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Tony Silber

Notes from the 2012 WPA Conference

Tony Silber Editorial - 04/30/2012-12:42 PM


The Western Publishing Association had its annual conference Friday in Los Angeles after a layoff of a couple of years. Called WPA Media Publishing Conference 3.0: Navigation. Innovation. Growth, the event was lightly attended, with perhaps 100-120 total attendees, including speakers and exhibitors. (Pictured to the right is the closing panel: Rick Calvert, CEO, BlogWorld & New Media Expo; Jordan Gold, VP, products & content, Freedom Interactive; Dan McCarthy, partner, DeSilva + Phillips. Pictured below to the right is the closing panel audience.)

But the content was often quite strong, and as with all face-to-face events, there are always important snippets of insight and business approaches worth holding on to. Following are some of the highlights.

• Paul Miller, CEO of UBM Electronics and UBM Canon, on the future of his business: “I don’t think advertising is the future for us. We’re engaged in marketing services and e-commerce.”

• Also from Miller: “The tech-publishing sector is the front seat of the roller coaster.”

• Dan McCarthy, partner at DeSilva + Phillips, in the executive forum: “The holy grail is to push your way into your audience’s workflow. Salespeople need the tools to say, ‘This is exactly what I’ve given you, but what are you giving me credit for?’ Counting outcomes is the single biggest practice that needs to move from digital to print.”

• 1105 Media CEO Neal Vitale, during the same session: “Prepackage what it is you want your client to know.”
• McCarthy in the same session: “Clients stop doing business with you not because your results are bad, but because your customer service is bad.”

• McCarthy during the closing session: “There are three trends in companies that are doing really well. First, demand value for the things they think are valuable. They sell something. Second, they build their companies around technology, including emerging ones. And third, they have people of all ages working at their companies. They don’t need young people, they need smart people able to learn new things. And here’s another: They are increasingly willing to partner.”

• McCarthy during the closing session: “The position of ‘chief digital officer’ is window dressing. It makes me cringe. The guy or woman who runs the company should be responsible.”

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Tony Silber

Sid Evans on What Southern Magazines Can Teach the World About Media

Tony Silber Editorial - 10/27/2011-10:25 AM


What’s the difference between Garden & Gun and Portfolio, two award-winning magazines that were both launched in 2007?

Other than the obvious response—Portfolio is out of business while Garden & Gun thrives—for Sid Evans, the difference comes down to one word: Soul.

Evans, the group editor of Time Inc.’s Lifestyle Division and founding editor of Garden & Gun, says being “soulful” makes all the difference between magazine success and failure, and it’s something Southern magazines can teach the world.

Evans was a keynote speaker at the ACT2 Conference in Oxford, Mississippi, and in his presentation, he offered seven key ingredients for success of Southern magazines, ingredients that all magazine brands can emulate. “Our first cover had Pat Conroy standing in a fountain,” Evans said. “It was not a choice a focus group would have made. But to me it made sense!”

In music, art, literature, architecture, food and more, there is “an abundant, rich life” in the South, and that’s what people want, Evans said. “We were a general-interest magazine about Southern culture, and it struck a nerve immediately,” he said. “And somehow, that translates beyond the South.”

Here are Evans’ 7 ingredients of successful Southern magazines.

1. Make people proud of where they’re from. Think about what was going on in the South in 1966, when Southern Living was launched, he said. It wasn’t great. “But Southern Living was about a civilized, gracious place.”

2. Make food the center of everything. “Food is what binds people together,” Evans said. “It’s what they talk about. And it’s not just the recipes, it’s the stories—the barbeque joint that’s been around since the 1950s. The term ‘American food’ doesn’t really mean anything—but Southern food, that means something.”

3. Never underestimate the power of a great story. “A lot of the media world has lost sight of that fact,” Evans said, recounting a story in Southern Living of how people survived the devastating tornados in Alabama earlier this year, and how it touched people all over the world.

