Sunday, December 18, 2016

Anxious Times for Magazine Publishers?

From the Twitter account of @crayonelyse
Those of us in the magazine industry – uh, magazine-media industry -- like to point out that we’re not going the way of newspapers because we’re better at handling digital disruption.

But our friends in book publishing aren't persuaded.

The description of a session at the Digital Book World 2017 conference about thriving “in an area of constant change” concludes: “Maybe things aren’t so bad: Just look at the newspaper/magazine publishing industry!”

Humph, as if we're part of the same industry as newspapers!

Nor is the U.S. Census Bureau persuaded: It reports that, during the first nine months of 2016, revenue for magazine publishers declined 4.4% while newspaper publishers were down only 3.1%.

Hey, but at least our Facebook Likes are growing. And we're not changing the names of our companies to something that "sounds like the noise an ejaculating elephant makes."  

Related articles:

Sunday, November 27, 2016

Never Stamps: A $3.5 Billion Postal Subsidy

Nov. 30 update: Linn's Stamp News quoted a postal official as saying that the "breakage" for Forever Stamps is only $2.4 billion, not $3.5 billion. So somehow I must have misinterpreted one of the USPS's obtuse financial reports from previous years. The official's statement means that nearly half of that breakage was recognized in the three years since the previous time the USPS adjusted its calculations -- which suggests that postal officials either underestimated Americans' lack of organization or their passion for stamp collecting!

Way to go, Americans: Your sloppiness, forgetfulness, and hoarding are helping to prop up the struggling U.S. Postal Service.

Based on new data about its customers’ behavior, the USPS recently added $1.1 billion to its estimate of how many Forever Stamps it has sold that will never be used for postage. These “Never Stamps” now total about $3.5 billion, according to a Dead Tree Edition review of previous USPS financial reports.

That’s out of $48 billion in sales from the Forever Stamp’s introduction in April 2007 until the end of Fiscal Year 2016 on September 30, the USPS reported (page 16 of this PDF).

In other words, for every 14 Forever Stamps sold, one will be – or already has been -- eaten by the dog, dropped into a mud puddle, accidentally thrown out, lost in the seat cushions, hopelessly stuck to another stamp, left in that pairs of jeans in the washer, used in an art project, placed into a stamp album, or otherwise diverted from becoming postage.

When you buy a sheet of stamps, the Postal Service treats the money as “deferred revenue”: It gets the cash immediately, but accounting rules say it can’t book the money as actual revenue until the stamps are used to send mail.

The USPS, however, has no way of knowing when those stamps are used or when they become unusable, so it calculates a “breakage factor” that estimates how many stamps have been lost, destroyed, or placed into collections. The USPS didn’t release details of its latest breakage-factor calculation, except that it was based on a revised “estimation technique” using “new information regarding customers’ retention and usage habits of applicable postage.”

But I’d say it means you need to check the nooks and crannies of your desk, scour your purse, and shine a flashlight under the driver’s seat for Never Stamps that could become Forever Stamps. Or maybe you should just take the patriotic route and not bother, knowing that your carelessness is helping to support an iconic American institution.

Related articles:

Tuesday, November 15, 2016

The Postmaster General's Salary: $286,000

The chief executive of the U.S. Postal Service was paid less than one tenth of what her counterparts at competitors UPS and FedEx received last year.

Postmaster General Megan Brennan's salary during Fiscal Year 2016 was $286,137, the USPS revealed today in a financial statement (Page 72 of this PDF). The total value of her compensation was $904,784, mostly from a nearly $600,000 increase in the value of her pension (perhaps because she reached 30 years of service with the agency).

David P. Abney, UPS's CEO, received $11.3 million in compensation during 2015, including more than $1 million in base pay, $633,000 in bonuses, and a whopping $7.9 million worth of company stock.

Frederick W. Smith, Chairman and CEO of FedEx, earned nearly $1.3 million in base pay, $7.4 million in bonuses, and $7.6 million worth of stock options in a compensation package that totaled $16.8 million in the company's 2016 fiscal year.

Of the five highest-paid executives in each of the two private companies, none earned less than $2.7 million in total compensation. Three of the top five at the Postal Service earned less than $400,000.

The USPS's top five also average 26 years of service with the agency. That's no wonder: The Postal Service couldn't pay a middle manager from UPS, FedEx, or another major corporation enough to take a top position at the agency, so its executives are mostly lifers who came up through the ranks.

Brennan is one of the highest-paid federal employees, but not the highest. The President of the United States gets a $400,000 base salary, free housing, domestic help, a personal chef, use of a really cool jet -- and upon retirement a huge pension and an even huger library.

Related articles:

Tuesday, November 8, 2016

This Magazine Subscription Has No Co-Pay

Most industries have lots of creative people who focus on how to sell the companies' products and services.

But in my industry, magazine publishing, some of the most creative work goes into figuring out how to give our products away.

Many people enrolled in employer-sponsored health insurance plans run by Aetna received an offer last week that may have looked too good or too unrelated to health insurance to be true: a free one-year subscription to the print edition of Better Homes and Gardens magazine.

For magazine-industry veterans, however, the only mystery is why Meredith, the publisher, limited the offer to the first 1,500 takers. The subscriptions were quickly snapped up; Aetna enrollees who didn't act fast enough  are being offered a free digital edition of a Better Homes and Gardens cookbook.

Most consumer publishers still make more from selling ads than from selling magazines. And their ad-sales strategy typically includes a ratebase -- a guarantee that a minimum number of copies of each issue will be sold or otherwise distributed to consumers.

A magazine that misses ratebase, even for one issue, may have to issue refunds to advertisers and to counter doubts about its viability and "wantedness."

The challenge for publishers is that, though people still like magazines, they are reluctant to shell out money to buy them, saying "I'll just read the articles online." (A magazine subscriber is worth orders of magnitude more in ad revenue than is someone who visits the publisher's web site once a month.)

Long before Al Gore invented the internet, magazine publishers honed the art of meeting ratebase without actually receiving money for the magazines -- by delivering to hair salons and doctors' waiting rooms, letting people use frequent-flyer points to subscribe, and offering huge commissions to independent agents.

