Understanding the Magazine Industry's Darkest Hour

This comment on a blog post I wrote yesterday got me thinking about how people all over the industry are struggling to understand the unprecedented environment of today, which combines the fast-changing media structure combined with a remarkably difficult recession:

Driving revenue while trying to re-invent a business model is a difficult thing to do, it's like changing the tires on a moving truck.

I've lived through the economic downturns of early 1990s and 2000s, and right now, this one seems much worse.

Adding to the challenge is the fact that we're in an economy-wide crisis of confidence, where no one wants to spend money. Consumers who cancel frivolities like Netflix and gym memberships hold off on new cars and worry about putting kids through college. Businesses that scale back investment and hiring. Local governments that reduce their police overtime budgets and schools that make kids pay to participate in sports and other activities. And most relevant to us, advertisers who used to buy magazine ads Web banners, show sponsorships and newsletter insertions.

The smart ones still advertise, they still go big, but this year, right now, even a lot of these marketers are lying low.

All of this leaves a lot of us scrambling. Under pressure, we tend to fall into three general groups based on behavior patterns. There are those who panic, who cut the vitality out of their brands through layoffs and physical downgrades. (This group also includes those who sell their souls for a dollar, like those magazines that suddenly do happy features about their advertisers. You don't have to look far to find that in this space.)

And—a much more admirable group—there are those that try to understand where these sweeping changes are taking us. One of the best at this is Rex Hammock, whose blog is a source of nearly daily Socratic dialogue. Thursday, for example, he talked about the power of print media, and how he and Samir "Mr. Magazine" Husni are convinced that magazines will continue to play an important role in people's lives well into the future:

The "business model" is not necessarily selling ads or subscriptions (but can be—and Mr. Magazine loves studying how magazine companies do so). The business model is driven by whatever the greater organization's goals are. But to reach those goals, the institution must master any media important to its audience: magazines, books, events, licensing, TV programming, social (and personal and conversational) media and networking, eBooks, online community. The tools we have to work with today make this one of the most exciting times ever known. Yet we look around and see fear and defensiveness.

My response to that is this: The vast majority of companies in this business are built from the ground up on selling ads or subscriptions or both. That's what they do, and they often can't see beyond the basic economics of magazine publishing: "I either make enough money selling ads and subscriptions to pay for the cost of producing an ink-on-paper magazine and accompanying Web site, or I don't. And if I don't, then I'm going out of business."

And then there are those who take Rex Hammock's concept and execute on it. It seems to me that Hearst Magazines is one. In a speech last week at the Primex conference, Hearst EVP and general manager John Loughlin made a compelling presentation for how to model out your goals, establish strategies to achieve those goals and develop tactics to achieve those strategies.

It takes working through the minutia. As Loughlin said: "Hope is not a strategy."

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By Tony Silber --

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