4. Never underestimate the power of nostalgia. “Even as you do Facebook and develop a Twitter presence, remember nostalgia,” Evans said. “At Garden & Gun, we got a letter from a reader in New Jersey who said we made her nostalgic for a place she’s never been. We did story on Facebook about Southern sodas, regional sodas that people grew up with. It was like someone dropped a bomb on our Facebook page!”

5. Have a drink. Southern Living has had a “tortured relationship” with alcohol over the years, Evans said, but now, alcohol is a regular part of the magazine, as it should be. “When you do a story about a mint julep, you’re doing something about more than a drink,” he said. “When you think about most kinds of alcohol, they come from somewhere else. But bourbon is ours. It is uniquely Southern.”

6. Pick the right heroes. “One of the things that makes Southern magazines unusual is that readers treat celebrities as members of an extended family,” Evans said. “When you’re writing about celebrities, you need to be careful. If they don’t seem real, if they don’t represent the South well, then you lose credibility with readers.”

7. Make your readers the star. “Elevate them,” Evans says. “Recipe sharing is a huge part of the culture—a kind of cultural secret weapon.”

And in the end, Evans repeated, a magazine should “be soulful. It’s not a business strategy, but it is a business philosophy.”

The ACT2 conference is organized by Samir Husni, director of the Magazine Innovation Center at University of Mississippi the journalism school, and widely known as “Mr. Magazine.” The two-day event, in its second year, has doubled in size from 2010, Husni said.

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Tony Silber

Notes on Ethics, Social Media and Ad Spending

Tony Silber B2B - 09/22/2011-14:11 PM

Here are some ruminations on trends, courtesy of my annual trip to the U.S. Open with three good friends, Ted Bahr, CEO of BZ Media, Steve Davis, president of SRDS, and Michael Forgash, an account executive at SRDS.

We've been doing this outing for years, the four of us, and over that span, as a result of my exposure to the accumulated wisdom of my three industry colleagues, I've come up with countless terrific stories for FOLIO: and our other brands. And I've often changed the way I look at the business as a result of the conversations we have.

This year, we discussed some especially timely things. One was an observation that annual booked business, in b-to-b media, at least, is increasing in recent years.

On the surface, that's a good thing. You want to be able to go into a new year counting on a base of committed business. If your budget is $1 million, it's nice to have $500,000 locked up in January, knowing that you're going to get the rest as the year unfolds.

But in recent years, if the magic number was traditionally 50 percent up front, for some brands it has reached 80 percent or more. Good thing, right? No. Because few advertisers have slush funds anymore. Which means opportunistic, spot buying is declining.

Last-minute "remnant" buying is disappearing. So to use my hypothetical example, that $500,000 of booked business is on a declining annual total-maybe $800,000 instead of $1 million. That's reality for many brands, and it's not good.

Social media is an area of opportunity, or so says Ted Bahr, who describes a program of doing lucrative marketing through sponsored tweets, Linked-In and other social networks.

Get into these kinds of marketing techniques early, says Steve Davis, because publishers that are utilizing social media now to grab audience are doing the right thing: The acquisition costs are reasonable and will likely escalate soon.

Perhaps the most troubling thing, even more so than what's happening with annual spends, is business ethics. It's true that we've always had ethical issues in b-to-b media, but as the industry matures, and print declines, many brands hear from advertisers that they "don't care" about audits. Do WE care? And if we don't do we nevertheless tell the truth and maintain pristine files?

That's a question worth asking of ourselves. We talked about the slippery slope of declining editorial ethics (I saw a magazine recently that featured on its cover a person it described as a mover and shaker in foreign markets. Then I flipped a few pages and saw that same cover subject listed on the masthead as a business-development director for the magazine, mining those same foreign markets for business. And then I flipped a few more pages and saw that the tourism bureau for that same region was the "sponsor" of the cover story).

Not good.

Are we still a noble profession?

 

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Tony Silber

At Dealmakers Summit, Execs Imagine the Media Company of the Future

Tony Silber Consumer - 02/04/2011-14:18 PM

New York--Media companies of the future will be organized differently from the way they are now, with much higher capital expense costs and much greater need for in-house digital development skill.

