirror and we don't embrace.

There are exceptions, the innovators who have moved their business into more diverse and innovative modes.

We don't have any choice. That $10 billion of lost revenue isn't going to come back—not when the entire economy has lost more than $2 trillion. The path to prosperity will be trod through the current circumstances, as unlikely as it may seem today.  Some brands will survive.  But it will require reinvention.

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By Dan McCarthy -- McCarthy is the chairman and CEO of Network Communications, Inc. (NCI), one of the nation's largest local media companies, with web sites and local magazines serving the housing market.

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