Competition from digital media has made print advertising less lucrative, forcing many publishers to reduce their ratebases and to eliminate such lavish schemes as negative-remit subscriptions (where the agent's commission is higher than the subscription price).

But digital media and digital editions of magazines are also opening the door to new methods of giving away our magazines in ways that will pass muster with the circulation auditors. Not to mention new methods of getting people to renew their subscriptions once the freebies expire.

Related articles:

Sunday, October 16, 2016

New Postal Rates Will Benefit Some Publishers and Printers

Mail that's been sorted by an FSS machhine.
A quiet boycott by some mailers helped persuade the U.S. Postal Service to change how it charges for publications, catalogs, and other flat mail.

As a result, many mailers will pay lower postage bills next year, printers will earn more money from their co-mail programs, and the USPS is likely to benefit as well.

The USPS announced on Wednesday average rate increases of slightly less than 1% for First-Class, Standard, and Periodicals classes, to take effect on January 22. But some customers, including the most efficient mailers of magazines and catalogs, will apparently see their postage bills drop.

The new rate structure will do away with a change first introduced a year and a half ago – separate Standard and Periodicals rates for ZIP codes served by the Flats Sequencing System. FSS rates are higher than rates for non-FSS pieces that are in carrier-route bundles but lower than other non-FSS rates. There was a logic to the separate FSS rates, but they backfired for the USPS.

“Many mailers who previously paid Carrier Route rates for their FSS volume experienced an above average price increase after the new rates were introduced in May of 2015,” the Postal Service said in explaining the new Standard Class rates.

Rate change led to partial boycott
“Since then, FSS volume has declined faster than the volume in other categories of flat-shaped mail” because catalog companies “have significantly curtailed the number of pieces sent to potential new customers (prospecting pieces) in FSS zones. Additional feedback indicates that other flats mailers may be engaging in similar cost mitigation strategies to avoid sending certain pieces in FSS zones.”

Periodicals mailers have little opportunity to engage in similar FSS-avoidance schemes. But publishers, like cataloguers, were talking of legal action a few months ago to prevent the Postal Service from shifting more ZIP codes to FSS, arguing that would in essence be an illegal rate increase.

The new rates would eliminate that controversy. Standard and Periodicals rates will be identical in FSS and non-FSS ZIP codes, so the USPS can move forward with shifting more areas to FSS without pushback from its customers.

The additional volume is exactly what postal officials say the giant FSS machines need to run efficiently. And by restoring some of the incentives to co-mail, the new rate structure should result in flat mail being presented to the USPS in more efficient packages and closer to the point of delivery.

One  failure, one success
Two major investments have been made this century in reducing the costs of handling and delivering flat mail pieces – USPS’s $1.4-billion Flats Sequencing System and the publication-printing industry’s massive expansion of co-mailing.

The FSS so far has failed. But co-mail – consolidating mail from a variety of customers in a way that reduces both the mailers’ and the Postal Service’s costs – has been a huge success.

Such a success, in fact, that it has undercut the ROI of FSS. Thanks to co-mail, more than 70% of flat Standard and Periodicals mail going to non-FSS zones is in carrier-route bundles, up from less than 50% when FSS was first planned. That means much of the Postal Service’s expected savings from FSS have already been achieved via co-mail.

By reducing the incentives to co-mail, the FSS rates actually undercut what the printers achieved. But the January rate structure will restore and actually enhance the incentives to co-mail.

For example, the Periodicals piece rate for copies that are in carrier-route bundles will not change, but the rate for copies in the next-best category will rise by more than 3%. That means the minimum savings from promoting a copy to carrier route will rise from 9.8 cents to 10.7 cents. Printers that use co-mail and other techniques to bring about such shifts typically get a share of their customers’ postal savings.

For publishers that have a high percentage of copies in carrier-route bundles, the savings from eliminating the FSS rates will outweigh the higher rates for less efficient copies – resulting in lower average postal rates.

The picture for Standard flats, such as catalogs, is more complicated. But again it appears that the incentives to improve mail sortation will be greater and that the most efficient mailers will enjoy lower postal bills.

Related articles:

Wednesday, September 28, 2016

USPS Will Continue Dabbling in Grocery Deliveries

The U.S. Postal Service got the go-ahead today to continue trying out the grocery-delivery business for another year so that it can experiment with different pricing and service models.

The USPS told the Postal Regulatory Commission that it's still trying "to determine the operational feasibility and the desirability of making Customized Delivery a permanent product." The PRC approved an extension of the two-year market test for a third year, through October 2017.

"The Postal Service asserts that it has not yet gained sufficient insight into the marketplace in different metropolitan areas to evaluate Customized Delivery’s long-term demand and market pricing," the PRC said in today's ruling.

Postal officials said they were planning to expand the service to additional markets but haven't decided which ones. Current markets served are San Francisco, Los Angeles, San Diego, New York, Sacramento, Stamford (CT), and Las Vegas.

In most cases, Customized Delivery is acting as a delivery arm for AmazonFresh, which Amazon is offering in additional cities without the Postal Service's involvement.

The typical operation seems to involve Amazon dropping off totes full of groceries and other packaged goods to USPS Destination Delivery Units (DDUs), where non-career City Carrier Assistants in turn deliver them early in the morning to customers' doorsteps.

Related articles:

Saturday, July 30, 2016

What Does the Third Law of Plumbing Have To Do With Publishing?

Hard at work in the Production Department
Some of my fellow magazine production managers have been known to quote the First Three Laws of Plumbing: 1) Hot on the left; 2) Cold on the right; 3) Shit don’t run uphill.

It’s the Third Law of Plumbing (our Publishing Word of the Day) that we find especially relevant: You can fling around fancy words like collaboration and workflow, but eventually everything – editorial content, ads, subscriber files, etc. – ends up in the production department, also known as the manufacturing or operations department.

If there’s human fecal matter in the flow, guess who gets to clean it up. While still meeting all the deadlines. And the budget.

I’ve seen savvy operations departments find clever ways to save small fortunes and create new lines of business. And I’ve seen dysfunctional ones miss huge savings opportunities and bring publishers to the brink of ruin.

With print publishing on the decline, you’d think all of us production dinosaurs would be nearly extinct. And, in fact, a lot of good production folks have left the business.

