A Troubling Sign for Tablet Magazines?

A study that purportedly shows tablet users' "preference for digital magazines over print magazines" actually suggests that people really don't like tablet magazines.

"23% of tablet users prefer digital magazines on tablets over print," says a blog post from Mequoda about its new study "How American Adults Consume Magazines on Tablets." The blog post and trade-media coverage interpret the data as meaning that tablet magazines are about to enter a boom period.

But here's the real news: Three-fourths of U.S. tablet users do not prefer digital magazines to print magazines. Read that sentence again: It doesn't say three-fourths of U.S. Luddites or of adults or of magazine readers; it says three-fourths of tablet users.

Isn't that a bit like people with Blu-Ray players preferring to watch VHS tapes?

In the same study, 51% of tablet users prefer streaming video to broadcast and 39% prefer e-books to printed books.

Yes, tablet use is growing. Mequoda found that a majority of U.S. internet users have access to a tablet. And yes people are learning to do more and more with them. Tablets are displacing laptops for many people.

But tablet owners apparently haven't fallen in love with reading magazines on their tablets.That may be why Newsweek has reportedly gone from 1.5 million subscribers to 470,000 less than six months after dropping print to go digital-only.

Despite all the hype about iPads and Kindles, U.S. magazine publishers are making far more money on the web and generally wondering when their tablet investments will pay off.

In fact, though no one seems to talk about it, the real game-changing technology for subscription magazines has been browser-based editions -- that is, digital replicas that can be read on any computer. Many a B2B publication has shifted 50% or more of its subscription base to these simple page-flip editions, but few print-and-digital publications get even 10% of their circulation from tablet editions.

Other recent Dead Tree Edition commentary on the magazine industry includes:

• My Heartfelt Apology to the Publishing Industry  
• How Google Is Becoming the Magazine Industry's New Best Friend  
• What Magazine Publishers Can Learn From "The Da Vinci Code" Giveaway

FSS Postage Pricing Will Affect Magazines, Catalogs, and Printers

The U.S. Postal Service’s growing confidence in the troubled Flats Sequencing System may lead to an overhaul of postal rates and significant changes at printing plants in January.

Postal officials have said recently that they plan to implement new postage rates for the Standard and Periodicals classes (and perhaps First-Class Mail) early next year that include “an FSS pricing structure.” Details have not been released, but discussions indicate the plan will include significant incentives for mailers to create FSS-optimized bundles for ZIP codes served by the giant machines while continuing to make traditional carrier-route and 5-digit bundles for non-FSS areas.

A Flats Sequencing System machine

The move would take aim at a major reason the $1 billion-plus FSS investment so far has increased USPS’s mail-handling costs more than it has reduced delivery expenses: The vast majority of flat mail is still prepared in the traditional manner, which creates extra preparation work at FSS facilities.

Most Standard and Periodicals class flat mail is currently placed in carrier-route bundles, with each bundle containing pieces destined for the same carrier route. A Periodicals carrier-route bundle may have as few as six magazines or newspapers and be only a fraction of an inch thick.

An FSS-optimized bundle, by contrast, is at least four inches thick and contains pieces from multiple carrier routes and often from multiple ZIP codes. That will mean far less handling prior to loading mail into the FSS, but also introduces a new risk: FSS machines have no “Plan B”.

Working traditional bundles on an FSS machine is somewhat inefficient but still works. The converse is not true, however. If the machines break down or are otherwise over capacity, there is no easy way to shift FSS-optimized bundles and pallets to traditional processing.

In recent meetings, such the Mailers Technical Advisory Committee (MTAC), postal officials have described the extensive work they have put in to making the FSS machines more reliable and predictable – such as studying and standardizing best operating practices, tweaking the equipment, and implementing more aggressive preventive maintenance.

Making larger bundles should increase bindery and co-mail efficiency for printers. But now they will also have to follow two very different sets of rules for bundling and containerizing flat mail – a new rule set for FSS ZIP codes and the current rules for non-FSS zones.

The FSS rules and pricing may end up being optional next year, but the incentives are likely to be high enough that commercial printers will not be competitive for producing catalogs, magazines, and circulars unless they can follow the FSS rules.

Related articles:

• USPS Admits FSS Is Losing Money  
• So Far, FSS Is A Step Backward, USPS Data Indicate  
• Flats Litigation System: USPS and Vendor Battling It Out Over Huge FSS Machines

How Google Is Becoming the Magazine Industry's New Best Friend

After siphoning off billions of dollars that used to go to print advertising, Google’s practices in recent months have provided a huge boost to many magazine publishers. The search giant is about to provide even more help for publishers' web sites -- except perhaps for those that have jumped onto the “native advertising” bandwagon.

Google revealed this week that it is close to deploying “the next generation of Penguin.” The original round of Penguin algorithm updates last year ruined some spammy web businesses but apparently jacked up search-related traffic to the web sites of many legacy publishers.

“We expect it to go a little bit deeper and have a little bit more of an impact than the original version of Penguin,” said Google executive Matt Cutts. “We’re doing a better job of detecting when someone is sort of an authority in a specific space . . . and trying to make sure that those rank a little more highly,” he said in a video released Monday.

He made no specific reference to legacy publishers. But with Google’s continuing bias toward bylined articles that are written by subject-matter experts, “Penguin 2.0” sounds like good news for magazine publishers that are active on the web (and who isn’t these days?).

Cutts’ advice to those preparing for Penguin 2.0 certainly shouldn’t scare traditional publishers, who for the most part have never really learned to write for bots because writing for real people is in our DNA: “Try to make sure you make a great site that users love, that they’ll want to tell their friends about, bookmark, come back to, visit over and over again, all the things that make a site compelling,” he said. “As long as you’re working hard for users, we’re working hard to try to show your high quality content to users as well.”

