Sunday, November 17, 2013

A Funny Thing Happened on the Way to the Funeral of Print Media

Web publishers launching print magazines, e-book sales plateauing, slow adoption of tablet magazines, and now a profitable U.S. Postal Service: Whatever happened to the death of print?

I recall a magazine editor parading around the office in 2009 and announcing, “Print is dead.” Sure, I recognized it as the exaggeration of a middle-aged journalist trying desperately to prove he was hip to the digital age.

Still, it looked as if he had the basic trend nailed. Although I’m a print guy, I had to admit that within a few years – say, 2013 – print would probably be well along the road to Buggy Whip Lane.

A CueCat, from the author's personal collection of Magazine Failures
But 2013 is turning out to be the year that print media didn’t die. Let’s take a look at some recent events:

Postal profits
The U.S. Postal Service revealed Friday that it was profitable in the year that ended on Sept. 30. OK, the official news release says USPS lost $5 billion, but that included a $5.6 billion payment for pre-funded retiree health benefits that it skipped.

Such payments are in reality low-interest loans to the federal government that mask some of the federal deficit. They're a vestige of the era when USPS was the government’s cash cow.

The $5.6 billion is not truly an expense, and the retiree-benefits shenanigans are so politically controversial that the missed payment will probably be written off. USPS's cash position is still precarious, but better than it was.

The return of junk mail
It wasn’t just downsizing that led to a successful year for the Postal Service. The volume of Standard mail – such as direct mail, catalogs, and promotional flyers – increased 1.8%. Wasn’t everything supposed to have shifted to email promotions and online ordering by now?

Web to print
This month has already seen the launch of two significant print magazines, Allrecipes and Politico, from brands that were previously web-only. That’s the perfect rebuttal to Michael Wolff’s recent analysis for The Guardian, in which he asked, “What is the business basis for print? In fact, is there any reason print should exist?”

If Michael put a bit more effort into looking at actual data and less effort puking up vitriol all over Time Inc., he would know the answer: For most magazine publishers, print is still where the money is.

When I headlined an article early last year Are E-Book Sales Reaching a Plateau?, many laughed off the article as wishful thinking from a print dinosaur even though it was based on an objective study.

But three weeks ago, Digital Book World wrote, “Once thought destined to reach 50% or 80% of all book buying and reading in the U.S., ebooks have stalled out on their way up to higher altitude.”

And more recently Mike Shatzkin, one of the leading commentators on the digital transformation of the book industry, actually used the P-word: “Recent evidence suggests that ebooks have hit either a point of serious resistance or a temporary plateau.”

I got similar blowback for this year’s article A Troubling Sign for Tablet Magazines?, which pointed out a study showing that three-fourths of U.S. tablet owners prefer print magazines to digital editions.

Many articles have subsequently come out about the surprisingly slow adoption of tablet magazines and the struggles publishers are having with selling digital subscriptions.

“Apple is a fickle partner,” Jasper Jackson recently wrote, citing various challenges for magazine publishers. "Until these issues are dealt with, or a genuinely credible competing platform emerges, digital magazine marketers will be working with one hand tied behind their back.”

Print still struggles
Don’t get me wrong: Not all is well in the world of print media. The Web is driving most daily newspapers to the point of extinction. (I’m not na├»ve enough to think Jeff Bezos’ purchase of The Washington Post is a vote for print. Methinks his long-term vision for that hallowed journal doesn’t have much to do with putting ink on paper.)

With the continuing decline of profitable First Class mail and a Congress that can’t pass any meaningful reform, the U.S. Postal Service is still on the ropes.

Newsstand sales are still declining at about 10% annually. Retail chains keep reducing the space devoted to magazines even though it’s their most profitable category. Dysfunctional sales channels, you see, are not Apple’s invention.

So don’t expect people to ditch their laptops and smartphones, dig their typewriters out of the attic, or revert to sending handwritten letters instead of texts and emails.