But understanding how to get stuff from one end of the pipeline to the other also gives us a career advantage: In a notoriously siloed industry, where each department typically has a myopic focus only on its own part of the business, someone who knows how to get everything flowing together can be valuable.

It’s no wonder that our industry’s most notorious pundit, BoSacks, is a production guy (not to mention yours truly): Nowhere else are you forced to learn as much about what goes on in the other publishing silos.

Know the flow
Knowing the flow has become more valuable as the shift into multiple media have made magazine – forgive me, magazine-media – publishing more complex and less compartmentalized. Already accustomed to wearing multiple hats and tackling new technologies, I’ve seen some production colleagues morph into roles like web design, email marketing, and data analytics that seem far removed from their dead-tree beginnings.

And never has the need to knit together the various, and growing, publishing disciplines been more critical.

“You can’t always have every relevant department represented in a discussion, so I often find myself looking out for the interests of the missing ones,” says a colleague. “The advertising people think I’m a circulation expert. I’m not, but in the land of the blind the one-eyed man is king.”

Digital publishing products likewise have employees at the end of the pipeline, with a wide variety of titles, who know the Third Law of Plumbing all too well. They too try to keep things flowing while praying that the next flush of content or data won’t overwhelm them with icky brown stuff.

You can create as much native this and responsive that as you want. But the people who can actually knit all that fancy-ass stuff together, make it comprehensible, and then actually implement it are priceless. And, like my production colleagues in the ink-on-paper world, they're largely unsung.

This article is part of our continuing Publishing Word of the Day series, which explores new and obscure terms that will help you make sense of the contemporary content-peddling business. Yeah, we promised one article every day this month, but it's gotten a bit nasty down at our end of the pipeline, so we're extending the series into August. And, who knows, maybe September.

Previous Dead Tree Edition looks inside the magazine industry include:

Monday, July 25, 2016

S&M Marketing: Welcome to the Echo Chamber

Baiting the S&M marketers. It worked.
This weekend, I discovered a fast, easy, and basically useless way to gain new Twitter followers.

Despite having more than 900 Twitter followers, my tweets these days often seem to disappear into thin air, with seemingly no one noticing.

But it’s different when I use the hashtags #SocialMediaMarketing or #ContentMarketing.

For those, the audience and “engagements” (follows, retweets, likes) are roughly four times normal. And all that action seems to come from the practitioners of those two over-hyped marketing methods, even when I’ve trashed them and their kind as charlatans.

So I conducted an experiment on Saturday:

Hypothesis: Using both hashtags in a single tweet will generate lots of new followers, regardless of what the tweet actually says.

Experimental Method: I sent the “basically sucks” tweet you see here on Saturday, followed a few minutes and five new followers later by the “robo-followers” retweet.

Results: In the next 48 hours, I picked up 27 new Twitter followers, almost all of them self-described social-media (S&M, for short) marketers or content marketers (CMs). (Or both, God help us.) I rarely get more than one new follower per day. I was added to two Twitter lists, which basically never happens. And both the tweet and retweet are still getting additional likes.

Conclusion: Hypothesis confirmed. A lot of S&M marketing consultants’ idea of marketing is to set their Twitter accounts to robo-like any tweet about S&M marketing and to robo-follow the sender. The same goes for CMs.

Testing the conclusion: Come “join the conversation,” as the S&Ms like to parrot: Try this experiment yourself -- preferably with a tweet about this article -- and see what happens. Of course, the likers won’t actually read your tweets and the followers won't look into who you are before following you.

ISIS could tweet “Hitler is God #SocialMediaMarketing” and I swear these Pavlovian sleazeballs would follow.

What this means is that any idiot can set himself (they’re usually men) up as an S&M marketing expert and immediately gain cred by racking up a host of followers from the S&M echo chamber. And look, Mr. Unsuspecting Client, every time our expert tweets, he gets lots of likes and even more followers. Wow, he must really know S&M marketing. (He ought to, as much as he tweets about it. But what can he actually do for your business?)

So what does robo-following, our Publishing Word of the Day, have to do with publishing? The S&M marketing and CM hype networks have for the most part set themselves up as enemies of advertising-supported publishing. (“Why do you need to pay for advertising? Everyone is on Facebook. So just let us set up a Facebook page for you. It's free -- except for our fees.”)

Some of what publishers offer, such as native advertising, is arguably content marketing. The CM purists, however, will have none of that, insisting that Paid Media doesn’t count, that CM marketing must be free. (“But pay me within 15 days or your blog is toast.”)

Don’t get me wrong: Not all S&M marketing and CM are a useless waste of time and money. Just the vast majority.

Set your social-media accounts to robo-follow Dead Tree Edition’s 31-part Publishing Word of the Day series, which explores such useful new terms as Facehumping and denialsizing.

Saturday, July 23, 2016

Publishing's Invasion of the Monitor Lizards

"It looks fine on my monitor."
Magazine publishers' moves into digital media have spawned a new type of monster -- the monitor lizard.

"It looks fine on my monitor" are the favorite words of monitor lizards. Our Publishing Word of the Day describes designers hired for their digital-media chops who find themselves creating work for an unfamiliar medium, print.

These reptiles don't understand that what appears on their screens is a somewhat idealized version of what will happen in print. They don't realize that, without a few simple precautions, that beautiful page they created could turn to disaster.

I'm sure the infographic excerpted here from a section front of The Wall Street Journal, with a blurry "France" and nearly illegible "Germany," looked stunning on the designer's Mac. But the mess that resulted should have been no surprise: Small "knockout" (white) type atop a multi-color background is a recipe for disaster.

Blurry "knockout" type in The Wall Street Journal
It's one thing when the lizards are inhouse, where the production director has (some) credibility and can show the designer that printed colors don't usually "register" (align) perfectly.

You can eventually get them to understand that, because the printing and trimming of pages are somewhat imprecise, there are industry standards and a few basic tricks they have to keep in mind.

But now the monitor lizards have invaded the advertising business. These poisonous reptiles seem to have taken over the entire design and production functions at some small and even medium-sized ad agencies. Clients are paying these agencies good money to do something they have no clue how to do -- create magazine ads.