That, with some accommodations for varying markets and editorial missions, was essentially the conclusion of a panel of media executives at the DeSilva + Phillips Dealmakers Summit last week.

The panel, called "How Will Media Companies Be Organized in the Future," featured four well-known executives: Frank Anton, CEO of Hanley Wood; Dan Lagani, president of Reader's Digest Media; David Liu, CEO of The Knot; and Vivek Shah, CEO of Ziff Davis Media.

It was one of several timely sessions at the event, the ninth annual Dealmakers Summit, which is produced by the deal brokers DeSilva + Phillips. Liu, CEO of the Knot, described the disorientating nature of media-industry competition these days: "The big threat to most people is that it used to be, say, Travel +Leisure competes with Conde Nast Traveler. But now, you find yourself competing with people who weren't even in your Zip Code. If your competitive silo doesn't exist anymore, and if your internal silo doesn't exist anymore, then you really have to re-imagine your business.

"We have people tracking Twitter feeds and Facebook feeds that you didn't have to worry about 18 months ago," Liu said. "You used to want to just hit a groove and not have to worry about [the business model] for a while. You can't do that anymore. "

Liu added this anecdote: "In the early days, I had an investor say to me, and it was an epiphany: ‘In software there's no number two. There's no second operating system. There are no alternate standards. In media, as we're moving toward being more like tech companies, we have to be thinking like software companies too."

The challenge to that type of thinking was pointed out by Anton. "We have a quandary," he said. "Our average reader is male, 57-years-old, and fewer than half have a smart phone. You come to a conference like this, and you come away convinced that you have to do this online stuff. But those 57-year-olds are not online."

The other challenge, Anton said, is in developing digital skill sets among the staff. "We wonder why the best and the brightest in digital technology would want to come to Hanley Wood," he said. "We're not a technology company."

Lagani, for his part disagreed, saying the best and the brightest in any venture are attracted to a brand. "The number of people actually looking to move east [presumably from Silicon Valley] and work for Reader's Digest, it's fascinating," he said. "It doesn't have to be a great digital-only pure play in order to excite people."

In one of the most interesting exchanges of the session, Ziff's Shah pointed to an entirely new cost structure that media executives have to deal with. Traditionally, he said, media companies have had predictable costs in various areas, like content creation, sales, central services and manufacturing. But now, he said, "What we're seeing at least, is that traditional costs are now about 65 percent of the total. And that's not because they've gone down, but because we have new costs in commerce and other areas."

Essentially, he said, the cost structure has expanded to the point that total costs are 120 percent of what they once were.

Added Anton: "We used to spend maybe $2 million per year in capital expenses. Now it can be five times that. Private equity used to invest in media companies because they had strong cash flow. But now our expenses are much higher."

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Tony Silber

‘The Future Does Not Exist’

Tony Silber Association and Non-Profit - 10/27/2010-10:50 AM

That phrase was the title of one of the presentations at Samir Husni’s recent conference, called “Reimagining the Future (While We Still Have Time),” and held at the Magazine Innovation Center in Oxford, Mississippi. The presentation was made by Thomaz Souto Correa, the vice president of editorial at The Abril Group in Brazil. And while Correa discussed many things, there is a particular idea in that title worth thinking about.

Perhaps the future doesn’t exist because no one, and I mean no one, knows what it’s going to look like even two years from now. Think about one of the biggest debates of the last few years—whether to charge for online content.

When Steve Brill and Walter Isaacson and Rupert Murdoch and others suggested that the status quo was unsustainable, the purveyors of the conventional wisdom came down hard. The cat’s out of the bag, they said. Stop thinking like it’s 1997. Start building a business for the Google economy. There’s no other choice.

Well, one thing none of those wizards thought of was how mobile apps and iPads would change the equation. Now, suddenly, there’s a path to paid content online, because there’s a significant migration away from the free Internet and in the direction of apps you have to buy. Or apps from which publishers sell subscriptions to their content.