Digital substitution of print will continue, but it won’t always be at the steady or exponential rates the pundits predict. An unsustainable trend cannot be sustained, and inevitable changes often turn out to be quite evitable.

A few digital innovations are immediate game changers. Some need years of refinement to catch on. (Perhaps digital magazines are in this category.) And others burst onto the scene with much buzz but soon go the way of Friendster, PDAs, and the CueCat.

As for that editor who proclaimed four years ago that print is dead? He was recently heard proposing the creation of a new print product.


Tim Hennings said...

The funeral is underway for one-size-fits-all print publications, such as major newspapers or big catalogs. But niche publishing is growing. At least that is what we are seeing in B2B. Businesses are making smaller, more focused catalogs that are relevant to particular niche markets. And a niche can be as narrow as a single customer. Some businesses are enabling their sales reps and dealers to easily create custom print catalogs for their own accounts, per this article. Print is not dead, it is changing in some very interesting ways.

Anonymous said...

Nice piece with really excellent points. I think print is becoming a luxury component for many publishers--something to complement the digital products.

One thing: Politico was not a Web-only publisher. They have been offering a print product for political insiders all along. Sort of a newspaper/newsletter-type product.

Unknown said...

Thanks for sharing. V cool article. Read the Politico mag just yesterday.

Unknown said...

I suggest to all of you for the discussion, for reflection and for strengthening your own position in the business of my thesis project for the restructuring of the print media on the concept of the 21st century.
1. Print media in the 21st century are a new concept that is different from the concept of the 20th century.
2 . The concept of print media of the 21st century is diametrically opposed to the concept of the print media of the 20th century.
3 . Print media of the 21st century are at least a dozen of advantages over the internet .
4 . Business print media of the 21st century is the gold business .
5 . Business print media of the 21st century is the " ostrich ", which lays only the golden egg.
6. The concept of the print media of the 21st century after its introduction (with the help of my project) multiplies the demand for print media several times.

Anonymous said...

Print pining for the fjords?

Anonymous said...

The success of daily newspapers over the past 20 years or so has been limited competition. The opposite has become the problem for digital news: too many news outlets with not enough advertising revenue to go around. It's as old as supply and demand.
Our weekly newspaper (the Chesterfield Observer in Chesterfield County VA) has grown in circulation by 57% to 70,789 since 2006 while total revenue has increased 139%. Of that total, just 1% is digital. Print isn't dead for us.
In the meantime, since we use bulk mail, we're keeping USPS in business.

Thad McIlroy said...

Good entry: always enervating to get some good news around print.

I do however challenge your assumptions around the ebook plateau. It's starting to be a widely-held belief, but personally I think it's hokum. Print sales are certainly not "plummeting" in traditional book publishing, but they do continue their graceful decline. Meanwhile ebook penetration is under-reported as I discuss here:

Evans Graphics said...

Print will never die, fashion and trends change but there will always be a market for printed publications. Some people prefer electronic devices other prefer printed. Simple.

Ally Byers said...

Surely so much of it is to do with digital media not quite yet finding a perfect delivery style? Tablet mags still feel a bit clunky, PDF-style docs are terrible, but straight web pages aren't as visually pleasing. Once someone latches onto an ideal style, maybe print really will be done......

Cathy said...

CueCats can be turned into bar code scanners -- that is, if you don't have a scanner app on your phone already. :)

Jim Elliott said...

I agree with much of D. Eadward Tree's article, especially his comments about magazines. Today we learned that Newseek's new owners--digital guys no less-- plan to bring back a print version. As Tree says, "For most magazine publishers, print is still where the money is."

My company handles all advertising sales for many publishers, and we have helped several make the transition to digital sales. However, in most cases, print still pays the bills. And, as the market continues to recover, it appears that this trend will continue.

Jim Elliott, President
James G. Elliott Co., Inc.

Tom Harvey said...

Print is still quite relevant, it's just different. When combined with other channels it is more powerful than ever. Go check out the IKEA catalog for 2014 that uses Augmented Reality to place virtual furniture in your house! Very cool