I find myself increasingly having to reject  ads for the most basic of problems -- like PMS colors in what's supposed to be a four-color ad, lack of bleed, and failure to include crop marks. Sometimes it's just carelessness, but often I have to explain some real Print 101 concepts to the agency personnel so that they can fix the ad.

And sometimes we just say, "Screw it. We'll add the crop marks ourselves."

Other articles in which Mr. Tree has gotten his print geek on include:

Friday, July 22, 2016

Adrift for 19 Months: The U.S. Postal Service

If you want to understand why the U.S. Postal Service seems so dysfunctional, look no further than its governing board.

If you can find it.

The USPS Board of Governors is a ghost ship (our latest Publishing Word of the Day), set adrift 19 months ago when its vacancies outnumbered its members. Now it's down to three members -- the Postmaster General, the Deputy Postmaster General, and a former Congressman -- and eight vacancies.

The USPS has become "another front in the lasting conflict between the White House and Congress over the appointment process," writes the R Street Institute, a think tank that apparently first applied the ghost ship moniker to the USPS board.

Before it lost its quorum, the board appointed the remaining governors as a Temporary Emergency Committee to guide the nation's second-largest employer.

"There is a question about whether the courts would hold this valid, but no one has challenged it," Chairman James Bilbray, the lone independent member, has been quoted as saying. "We can't function. We can continue to deliver the mail for now but we can't do the things we need to do. We can't change policies or make major purchases like a new fleet of trucks. There could be lots of problems."

And with PMG Megan J. Brennan and Deputy PMG Ron Stroman holding a majority of votes, it's nearly impossible to institute any changes or restructuring of USPS's top management.

Feel the Bern
Congress has not filled a vacancy on the board since 2010. Multiple reports indicate the hold-up is Sen. Bernie Sanders, I-VT, who has reportedly blocked President Obama's nominations to protest the closing of some USPS processing and distribution centers.Or perhaps he thinks President Trump will appoint members more to his liking.

In any case, the Postal Service is "Berned": The Senate's arcane rules don't allow it to approved a nomination that a single senator has placed on hold.

For those of us in the magazine industry, it's quite comforting to know that we're turning over, oh, 80% or so of our copies to an organization that is so neglected by its Congressional overseers. And I'm sure the 630,000-plus USPS employees just love working for such a political football.

In honor of the magazine industry's largest vendor, Dead Tree Edition's Publishing Word of the Day series includes such USPS-related terms as inadvertent, cap carping, and U.S. Parcel Service.

Thursday, July 21, 2016

What in the World Is Social Media Marketing?

We needed a study to know that?
Social media marketing is the practice of paying a bunch of Millennials to play around all day on Facebook in ways that put your company's reputation at risk.

It doesn't actually generate any sales, but it does get your brands plenty of "likes," which is even cooler. Unless you have to pay the bills.

But social media marketing (our Publishing Word of the Day) does gain you the approval of the thousands upon thousands of social media marketing consultants whose recommended solution to every problem is -- get this -- social media marketing.

The great thing about social media marketing is that it doesn't involved "paid media" -- AKA advertising. It's free. Sort of.

I  know of a financial-services company that kept an entire team at its marketing agency busy running its Facebook page -- which had about 400 followers. Because the client was heavily regulated, every post had to undergo thorough legal review.

There was nothing especially original or share-worthy about the page. It mostly called out and linked to articles on various publishers' web sites -- articles that were relevant enough that anyone clicking through usually saw an ad for at least one of the client's competitors.

But not the client's ads: It had no budget for advertising.

So, basically, the marketing agency was sucking up the client's entire marketing budget to create something that didn't do any marketing. But at least the client could put a check mark next to "social media marketing.

Breaking news: People aren't exactly waiting breathlessly to see another tweet about your awesome product. Marketing messages dressed up as social media sharing are about as popular as a turd in a punch bowl.

Experience the thrills and chills of our Publishing Word of the Day series by checking back every day during July.

Wednesday, July 20, 2016

Becoming the Millenvy of the Publishing Industry

A new advertising medium?
We now have a name for the malady that plagues publishers who fret that they’re not getting their fair share of the young-adult audience: millenvialism.

Symptoms include desperate attempts to “generate content” (“writing articles” is so 20th Century) that appeals to the coveted twenty-something audience.

Seeking to understand this notoriously fickle group, frantic sufferers of millenvialism often try to tap into the Millennial mindset, spouting phrases like “Netflix and chill” without understanding their full meaning.

Victims also have an annoying tendency to hang out on the same social-media sites as their kids. Today’s etiquette hint: If you have a mortgage and use Snapchat, you are officially a troll. (“Better go check your Friendster account, old man!”)

Publishers are obsessed with Millennials because advertisers are obsessed with millennials.

That may seem odd, given that Boomers have all the disposable income, while Millennials spend all their bucks on data plans and paying off student loans. Besides “advertising” is a trigger word for Millennials, who have raised ad avoidance to an art form. No one under 30 is going to see your ad unless it’s embedded into a Poké Ball.

It doesn’t matter. Advertisers still want to target the kids who are cool rather than the old farts who have actual money to spend. They have listened to the marketing consultants pontificating about the need to create “omnichannel brand conversations.” And they figure Millennials are the only people naïve enough to think anyone cares what they post about their favorite toothpaste.

After all, the experts tell us, the aim of advertising in this post-rational age is to leverage two-way transparency with data optimization to create immersive, game-changing experiences.

Stupid me. I thought the purpose of advertising was to sell stuff.

This is the 19th issue of our 31-part Publishing Word of the Day series, which features such game-changing, cloudsources terms as denialsizing and Facebump.

Tuesday, July 19, 2016

Kafkaesque IRS Hounds a Black Liquor Critic

My fellow Americans, we interrupt our regular programming to bring you this breaking news about how your tax dollars are being spent:

Black liquor is a pulp byproduct.
After years of inaction and improper actions that enabled U.S. paper companies to milk billions of dollars in black liquor tax credits, the Internal Revenue Service has finally found a culprit.

It's not the elected officials who might have pressured the IRS to twist the laws and look the other way, or the IRS officials who did their bidding, or the paper companies who were allowed to siphon money that was supposed to prod development of biofuels. No, the IRS is going after the whistleblower in its midst who had the audacity to help expose the scandal.

