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Matt Kinsman

Consumer Cutbacks: Restaurants, Vacations ... Magazines?

Matt Kinsman Consumer - 12/04/2008-13:37 PM

A new consumer survey from Forrester Research finds that while 77 percent of consumer respondents will hold steady with their current level of print magazine subscriptions, 18 percent expect to cut back on subscriptions, while 4 percent plan to boost their number of subscriptions over the next year.

Multiple magazine readers plan to winnow down their reading list, with 22 percent of those with three or four subscriptions and 24 percent of those with five or more subscriptions anticipating cutbacks. Just 13 percent of consumers with one or two subscriptions plan to cut back.

The study also says consumer publications will be harder hit than business titles, with just 12 percent of subscribers for work-related use planning to cut back.

The study is part of Forrester's North American Technographics Media, Marketing, Consumer Technology, Healthcare and Automotive Benchmark Survey of 5,000 U.S. households.

Still, while the number of print launches has dropped by 30 percent over the last two years, the number of new magazines in 2007 totaled 715, which is far higher than the launch rate in 1991, the first year of commercial Internet usage, according to Samir Husni in a recent article for Writer's Digest.

Matt Kinsman

'Dramatic Restructuring' Could Become the Norm in 2009

Matt Kinsman M and A and Finance - 12/02/2008-16:01 PM

Publishers aren't the only ones looking for new ways to keep dollars coming in. Media banker DeSilva + Phillips announced yesterday a new "operational restructuring practice," which will offer recommendations for improving financial performance, including "identification of revenue enhancement and cost savings opportunities, operating efficiencies, incentive compensation plans, investment savings and evaluation of strategic alternatives."

The new practice will also review organization structure to identify "possible efficiencies in process and management of the overall business."

Much of the advice will be financial, but use of the word "restructuring" suggests DeSilva + Phillips anticipates dramatic strategic restructuring of publishing companies that may talk a good game with digital but are still built to primarily produce monthly magazines.

Source Media's shift to a pooled editorial model and an organization around communities rather than media (something also adopted by F+W Media) could become the blueprint for other publishers. According to the ABM Financial Trend Report, presented by the Jordan, Edmiston Group, print provided an average of 66 percent in total revenue contribution in 2007, compared to 15 percent for digital, which was actually flat compared to 2005.

Restructurings in 2009 will come fast and furious, and for the smart publishers, they will be based on a longer vision than seeing a quarterly bump in EBITDA.

Matt Kinsman

'Trading Pennies for Dollars'—Why Digital Staffs are Getting Cut, Too

Matt Kinsman emedia and Technology - 11/20/2008-09:44 AM

You'd think if any group was immune to layoffs, it would be digital. In FOLIO:'s Magazine Industry Job Report, which came out in March, 53 percent of respondents to a survey on hiring said that their company is most focused on filling online positions (compared to just 24 percent for print). Meanwhile, 75 percent of b-to-b CEOs and 66.5 percent of consumer CEOs say e-media will offer the fastest growth over next year (followed by new print advertisers, which surprisingly edged out events as the second-fastest growing revenue stream).

But while almost every publishing discipline is feeling the squeeze of mass layoffs, digital groups are surprisingly hard-hit, especially at the larger consumer publishers. One major consumer publisher is in the process of farming out all its IT functions, including Web development, to India. Another, Mansueto Ventures, publisher of Fast Company and Inc., merged its standalone online group into its print department, reflecting the struggle even that company is going through in its approach to new media, despite its reputation (and success) as a leading edge publisher.

CondeNet might be the most dramatic example, cutting more than three dozen online staffers as well as most of the staff and pulling back on most of the site's original content.

The problem for consumer publishers is the financials. While publishers have long spoke of online revenue being smaller but more profitable, it's hard for larger publishers with six-figure (or more) print deals to be excited about five-figure online deals. In a recent article on's Big Money, Lesley Blume wrote that one media expert estimates that an online CPM is worth between one-seventh and one-tenth of a print CPM. "That means that swapping out online-for-print publication right now literally amounts to trading in dollars for pennies—which is hardly an alluring prospect for publishing companies used to commanding lavish ad revenues."

Hearst has aggressively pursued a digital strategy and purchased online companies such as, and Kaboodle. While CEO Cathy Black told FOLIO: last year that she spent 20 percent of her time on digital, print still paid the bills. "The numbers that are trotted out are that 4 percent or 5 percent of [mass consumer magazine revenue is digital] but we're not there yet," Black said. "Digital still for us is the tail wagging the dog."