The point here is that as the media world changes, what seems dominant today may turn out to be yesterday’s news in short order. Remember CompuServe, AOL, etc.? I could go on, but you get the point.

So while the “Reimagining the Future (While We Still Have Time)” conference provided no real visionary solutions, because that’s impossible, it did offer a mosaic of opinion and perspective, when combined into a whole, provided a good look at where the industry is now and where it needs to go.

The future doesn’t exist because we haven’t built it yet.

And even more important, the students at the University of Mississippi were full participants. Anyone who spent a few days with the young journalists at that conference couldn’t help coming away with a new confidence about the future of the profession. These people are bright, energetic, savvy and ready to take the reins. Here is a list of some of the student participants. I wanted to acknowledge each of them by name, because they were all so impressive.

Undergraduate Journalism Students:

Natalie Dickson
Kirby Sage
Elizabeth Pearson
Alex Pence
Maggie Giffin
Markus Simmons
Katie Williamson
Ja'juan McNeil
Rashell Reese
Addison Dent
Houston Cofield
Ren Turner
Nick Toce (also event photographer)
Alex McDaniel (also event coordinator)

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Tony Silber

BPA’s Mixed Message

Tony Silber Audience Development - 10/15/2010-14:06 PM

BPA has announced the winner of its second annual house-ad contest. Participating companies create a house ad campaign that touts the value of the third-party audit, in this case, obviously, BPA’s audit.

The winner this year [pictured] is Grand View Media Group. The Birmingham, Alabama-based company created an ad featuring an image of a Groucho Marx mask with the tagline, “Wondering What the ‘Other Guys’ Are Trying to Hide?”

The blurb beneath says, in part, “Being BPA audited means not hiding behind silly disguises. No handshake guarantees that you’re getting what you paid for.”

I strongly believe in the third-party audit, and I think BPA is a fine organization. But their campaign leaves me with the feeling that their house-ad contest, as well as their satellite Web site, only serves to weaken print media in general. What BPA is saying is that any print magazine that doesn’t have their stamp of approval is suspect and could be cheating you, the advertiser.

I believe that a clean BPA or ABC audit is a valuable selling point. But I’m not at all prepared to say non-audited print magazines are potential cheaters. There are thousands of non-audited magazines, many of which have legitimate reasons for foregoing an audit. The vast majority are solid, reputable businesses.

There’s no need to cast unjustified aspersions on non-audited media in order to underscore the value of an audit. Not to mention, from a BPA point of view, that these campaigns can’t possibly be ginning up lists of eager prospects for the bureau.

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Tony Silber

The Magazine-Media Identity Challenge

Tony Silber Association and Non-Profit - 10/13/2010-09:12 AM

As we all wait for the economy to turn, and as we see signs that that’s happening, virtually all of what used to be called the magazine industry is wondering about what, exactly, is emerging in the place of a healthy magazine industry.

There’s a crisis of identity in this business right now more than I’ve even seen. If you look around at the leading companies, and the industry associations, there’s an unprecedented level of flux and confusion. The big consumer-magazine companies have been playing musical CEOs for months.

Yes, they’re motivated by the economic downturn, but more than that, they need someone who knows where things are headed. Of course, if people like that were easily found, we’d have plenty of CEOs with lifelong tenures.

The associations are likewise casting about for answers. The MPA conference this month, with its focus on things digital, such as iPad apps, was a good example. Featured speakers included Hulu CEO Jason Kilar and VivaKi chief innovation officer Rishad Tobaccowala. But the association’s announcement of a rebranding was especially indicative. MPA used to stand for Magazine Publishers of America. Now it just stands for MPA. And the association is now called, “The Association of Magazine Media,” which is actually a good description. But clearly it wants to sever itself from the “print-only” anchor, even if the Web URL is still www.magazine.org.

For a sense of what that identity crisis feels like, check out Jason Fell’s blog about the MPA conference and the questions and observations in the real-time tweets at the bottom.