In a move that could have a chilling effect on other whistleblowers, the IRS has placed lawyer William Henck "in a Kafkaesque limbo," writes Steven Mufson of The Washington Post. The agency completed an investigation of his alleged "crimes," which included speaking to Mufson, six months ago but won't tell him what it found, leaving him twisting in the wind.

Mufson broke the story of the original tax-credit giveaways for burning black liquor, a byproduct of manufacturing kraft pulp, in 2009 and has continued to report on related round-heeled IRS maneuvers that have come to be known as Son of Black Liquor, Grandson of Black Liquor, and The Creature From the Black Liquor Lagoon. I'll bet the IRS is preparing to send a team of its friendly tax auditors to his home to "thank" him for his efforts.

"There was in my opinion clearly a cover-up of the decision to allow well connected taxpayers to avoid reporting the black liquor tax credits as taxable income, Henck has previously written. He and other IRS employees examining the credits were told by high-level agency officials “to take a position that was contrary to the law and to published IRS guidance,” he wrote.

I have never met, spoken with, or corresponded with William Henck. But he's clearly an heroic government employee who deserves to be rewarded, not punished, for trying to get the IRS to protect taxpayer funds instead of giving them away.

Other articles about the IRS's tawdry handling of black liquor credits include:
 Our Publishing Word of the Day series will resume tomorrow.

Monday, July 18, 2016

Wiping Out Debt, Or Wiping Out . . .

"Restructuring" didn't keep Verso's
Bucksport, Maine mill from closing.
North American paper companies that used to rely heavily on the magazine industry have found two ways to survive: 1) make new products, or 2) undergo “financial restructuring” (our Publishing Word of the Day).

Verso Corporation, the country’s largest maker of magazine-quality paper, announced last week that it had financially restructured away $2.4 billion in debt, reorganized, and emerged from bankruptcy protection as a publicly traded company once again.

Plus, it got an additional “$595 million in exit financing to support ongoing operations,” including “an asset-backed lending facility.”

Market value after the first official day of trading: $406 million.

Like just about every other maker of coated paper on the continent, Verso’s "ongoing operations" now include using its machines to produce more “specialty” papers -- stuff like food wrappers that aren't affected by declines in the publishing business.

(Mr. Tree called his mortgage company to report that the remaining debt on his house is likewise six or so times his net worth and that he therefore qualifies for a financial restructuring to cancel the debt. Oh, and some asset-backed exit financing to support his ongoing operations would really help him write more “specialty” articles. The mortgage company offered to send over some sheriff’s deputies to provide exit assistance by hauling Mr. Tree’s assets to the curb.)

Shacking up
Verso's re-emergence officially ends its unusual relationship with competitor NewPage. The two U.S. companies sort of shacked up instead of getting married, sharing resources but remaining somewhat separate, in a financial restructuring so convoluted that even the bondholders didn't quite seem to understand it. The courtship, drawn out for a year by a federal antitrust review, lasted longer than the non-marriage itself did.

Poor Verso. It didn’t get the memo a few years ago that the rule of the publication-papers industry had become “He who gets to bankruptcy first wins.” Financial restructuring via the bankruptcy courts has already been the salvation of several competitors, though it didn’t do much for the stockholders or creditors.

I believe I’m correct in saying that every significant North American-based manufacturer of publications papers except one has been through a bankruptcy reorganization.

The exception is Kruger, which has heavily diversified into such products as toilet paper and wines. So while its competitors were financially restructuring to avoid getting wiped out, Kruger survived by helping its customers get wiped out.

Other recent entrants in our 31-part Publishing Word of the Day series include PMS envy and sugardaddying.

Sunday, July 17, 2016

Metallics and Foil and Emblossing, Oh My!

 The past decade has been tough on mass-produced magazines but has also seen an explosion of niche, magazine-as-art-object titles.

For print geeks and lovers of design, a stroll through the magazine section of a Barnes & Noble yields many delights these days. A special treat are covers that sport special effects that were almost unheard of in the magazine industry just a few years ago -- shiny metallic colors, fluorescence, pearlescence, foil stamping, and embossing, to name a few.

Those of us who inhabit the tight-budgets world of four-color printing and coated groundwood paper tend to drool at these high-end titles. In some, even the inside pages are printed on paper we would gladly use on our covers.

Ogling an eye-popping publication that would be worthy of any coffee table causes some of us to suffer from a new malady that Dead Tree Edition hereby dubs (Drum roll, please, for our Publishing Word of the Day) PMS envy.

Background: Most magazines are printed with only four colors of ink -- cyan, magenta, yellow, and black. PMS (Pantone Matching System) inks can take printing way beyond those four "process" colors with intense shades that often do special tricks like glowing in the dark and reflecting light.

For the record, the term "PMS envy" has been around for awhile in some feminist circles to describe moody men. But that refers to a different kind of PMS.

Most magazine publishers automatically rule out the use of PMS as too costly. But if the future of printed magazines is in niche, luxury products, as trends suggest, perhaps we should be paying more attention to how some of the artsy, not-so-cost consciousness outsiders in our industry are redefining what a magazine can be.

Saturday, July 16, 2016

Why the Rate Cap Isn't Killing the Postal Service

The rate cap is evil -- evil, I tell you!

A legislative reform that has arguably saved the U.S. Postal Service is increasingly coming under attack by wrong-headed postal officials and some of the postal unions.

The myth these whiners are spinning is that the inflation-based rate cap on most postal rates is a horrible evil that is holding the USPS back. These cap carpers describe the recent expiration of the USPS’s exigent surcharge as a moral outrage.

The Postal Service, they claim, should be able to enact higher rate increases so that it can cope with the loss of mail volume to digital alternatives.

But that’s not how the real world works. What the cap carpers (our Publishing Word of the Day) miss is that no business gets to paper over its problems by raising prices as much as it wants to – especially other businesses that suffered from the Digital Revolution. As Joe Schick, Director of Postal Affairs for major publication printer Quad/Graphics, wrote in response to a cap carp comment on a recent Dead Tree Edition article:

“While postal prices have been capped at CPI [Consumer Price Index] for Market Dominant Products over the last 10 years, postage as a percent of the total cost to produce and distribute magazines and catalogs has still increased from about 35% to 60%. That means the other segments (printing and paper) have seen price decreases, which is a big reason why there has been major consolidation in the industry.”