Upended by Penguin and Panda
In the past year or so, Google’s Penguin and Panda updates have already upended best practices for search-engine optimization (SEO), putting the kibosh on sleazy tactics like keyword stuffing and questionable links.

“It’s 2013 – nobody wants to read SEO content, not even the search engines,” says a recent infographic created by ContentVerve called SEO Copywriting:10 Tips for Writing Content That Ranks in 2013”. “Everything points to the fact that Google prefers natural content to obvious SEO stuff.”

ContentVerve’s tip #5 should warm the hearts of magazine publishers and other organizations with high standards for their web content: “Write LONG, in-depth, quality content. The average web page ranking on the first page of Google has over 2,000 words. Moreover, evidence points to the fact that in-depth articles get more shares and links than short, superficial ones.”

18 million experts
It’s no wonder that so many publishers have been celebrating record traffic to their web sites lately. And it’s no wonder that non-publishing companies are spending more and more dollars on content marketing that mimics the look, feel, and articles of traditional publishers’ web sites.

(Unfortunately, this trend means that the 18,134,377 self-appointed SEO experts in the U.S. who morphed into 18,134,377 self-appointed social-media experts are busy transforming/rebranding themselves into 18,134,377 self-appointed content-marketing experts.)

Cutts also warned that Penguin 2.0 will address native advertising (a term open to much debate and interpretation), especially for paid promotions made to look like editorial content.

“Now there’s nothing wrong inherently," he said, "with advertorials or native advertising, but there should . . . be clear and conspicuous disclosure so that users realize that something is paid, not organic or editorial.”

For further reading:

• Cheesy porn: For a truly amazing look at how sleazy web sites can still game the search engines, be sure to check out Digiday’s recent expose of non-porn sites using sex-related searches to drive traffic to their sites: . Don’t miss the image of Velveeta sponsoring gang rape videos, a classic fail that belongs in the Marketing Hall of Shame. (Yes, it’s possible Kraft is trying to turn Velveeta into more of an “adult” product, but the porn experts I checked with were not aware of any pasteurized prepared cheese products being used in porn videos. One of them with an overly active imagination did, however, manage to dream up a plot for a proposed video to be called “Velveeta Spread.”) 
• Craze-y: Dead Tree Edition recently examined why content marketing has become so popular among non-publishing brands in Publishing Without Profits: What's Behind the Content Marketing Craze? Content marketing could become a real threat to traditional publishers, except right now most of it sucks. 
• Thank you, oh large Chinese marsupial: Google’s first Panda algorithm update, in 2011, had an immediate favorable impact on the number of visits to Dead Tree Edition: The Google Panda Update Is a Change I Can Bear. Since then, this site’s search-related traffic continues to grow despite its criticism of Google’s greenwashing.
• A tale of two bit.lys: Publishing Executive has a related article I wrote about how the non-magazine ventures of many magazine publishers are thriving. I also shamelessly rip off Charles Dickens.

USPS Backs Off From Price-Hike Gambit

The U.S. Postal Service is apparently backing away from an attempt to use one-time payments to mailers as justification for permanent price increases.

As Dead Tree Edition reported last month, USPS proposed to offer large mailers a one-time “Technology Credit” and then to have those credits considered a price decrease for purposes of calculating its inflation-based rate cap. That would result in permanent price increases that would eventually cost mailers far more than the maximum $5,000 credit per mailer.

USPS clarified – or changed – its position this week in response to questions from PRC Chairman Ruth Goldway:

“Revenue forgone from the Technology Credit Promotion for each class of mail will be subtracted from revenue in calculating price cap authority in the upcoming annual price change, and then the same amount will be added back to revenue in calculating price cap authority in the subsequent annual price change,” USPS wrote. In other words, any price increases resulting from the Technology Credits would be temporary.

I’m told that postal officials have claimed during a meeting with mailers that the Dead Tree Edition article misinterpreted the price-cap issue. But several private-sector postal experts have told me they agreed with my interpretation of the Postal Service’s original request, which said nothing about reversing the price increase. And Goldway apparently agreed as well.

“The Postal Service appears to propose the creation of permanent price cap authority,” Goldway wrote to USPS last week. “However, the Technology Credit Promotion is proposed as a temporary, one-time offer. How does the Postal Service intend to reflect the expiration of the Technology Credit Promotion in subsequent . . . rate adjustments?”

The PRC’s Public Representative staff had a similar interpretation, warning the commission about “the danger of creating permanent price cap authority from temporary price reductions” because that could lead to “price cap avoidance tactics.”

USPS estimates it will pay out $61.6 million (down from the original $66 million estimate) in Technology Credits to major mailers that use the Full-Service barcodes during the 12 months that begin June 1. Both Goldway and the Public Representative noted that USPS’s original filing did not show how the payouts were calculated.

In fact, the Public Representative indicated that USPS tried to game the system by presenting “bare bones initial filings without the data necessary to evaluate its request,” making it difficult for anyone to challenge the proposal before the PRC must decide the case.

The Postal Service has already admitted to significant math errors in that initial filing. It now estimates the potential price increase for Standard mail will be 0.231% instead of 0.158% and for Periodicals will be 0.165% instead of 0.244%. It also tweaked the estimated increases for First-Class Mail (0.084%) and Package Services (0.015%).

Because the PRC is requesting so much additional information from USPS on the proposal, it has extended the deadline for commenting until May 17.