American Business Media is undergoing a similarly awkward transition. Its core members, the old-line trade publishing companies, are still the dominant voices in the association, but they’re not where the growth is. That will come from online-only startups, and that creates a dilemma for ABM, because there’s a significant cultural gap between the two groups. The guerrilla-style online companies need to be convinced of the value of ABM membership. To them, trade magazines have only a little to do with marketing services, SEO, custom media, lead generation and much more.

ABM’s selection of a new CEO from the music industry, with little or no experience in b-to-b media, is also an example of the ABM is struggling with its identity.

The audit bureaus face the same thing: Maintain relevance as print declines as part of the media mix and new, unfamiliar players with new ideas emerge.

All in all, it adds up to an era of uncertainty. It’s true that most people, and most smart people say that content is the key: Get that right online and off, and the business models will fall into place. That’s fine in an academic sense, but tough to execute.

All this industry needs is someone with a vision for moving forward in a way that aligns three things:

• Existing assets, skillsets and capabilities;
• Revenue;
• And the fast-moving changes in the media world.

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Tony Silber

Thoughts on the Advantage Business Media Requalification Fiasco

Tony Silber Audience Development - 09/27/2010-10:31 AM

After reading the story of how Advantage Business Media got scammed by a telemarketing firm on its qualification efforts, here are some observations:

• BPA was right two years ago to require that calls be recorded. It stands to reason that these violations would never have been discovered had the calls not been a required part of the audit record.

• BPA proved its value here, for sure. The audit bureau, faced with a perceived decline in importance as print magazines become less important in the media-company revenue mix, showed why pristine third-party verification still matters. The press release wasn’t completely clear, but somewhere between 6,000 and 24,000 subscriptions of five Advantage magazines were disqualified. That’s a significant number.

• I’m not sure how Advantage could have missed such a systemic failure except that it doesn’t have enough people paying attention. And that’s one byproduct of the waves of downsizing in the magazine industry in the last few years. The circulation profession has been particularly hard hit, as publishers take one of three approaches: They lay off their circulation departments, or at least downsize them dramatically, and outsource a bare bones operation; they focus their audience development efforts on database development and online audience acquisition, and hire people skilled in those areas; or they task their traditional circulation departments with handling their “legacy” tasks along with those new functions.

The third approach has been tried in several high-profile cases. But for the most part, that approach has not succeeded or taken hold widely. The sum of $500,000 in additional spending to requalify the falsified calls seems like an awful lot of money.

It’s scary. It’s not an amount that companies have sitting around. In fact, it might break some smaller companies.

I predict that the publicity surrounding that unforeseen requal expense will cause yet more companies to question how much they need an audit. Don’t get me wrong: I believe strongly in the value of the audit bureaus. But given the tenor of the times, you can’t expect executives not to note the extremely high costs here.

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Tony Silber

On Mammals, and B-to-B Media

Tony Silber B2B - 09/21/2010-15:58 PM

M&A activity is one of the most direct signs of the health of any industry, including media. Why? Because unless it’s a distress situation, if someone’s selling it means they’ve done well. And if someone’s buying, it means they’re bullish about the future.

So all of a sudden, there are some interesting deals occurring in b-to-b media that tell us something about its current state and its future outlook. This month alone produced two of the biggest non-distressed transactions in a long time. First, Access Intelligence sold off several pieces, including Chemical Week, SRI Consulting, the market info and price-discovery service Harriman Chemsult and The Energy Daily. Together, the divested assets represented a bit less than half the Access Intelligence portfolio, some sources say.

Last week, Apprise Media divested Canon Communications for $287 million. This is a big-time transaction, especially considering the deep, deep freeze in M&A activity in the traditional print-based b-to-b space over the last few years. 

And just today, Northstar Travel Media acquired ProMedia.travel, a media company serving the global corporate travel management market. Founded in 2006, ProMedia.travel publishes Procurement.travel—a quarterly magazine with a circulation of about 13,000—as well as three e-newsletters.