(I guess that means the printers didn’t get an “exigent” rate increase to help them recover from the recession, the way the Postal Service did.)

Before the rate cap and other postal reforms were enacted in 2006, changing postal rates was an arduous and unpredictable affair. After many months of legal proceedings, the new rates often bore little resemblance to what the Postal Service proposed.

The rates paid by individual mailers were wildly unpredictable, adding to the growing incentives for businesses to use digital alternatives to mail.

Postal reform simplified matters with a compromise: The Postal Service could raise rates once a year as it saw fit as long as it met one condition – that the average postage increase for each class of mail did not exceed changes in the CPI. That meant the Postal Service’s financial health would depend upon its ability to keep its costs in line with its revenues, not on its ability to influence elaborate regulatory processes.

The rate cap imposed a discipline on the Postal Service that forced it to shrink its costs structure and find new revenue sources in response to rapidly declining mail volume. Without the rate cap, the USPS would not have been so quick to implement early-retirement incentives, facility closures, the shift to a more flexible workforce, or growth of the package-delivery business.

The pre-rate-cap Postal Service would have responded by trying to push through large rate increases, a disastrous strategy that would have triggered an even greater loss of mail volume. The resulting financial collapse of the Postal Service would have ramped up the political pressure to make even more drastic changes in how mail is delivered.

The 2006 postal-reform law does include sections that hamstring the USPS’s finances, such as the interest-free loans to the federal government that are euphemistically referred to as prepaid retiree health expenses.

But limiting its rate increases – as happens with utilities and other regulated monopolies – was and is a perfectly reasonable reform. So stop the carping.

We're celebrating July with a Publishing Word of the Day series that includes the Postal Service's apparently creative use of the word "inadvertent" and its new moniker, the U.S. Parcel Service.

Thursday, July 14, 2016

Facebook Giveth, and Facebook Taketh Away

The publishing industry has a bit of a love-hate relationship with all of the Four Horsemen, but especially with Facebook.

Sometimes from careful crafting, and sometimes out of nowhere, an item is posted to Facebook that suddenly bumps up a publisher's web traffic.

I've seen these Facebumps even on this obscure little blog, at times before I've had a chance to post a link to an article myself.

Somewhere, someone, probably a disgruntled postal worker (are there any gruntled postal workers?) finds something amusing or outrageous in a Dead Tree Edition article. She posts the link with just the right mix of snide commentary, eye-catching image, and voodoo -- and within an hour the article's audience jumps from the hundreds to the thousands.

But, lately, publishers are seeing more Facehumping than Facebumping, as the social-media giant has shifted to showing people more of their friends' posts and less of what publishers have to offer. Feeling especially betrayed are publishers that went all in on distributing their content via Facebook Instant Articles, giving up some of their own web traffic to make money off of Facebook's. Now there's no money and no traffic.

Surprise, surprise, Facebook showed that it's going to do what's best for Facebook and not necessarily what's best for its publishing "partners", journalism, or the American way.

Hey, you just got a two-fer -- two Publishing Words of the Day for the price of one. So I'm counting this article as two parts of this 31-part series on contemporary publishing trends -- and taking tomorrow off. In the magazine world, we call this a double issue, where we send you a slightly larger issue than normal but count it as two issues toward your subscription. 

Wednesday, July 13, 2016

A Magazine Resurgence? The Numbers Say No

Despite what Disney movies teach us, wanting something to be true doesn't make it become true.

I keep hearing and reading about the resurgence of printed magazines, often accompanied by Monty-Pythonesque "not dead yet" remarks. With CPMs for web ads continuing to droop, publishers have become downright nostalgic about good old dead-tree editions. Noting that printed books are holding their own against e-books, the magazine cheerleaders keep telling us that print is making a comeback.

But that's not what the numbers say. The volume of magazines mailed annually has dropped for 15 years in a row, according to data released yesterday by the U.S. Postal Service.

During those 15 years, "Outside-County" Periodicals Class volume -- by far the best proxy for total magazine volume -- has dropped 44%. That means 4 billion fewer copies were mailed in 2015 than in 2000. (Outside-County periodicals are almost exclusively magazines and represent the vast majority of U.S. magazine distribution.) During that time, entire categories have disappeared or shrunk to the point of insignificance.

For the past three years, the Outside-County declines have been 6%, then 5%, and then 4% in Fiscal Year 2015. So, OK, things are getting a little less bad, but it's no resurgence. More like a reshrinkence, or maybe a resuckance, today's options for Publishing Word of the Day. (For a recent Publishing Executive article, I proposed the latter but the editors thought the former was less offensive. Guess who won.)

Giant sucking sound
By the way, don't look to single-copy sales, the second-largest method of U.S. magazine distribution, for better news. There are only giant sucking sounds, without any resurgence, coming out of Newsstand Land. A 6% annual decline would literally be a cause for celebration in what's left of the newsstand system.

What has improved the past few years is the outlook for printed magazines. The iPad was supposed to be a Print Killer but is already slouching toward obsolescence. Magazine publishers were at first frozen in the headlights and run over by the Digital Revolution. But the titles that didn't become digital roadkill have transformed into magazine-media brands, where smaller-footprint publications thrive alongside a growing panoply of digital, event, and data products.

And every month seems to bring an announcement from another digital-native publisher that is starting a print magazine.

But don't mistake all of this for growth, at least not for the magazine side of the magazine-media business. Launches of new niche titles aren't making up for trimmed circulation and outright closures of existing magazine brands.

Publishing Word of the Day is an offbeat, 31-part look at terms that tell us what's really going on in Publishing Land. Tomorrow's words: Facebump and Facehump.

Tuesday, July 12, 2016

And the Future of Newspapers Is . . .

. . . Sugardaddying.

Our latest Publishing Word of the Day describes the most successful tactic of late for keeping daily newspapers afloat: Purchase by a millionaire or, preferably, a billionaire.

Motives for sugardaddy buyouts of struggling newspapers range from civic mindedness to a craving for the spotlight to a desire to sway local news coverage.