While Hearst knows it must pursue a digital strategy, too many publishers that were lulled into thinking the Web is a quick fix may gut their online departments before they've had a chance to get started. We've heard over and over about salespeople not wanting to sell digital because the commissions are too low—hopefully that's not a mindset CEOs are developing too.

Matt Kinsman

Report: Your Web Audience May Be 1.5 Times Larger Away From Your Site

Matt Kinsman emedia and Technology - 11/13/2008-09:53 AM

A new study of more than 100 publishers in categories ranging from entertainment to technology found that original content from those publishers on other sites had an audience 1.5 times larger than the original destination site viewership.

Web content monitoring and programming platform Attributor Corp. tracked RSS feeds across 30 billion Web pages during September 2008. The study found that automotive and travel categories have the most significant viewers on other sites (five to seven times high than publisher destination sites.

Multiples for audience beyond the destination site include:

Auto: nearly 7x
Travel: more than 5x
Movie reviews: nearly 5x
Entertainment: nearly 4x
Sports, Technology: more than 2x
Advice, Environment, Health: nearly 2x
Politics: nearly 1.5x

Using a CPM of $1, the study estimated that 42 percent of publishers are missing $50,000 in annual ad revenue; 33 percent are missing up to $250,000 in ad revenue; and 25 percent are missing more than $250,000 in annual ad revenue from off-site content. Attributor Corp. suggests publishers can start seeing some of that revenue by leveraging open syndication through direct relationships with ad networks (Attributor is working with publishers and ad networks to quantify the Web audience and come up with ways publishers can get a cut of the revenue from viral syndication.)

Rise of 'Link Journalism'

Meanwhile, publishers are starting to grow more comfortable with the idea of their original content sitting on someone else's site-even the New York Times plans to launch an alternative home page featuring links to its competitors. Publish2 is an online network for journalists that makes linking and news aggregation easier. The site soft launched this summer (founder Scott Karp is credited with coining the term "link journalism").

Michelle Leder is author of the site, which focuses on items that companies bury in their routine SEC filings, and an early member of Publish2. "In my sidebar I link to stories that I think will be of interest to my readers, who tend to be hedge fund/money managers, given the specific nature of my content," she says. "Unlike a lot of other blogs, I do new reporting based on stuff in the filings, so I don't spent a lot of time commenting on stories in the WSJ, Times, etc. The Publish2 widget gives me an opportunity to easily link to these stories."

A more extensive look at Publish2 will appear in FOLIO:'s December issue.

Matt Kinsman

The Web's 'Biggest Sinkholes'—And Why They Matter Beyond Online

Matt Kinsman emedia and Technology - 10/30/2008-10:56 AM

Internet Evolution has posted a recent feature that identified Web 2.0's "biggest sinkholes"-areas in which startups are "gorging on investors" with little to show for it in return. The biggest sinkholes included:

Targeted Advertising

Social Networking



Social Publishing

While each of those areas represent a terrific opportunity for an original, committed business plan, they are also rife with "me too" imposters that are trying to piggyback off the success of others without understanding the elements of what made those companies successful in the first place.

The Internet Evolution story is a much more macro take on Web 2.0 than just the publishing industry but it offers some lessons for publishers on the dangers of the "me-too" approach beyond online. Within the last two months, the industry has seen Source Business Media, Nielsen Business Media, F+W and now Time reorganize edit and other departments around market, rather than media. It's a smart approach and one that works well provided the core edit talent is still the best it can be-new titles and new flow charts won't make up for a lack of talent. But how many of those companies have undergone real change and how many are just reshuffling the deck?

For years magazine publishers have been accused of turning to online only to try and recreate the same thing they've always done in print. As the entire industry attempts to navigate not only a shift in media but one of the most severe economic downturns it's ever seen, it's clear that "me-too"-whether online or in corporate strategy-won't be the way out for any of us.

Matt Kinsman

'Quote Us and We'll Buy an Ad'

Matt Kinsman Editorial - 10/22/2008-09:51 AM

"Let me know if we're quoted and we may buy an ad."

That's a conversation cropping up more and more between magazine industry advertisers and FOLIO:. As budgets shrink, they're understandably looking for more bang for their buck. But requests for edit coverage, previously never voiced, are now becoming upfront demands.

It's something most publishers deal with on a daily basis. But to come from advertisers who serve the magazine industry and support what it's about, is especially disturbing.