A few weeks ago, I had a conversation with some old friends at the U.S. Open that was decidedly pessimistic. We debated whether the b-to-b executives who took over the divested pieces of Reed, Nielsen and other companies were true opportunistic entrepreneurs, or just the same old dinosaurs, only now no longer in the herd.

But now, with the recent flurry of transactions, I’m thinking that might not be the right context at all. It may be the b-to-b media—and I mean the traditional b-to-b media, the industry that used to rely almost entirely on trade magazines for its revenue—is gaining strength. If you look closely, most b-to-b media companies are no longer print centric. Yes, it’s true they may get most of their revenue from print media, but these companies have for the most part come to recognize their future is in being something more diverse.

Over the last four or five years, media companies responded like this:

• Losing advertising revenue? Then create products that produce revenue from readers.
• Perceive a need for more industry training and education? Create virtual events and Webinars that supplement live events.
• Looking for a way to produce meaningful leads for marketers? Create Virtual events and Webinars.
• Looking for ways to exploit your industry-leading databases? Create automated marketing programs for suppliers.
• Need a more diverse revenue mix? Create data products and a variety of online information sources.
• Lose half your revenue? Do more with less, sometimes much less.

I’ve learned from my conversations around the industry that you can be well staffed and still be a mediocre brand, and you can be a very strong brand with a lean staff—and I mean very lean.

What these recent transactions are telling me is that there’s a lot of juice left in this industry, and that like the mammals after the asteroids hit, b-to-b media companies are quietly adapting and getting stronger even as they watch the dinosaurs die off around them.

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Tony Silber

Quad Offers Realistic But Promising Outlook on Magazine Trend

Tony Silber Design and Production - 03/08/2010-10:58 AM

I found this summary by Quad/Graphics of the state of the printing industry to be both sobering and possessing of a businesslike optimism. It comes as part of an SEC filing made on March 5 in connection with Quad's attempt to go public and possible acquisition of World Color later this year.

Print Industry Trends

Demand for printed products has generally correlated with real gross domestic product growth, as economic activity and advertising spending are key drivers of demand for printing and related services.  More recently, the global economic recession has caused advertisers to dramatically reduce spending.  Throughout 2008 and 2009, magazine publishers facing diminished advertising pages reduced total page counts, catalog marketers reduced page counts, circulation and the frequency of print campaigns, retailers curbed investments in store inventory and reduced advertising, and other advertisers reduced their direct mail campaigns, particularly in the banking, insurance, credit card, real estate and nonprofit industries.  Decreasing print volumes caused by the impacts of the economic recession, increases in postage expenses (which significantly outpaced inflation over the last ten years) and the increase in the use of alternative marketing technologies, as discussed below, led many printing businesses to fail and the industry to undergo consolidation.  The printing industry consolidation and decreasing print volumes have created significant pricing pressures and excess capacity in the printing industry.  According to capacity utilization data from the United States Federal Reserve System, the excess capacity in the printing industry, which had not fully recovered from the 2002 and 2003 recession, further increased recently, with printing industry capacity utilization of 67.4% in January 2010, compared to 69.6%, 77.7% and 80.5% in January 2009, 2008 and 2007, respectively.

In response to the economic recession, Quad/Graphics believes that traditional users of print and print-related services have turned their focus to generating and tracking the highest returns on their marketing dollars.  In addition, the emergence of alternative marketing technologies, such as online distribution and hosting of content and mobile technologies, on both a stand-alone basis and in conjunction with other marketing channels, has resulted in these traditional users of print and related services allocating their marketing and advertising spending across a wide and expanding selection of non-print electronic media options.  Quad/Graphics believes that advertisers and other traditional users of print find that they receive the greatest return on their marketing dollars when they effectively utilize data to target the appropriate customers and combine digital alternatives with customized print products in a targeted, multi-channel marketing campaign.