Often mixed in is successful-entrpreneur, I-can-fix-this-backward-business hubris. (That rarely ends well if the sugardaddy is incapable of humility.)

Some of these plutocrat publishers see past the declining print revenues and the failure to catch the web wave, recognizing the long-term potential of respected, trusted brands.

Corporate newspaper owners try to survive via downsizing and financial engineering. Only a deep-pocketed, patient-money visionary like Jeff Bezos would actually invest in the kind of experimentation and additional editorial and tech resources that are rejuvenating The Washington Post.

Every day this month, all 31 of them (Did I really just promise that?), Dead Tree Edition is presenting a Publishing Word of the Day that sheds light on the state of publishing in 2016. Tomorrow's offering is a choice of two words describing the alleged resurgence of printed magazines.

Monday, July 11, 2016

It's Neither Programmatic Nor Print

Can you really sell print ads
without the use of alcohol?
Programmatic print, which is mostly still a concept, involves selling advertising for printed magazines in the automated, highly targeted manner of many web ads.

Programmatic print ads would be delivered to a reader not based on the magazine she reads but on her specific interests and apparent intent to buy certain products or services. It would require sophisticated customization of copies that is way beyond the current capabilities of most publishers and publication printers.

As currently envisioned, programmatic print wouldn’t be truly programmatic because the interval from purchase to delivery would take days instead of seconds, page-load times would not be slowed to a crawl, and most of the revenue would actually go to publishers instead of to a dizzying array of ad-tech intermediaries.

And it wouldn’t be truly print advertising because there would be no guaranteed competitive separations, no “value adds,” and no three-martini lunches.

Dead Tree Edition is celebrating July with a 31-part Publishing Word of the Day series, which includes new definitions for such familiar words as virtual reality and gravitas. For a more thorough discussion of programmatic print, see The Perils and Promise of Programmatic Print.

Sunday, July 10, 2016

A Funny Thing Happened on the Way to the Magazine Shelf . . .

The Source Interlink shutdown left many
magazine racks empty
in the summer of 2014.
The U.S. publishing industry has a strange habit of referring to retail magazine sales as "newsstand," when actual newsstands account for maybe 1% of copies sold.

It often seems that "newsstrand" would be a more accurate name, because so many copies end up getting stranded rather than being placed where consumers can buy them.

The bankruptcy of Source Interlink two years ago left millions of copies stranded in distribution centers and printing plants, while many retailers' magazine shelves sat empty.

But newsstranding occurs in other ways, such as when publishers pay to have copies placed in highly visible racks, only to have the retailer remove the racks or simply fail to implement the promotion. Or when copies are allotted to stores that then downsize or remove their magazine sections.

And some magazines get newsstranded "just because." Whether you call it the newsstand system, the grocery/discount-store/bookstore system, or the newsstrand system, the way magazines get distributed for retail sale is maddeningly inefficient.

This is the tenth installment in our 31-part Publishing Word of the Day series, which includes such sniglets as denialsizing and listicklers.

Saturday, July 9, 2016

U.S. Postal Service Wants To Deliver More Groceries

The U.S. Postal Service wants to expand and extend its test of same-day grocery deliveries but isn't ready yet to take the venture nationwide.

The agency asked the Postal Regulatory Commission on Friday to extend the two-year test for another year, to October 31, 2017, and for permission to enter new markets. The venture serves select ZIP codes in the New York, Los Angeles, San Diego, Sacramento, Stamford (CT), and Las Vegas areas -- mostly in partnership with Amazon's "AmazonFresh" service.

"The Postal Service has determined that it will be necessary to continue the market test in a variety of metropolitan areas over the next year, in order for the Postal Service to make a final determination on the operational feasibility and the desirability of making Customized Delivery a permanent product," the filing said.

The USPS didn't state which new markets it would enter. The test is currently limited to annual revenues of less than $10 million, a restriction the USPS previously asked the PRC to waive. Actual profit and volumes from the program are not available to the public because of competitive issues.

The initial model involved non-career City Carriers Assistants delivering totes with groceries and other packaged goods to residences between 3 a.m. and 7 a.m. But postal officials have indicated they want to test additional delivery windows, as well as a variety of pricing structures.

The test is part of the Postal Service's multi-pronged effort to grow its package-delivery business to make up for declining volumes of traditional mail. That brings us to today's Publishing Word of the Day: Dead Tree Edition hereby renames the USPS the U.S. Parcel Service because of its focus single-minded focus on parcel delivery, to the detriment of traditional mail

If you're wondering what this has to do with publishing, you haven't been in a meeting with postal officials lately to discuss Periodicals service and pricing when all they want to talk about is their growing package business. The official USPS position is that it can't live on parcels alone, but try telling that to postal execs who sound so adversarial when it comes to the boring old letters and flats mail that still brings in most of the bucks.

Related articles:

Friday, July 8, 2016

Publishing's Virtual Reality Check

Virtual Reality: The imagined world in which a sophisticated journalism enterprise can be funded entirely by banner ads.

The latest twist on this irrational utopianism was the hope that distributing content and ads via Facebook would, in the words of MediaPost columnist Bob Garfield, "be the magic beans to grow a magic beanstalk to plunder the goose that lays the golden eggs."

Added Garfield: "Magic would be most useful at the moment, after all, due to reality totally sucking."

It turns out that in non-Virtual Reality -- often called, simply, Reality -- Facebook is going to do what's best for Facebook and not what's best for publishers or journalism or the public good.

Those who believe in Virtual Reality still insist that we can get banner ads to pay the bills if we can just generate enough page views. But publishers who try to do that end up on the Hamster Wheel of Death. The Reality is that Mobilegeddon (readers' shift from PCs to smartphones) is reducing page views per visitor and the glut of web content is shrinking revenue per view.

As The Guardian's Katharine Viner stated in a speech this week, "Innovative journalism needs a new business model."

This is the eighth in Dead Tree Edition's 31-part Publishing Word of the Day series, where we delve into the words that explain what's really happening in contemporary publishing.

Thursday, July 7, 2016

The Mad Men Discover Diversity

It’s come to our attention here at the Dead Tree Edition Research Institute that our friends in the advertising industry are suddenly talking about diversity.

This belated interest seems odd for those of us in the publishing business, where we’ve been flagellating ourselves for eons over our hiring practices and (increasingly permeable) glass ceilings.