I give our sales team a lot of credit. They're hitting budget, breaking new accounts and serving our longtime advertisers at a time when marketers feel the pinch in their own businesses, and are looking for measurement-oriented marketing solutions. The overall pool of magazine marketers has been consolidating for years. However, FOLIO: still has 80-plus percent of all advertisers serving the magazine market.

And the sales team is doing it without asking the edit team for favors (think a blog calling out advertisers would ever appear on one of our competitors' sites?). We blew a recent advertorial by including a cover line that said, "Brought to You by the Editors of FOLIO:" even though FOLIO: editors had little to do with it. But it was still clearly marked as advertorial and nobody got any extra love in the main magazine.   

Those requests are out there and they're getting bolder. But when it comes to crossing the ad/edit line at FOLIO:, they will continue to fall on deaf ears.  

Matt Kinsman

Print vs. Online for Mansueto's Edit Vision—This Time Print Won

Matt Kinsman Editorial - 10/14/2008-10:56 AM

Publishing companies all over are recasting their editorial vision (and organization).

In recent weeks, b-to-b publishers Source and Nielsen and enthusiast publisher F+W have reorganized their edit staffs to revolve around market or community rather than channel (magazine versus Web site).

The recent layoffs at Mansueto Ventures and the merging of its standalone online group into its print departments reflect the struggle even that company is going through in its approach to new media, despite its reputation (and success) as a leading edge publisher.

Would the company follow the social media and UGC approach developed by Mansueto Digital president Ed Sussman or would the print staff (some of which didn't consider the Web sites worth their time, according to sources) play a greater role?

How Manuseto's online strategy will change remains to be seen but with the digital group folding into the print group and Sussman departing Mansueto to form a social publishing firm based on open source content management system Drupal (which Sussman had tapped as the CMS for, it seems the print side got its way this time.

Matt Kinsman

'In a Year and a Half, Social Networks Will be Gone'

Matt Kinsman emedia and Technology - 10/02/2008-10:15 AM

Bold predictions about social networking are becoming a tradition at the FOLIO: Show. In 2007, Fortune executive editor Josh Quittner said, "If you're not working on a Facebook-style application, you should be. A year from now, I guarantee we will be talking about what Facebook applications you have, not video."

While Quittner may have underestimated the appeal of video, he was spot on about publishers trying to climb aboard the social media bandwagon.

At the 2008 FOLIO: Show last week, we heard a more contrarian prediction about social networks from Edward Adams, editor and publisher of ABA Journal, an association magazine that serves the legal market. Speaking in a session called "How To manage Multiple products and Create More Productive Teams," Adams said, "It's trendy now to build social networks but I predict that in a year and a half, they will be gone."

Adams was being intentionally (I think) provocative and slightly hyperbolic but he makes a good point. Just like every Web 2.0 tool, some work better for certain markets (and publishers) than others. A social network for IT professionals? Gold. A social network for publicity-shy CFOs? Not so much. Even behemoths Facebook and MySpace are trying to figure out how to generate real revenue from their platforms.

Even publishers that see initial traction with their networks need their editorial staffs to join and drive the conversation and their sales teams to ultimately monetize the network, whether it's through straight advertising or lead generation. As Stephen Saunders, founder of two successful b-to-b social networks within Light Reading and Internet Evolution said during a recent FOLIO: roundtable, "The people I work with, they have to have community and revenue lined up in a plan that makes sense. It's tough times in publishing. This thing's got to make money."

Matt Kinsman

How Open Source Might Come Back to Haunt Magazine M&A

Matt Kinsman - 09/11/2008-09:50 AM

Open source—a program whose source code is made available for use or modification as users or other developers see fit—is enabling publishers to ramp up their online businesses quickly and cheaply. And a publisher with a healthy Web business can be valued between 10-to-15X EBITDA, compared to six-to-10X EBITDA for a print-only publisher.

However, some M&A experts say an open source-based business could come back to haunt the buyer of that business-especially if they buy something without realizing its key products are based on open source software.

"Open source is a big issue," says Charlie Engros, managing partner at legal firm Morgan Lewis. "When you buy a commercial enterprise today, there's an excellent chance it includes open source software. You could also be buying a lawsuit because someone could force to make that software freely available to the world."

In August, the U.S. Court of Appeals for the Federal Court made a ruling that allows greater protection for open source software against copyright infringement. The case involved a company called Kam Industries, which downloaded open source code to use in a product that programs chips in model trains. The code was originally released under an artistic license, which requires users to give credit to the author, identify the original file source and describe how the code has been changed. The code's author claimed Kam violated the copyright and filed an injunction to prevent Kam from using the software, an injunction that was initially denied by the U.S. District Court for the Northern District of California, before being upheld by the U.S Court of Appeals.

New applications are emerging that can detect open source installations, such as OpenLogic Discovery, which identifies installed open source software through graphical interface and command-line interface. With the American IP Law Association estimating defense against a software patent lawsuit costing between $2 million and $5 million, that's a strong incentive for potential buyers to make open source part of the due diligence process and make sure all terms and licenses with open source software have been fulfilled.

Matt Kinsman

E-Media Pulls Even with Newsstand Sales For Consumer Mags

Matt Kinsman - 09/04/2008-12:49 PM

E-media as a percentage of overall revenue is nearly equal to newsstand sales for consumer publishers this year, according to the 2008 FOLIO: Consumer Magazine CEO Survey.

On average, consumer publishers expect e-media revenue to generate 8.4 percent of total revenue, compared to 8.6 percent for newsstand sales (publishers generating less than $10 million per year think e-media will account for 9.1 percent of total revenue compared to 8.3 percent for the newsstand, while publishers over the $10 million mark expect to see 6.4 percent of revenues from e-media and 8.9 percent from newsstand sales).

Print Advertising is Second Fastest Growing Revenue Stream

And while it's no surprise that both large and small consumer publishers cite e-media as the fastest growing part of their business, on average they also say print advertising is the second fastest growing revenue stream.

However, smaller publishers (<$10 million) are definitely more print focused. Forty percent of smaller publishers say print advertising will be their fastest growing revenue stream in 2008, compared to just 24 percent of larger publishers. Larger publishers cited events (31 percent) as their second fastest growing revenue stream after e-media.

The full 2008 FOLIO: Consumer Magazine CEO Survey will appear in FOLIO:'s October issue.

Fastest Growing Parts of Business in 2008

E-Media: 48%
Print Advertising: 36%
Paid Subscriptions: 26%
Events: 19%
Custom publishing: 18%
Newsstand sales: 13%
Data/market information sales: 10%
Reprint sales: 1%

Source: FOLIO:, Readex Research. Respondents could name more than one category.

Matt Kinsman

VIDEO: Magazines: Hot or Not? FOLIO: on Fox

Matt Kinsman Consumer - 08/21/2008-11:03 AM

Earlier this week I appeared on the Fox Business Channel’s "Money for Breakfast" show along with Samir “Mr. Magazine” Husni and Dave Kansas, a Wall Street Journal editor and president of, to discuss whether the magazine industry is really in as dire straits as recent press suggests.

While Samir blamed publishers for boosting newsstand prices while at the same time selling annual subscriptions at bargain basement prices for much of the recent newsstand woes, the fact is reader habits are changing and the newsstand is going through a much needed self-correction.

To watch the interview, click below. [EDITOR'S NOTE: If you have trouble viewing, click host Alexis Glick's blog post on the segment here, or from the Fox Business video page here and here.]

Matt Kinsman

Monetizing Social Media: Can Facebook Deliver?

Matt Kinsman - 08/14/2008-16:19 PM

Just as video was in 2007, social media is the "killer app" for magazine publishers in 2008 and teaming with an existing network offers a huge audience without much cost or effort. Seventeen runs a tremendously successful video program on MySpace called Freshman 15 that features 15 young women sharing videos of their experiences during their first year in college. Since its launch, the program has received more than 1.3 million page views, 15,576 friends and 236,232 blog views.

But to date, most publisher partnerships with Facebook or MySpace are more about branding than revenue. That's not necessarily a bad thing, especially considering how cheap it is to leverage a partnership. But at some point, publishers need to see the dollars.

FOLIO: hosted a roundtable this week called "Creating an Innovative Community" featuring some of the leaders in social networking on the publishing side, from CondeNet to Budget Travel to Playboy to Internet Evolution and Institutional Investor. The roundtable, which will be featured as the cover story for FOLIO:'s September issue, touched on the changing role of publishers with social media, rules for networks and how to monetize them.

One participant, president and CEO Jim Spanfeller, cautioned against relying too much on the established networks. "As publishers we've got to be careful tying our overall community efforts onto the coattails of MySpace, Facebook or LinkedIn. They're doing a lot of work on how to monetize their pages but right now, a 10-cent CPM might be excessive. There is a real danger with them becoming this generation's e-mail. There is all this e-mail inventory on the portals and they can't monetize it at all."