In this increasingly multi-channel marketplace, Quad/Graphics believes that the printing industry has been driven to make substantial capital investments in new technologies, such as those to deliver targeted and customized print solutions to integrate effectively its products and services within a multi-channel marketing campaign.  In addition, Quad/Graphics believes the commercial print industry has moved towards shorter print runs and increased production efficiency of products with lower page counts and increasing complexity.  Finally, Quad/Graphics believes that successful commercial printing companies will invest in finishing and mailing and logistics capabilities to minimize their clients’ total manufacturing cost, which includes mailing and logistics (and is not simply limited to print).  For many customers, mailing and distribution represent their largest cost, typically two to three times the cost of their print expense.  Therefore, a printer’s ability to impact mailing and distribution expenses through data management and sophisticated, automated manufacturing and finishing equipment is quite valuable to customers.

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Tony Silber

Time in Which Content Retains Value is ‘Rapidly Compressing’

Tony Silber Audience Development - 02/08/2010-16:00 PM

Last week, I attended the Fulfillment Management Association’s annual President’s Panel, which features the leaders of the major fulfillment houses talking about the business. It’s always a great and informative session.

I was particularly struck by comments from Ray Butkus, CEO of ARGI. Media companies are in crisis, Butkus acknowledges, and because of that, their supplier partners are as well. But the crisis, he said, has nothing to do with readership and circulation. Online or off, the readership is there. “The crisis has to do with the ability to make money off [readership and circulation],” Butkus said. “You create content, but the time within which content retains value is rapidly compressing.”

According to Butkus [pictured], database and fulfillment partners need to facilitate a media company’s ability to create content products based on knowledge of what the market needs, and the traditional two-week window for reports and other information is no longer good enough.

Butkus’ point is important. Fulfillment providers need to think differently about what they do for media companies. They need to help media companies generate revenue in the new world of digital media. And that means providing real-time intelligence on the audience, and creating a software infrastructure that enables transactions based on content.

Butkus said it this way: “Bringing the financial transaction together with the person who wants it, when they want it, requires a moment of truth. It’s altogether fitting and proper for that to reside with us.”

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Tony Silber

Demand Media Can Go To Hell

Tony Silber Editorial - 02/04/2010-16:36 PM

EARLIER: The Value of Online Content: Practically Nothing

I used to scoff at what newspapers paid freelance writers for stories. Then I heard about Demand Media.

In the magazine industry, somewhere around $1 per word has been the going rate for most magazines for at least 20 years. Write a 1,500-word story, get paid $1,500. Large consumer magazines pay significantly better, going as high as $4 per word for the large magazines. There’s been no increase in fees in 20 years, but you can make a living.

Newspapers traditionally were much worse, paying $250 or so for that same 1,500-word story.

But Demand Media trumps newspapers for cheapness. Demand pays its contributors $15 per story, or 3 cents per word on a 500-word story. Demand, a four-year-old company, creates a huge amount of content that goes on various how-to sites, and is designed in part to attract Google ads. In a story yesterday on Vanityfair.com, author Matt Pressman describes the process.

He says Demand Media employs 7,000 writers, editors and videographers and produces 4,500 pieces of content a day. He adds that writers are flocking in droves to Demand Media. Pressman quotes Steven Kydd, Demand Media’s executive vice president in charge of content, as saying that writers have the benefit of steady reliable work and a quick turnaround on payments.

Please. Spare me. Getting a quick turnaround on nothing is meaningless because it’s still nothing.

Demand Media isn’t really a new idea. Sites like About.com and Themestream relied on freelancers and non-professional enthusiasts. There’s a site used by the newspaper industry called Helium that pays writers something like $25 per article. Kydd, who spoke at an MPA lunch this week, wants to partner up with magazines.

I hope no magazine ever partners with Demand Media. In fact, I hope Demand Media and any site like it goes out of business. They demean and abuse professional content creators, leveraging them to generate revenue from Google ads.

They’re sweatshops. No magazine should accept content from a company that treats content with such disrespect. In the end, too, you get what you pay for.

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