The diversity talk in Adland is being prompted by recent scandals involving top execs making racist comments, displaying misogynistic behavior, and engaging in unwanted groping of employees. No news here: The ad agencies have been groping us publishers for decades.

But understand that “diversity,” our Publishing Word of the Day, has a unique meaning in the ad industry – where, after all, words are subject to novel interpretations.

In the World of Mad Men, diversity is when executives at the top holding companies – white, male executives – talk about the need to hire more women into the advertising industry. But not just any women, as an anonymous ad exec explained to me:

“We’re looking especially for young women. Of legal age, of course, but barely. Extra points for wearing short, tight skirts that are properly filled out, if you know what I mean. And, for God’s sake, none of those feminazis who go running to HR or a private attorney whenever the guys in the office want to have a little fun.”

Other seemingly familiar words that have received the Dead Tree Edition Publishing Word of the Day treatment this month include gravitas, long-form journalism, and master baiters.Tomorrow's word: Virtual Reality

Wednesday, July 6, 2016

Just What We Need: Another Euphemistic Management Tactic

De-Nial is infested with crocodiles.
Looking for a way to pare down your company without having to fend off negative publicity?

From the folks who brought us “pursuing other opportunities” as a euphemism for “got canned” comes the art denialsizing.

Dr. Joe Webb, a noted printing-industry economist who discovered this Publishing Word of the Day, defines denialsizing as “saying that everything is okay with your company despite you laying off scads of employees.”

The tactic is not unique to the publishing industry, but we’ve had more than our share of denialsizing. First came the announcements of new digital initiatives carefully timed to paper over layoffs on the print side of the business.

"Pursuing new opportunities"
More recently, with CPMs for web ads continuing to plummet, some of the digital folks have been caught up in the reorganizations, strategy shifts, pivoting, and Six-Sigmaing while management spins plausible denialsizabilities to the trade press and Wall Street.

Remember, kids, De-Nial is a dangerous place. Hang around too long there and something's likely to bite you in your hind quarters.

The Dead Tree Edition Research Institute and Tiddlywinks Club is celebrating July with Publishing Word of the Day, an exploration of terms that will help you make sense of the nonsensical world of contemporary publishing.

Tuesday, July 5, 2016

There's Inadvertence, and Then There's Postal Inadvertence

Postal officials seem to have developed a new meaning for inadvertent, the subject of today's Publishing Word of the Day.

Last month the U.S. Postal Service published a notice that it was expanding expand the service area for the Flats Sequencing System (FSS). But hours after Dead Tree Edition revealed that the obscure posting would inch up postal rates for publications and other flat mail, the USPS issued a statement entitled "Inadvertent Addition of New FSS Zones" that withdrew the change.

Some mailers were dubious, noting postal officials' come-hell-or-high-water approach to rolling out the Flats Screwing System regardless of the costs to the Postal Service or its customers.Those doubts were expressed in a highly unscientific poll that was recently conducted on Dead Tree Edition's Facebook page.

To the question, "How would you describe the recently withdrawn postal rate hike for flat mail?", 83% of respondents chose, "Inadvertent, my ass! Postal officials knew exactly what they were doing . The only thing that was inadvertent was that the USPS didn't mean to get caught and have to drop the change before it could even be implemented." The other 17% of the respondents chalked it up to incompetence or to the traditional meaning of "inadvertent."

What's clearly advertent is postal officials' desire to push up postal rates for flat mail more than is allowed under the current inflation-based rate cap.

This is the fifth in our 31-part Publishing Word of the Day series. Check back every day during July to experience the thrills and chills of cutting-edge publishing terms. Tomorrow's word: denialsizing.

Monday, July 4, 2016

The Four Horsemen of Publishing

Viktor Vasnetov's "Four Horsemen of the Apocalypse"
When publishers refer to The Four Horsemen, they usually mean Amazon, Apple, Facebook, and Google.

The concept of publishers having to joust with the fearsome, well-financed Four Horsemen started in the book-publishing industry. But the allegory is easily grasped by all publishers who warily view these web giants as, at best, frenemies.

The source of the moniker is the Four Horsemen of the Apocalypse from the New Testament's mysterious Book of Revelation, who usher in nasty waves of Pestilence, War, Famine and Death. You don't suppose we publishers are at all paranoid, do you?

This is the fourth in Dead Tree Edition's 31-part Publishing Word of the Day series that will be published throughout July. We guarantee you've never heard all of these words -- because some of them were dreamed up in our own devious little brains.

Sunday, July 3, 2016

Invasion of the Listicklers and Master Baiters

From TIME magazine's web site
Forget about journalists. What web publishers are looking for these days are listicklers and master baiters, our Publishing Words of the Day.

Sure, long-form journalism may be impressive, but for pageviews there's nothing like a clickbait headline, especially if it links to a 20-part slide show.

Say what? From
Master baiters are the evil geniuses who draw you in with those over-hyped headlines. Who wants to read about ISIS when you could be checking out "The Beauty of These Celebrity Daughters Will Drop Your Jaw," "15 Movie Stars' Shocking Plastic Surgery Fails," or "12 Weight-Loss Tips Doctors Don't Want You To Know"?

The clickbait headlines typically link to listicles, mindless lists created by listicklers that are long on images and  short on words. Listiculating is sort of like writing, but without all those annoying verbs and punctuation and grammar and stuff.

My theory is that Listicles was the Greek god of irresponsible journalism, but my web friends insist the word is a mashup of "list" and "article."

Still, you can turn some heads in a staff meeting by pronouncing the word as if it came from ancient Greek -- LIST-uh-KLEEZ. Hell, you can usually get a few smirks even by pronouncing it correctly.

(Some PC types who objected to the masculine sound of "listicles" proposed a gender-neutral alternative. But, somehow, "listnads" never caught on.)

Many otherwise reputable publishers apparently believe their credibility isn't hurt by Chipotling their web pages with listicular cancer.

But consumers are apparently catching on that listicles rarely live up to the hype, take forever to load, and will try to trick them into accidentally clicking on ads. Readers are reportedly becoming less inclined to take the bait, which is leading to lower publisher revenue from listicles.

Additional resources: