Sales of Printed Books Are Growing? Impossible!

Amazon's current #1 book

For years, the pundits have been telling us that all forms of print media would steadily shrink and shrivel as consumers switch to digital media. But here are two recent indications from the U.S. book industry that reality will be a bit more complicated than the soothsayers would have us believe:

1) Unit sales of printed books are on track to increase this year. (Update: It's official: Sales were up 2.4% in 2014.)

2) During the third quarter of 2014, print books actually took market share from ebooks.

“The industry is poised to post its first increase in print sales since 2008,” Publishers Weekly reported last month, citing BookScan data showing a 2% sales bump so far this year.  That report was followed by two consecutive weeks of sales that were up 5% versus last year.

When I wrote in 2012 that U.S. sales of ebooks had apparently plateaued, I was chastised as some kind of Luddite even though I was merely reporting on industry figures. Booming iPad sales surely meant that more people would switch from print to digital for their book reading, meaning more e-books and the continuing decline of printed books, I was told.

“This is the second inning of a long ball game,” my cyber-friend BoSacks commented. “Digital will win and it won’t need extra innings.” He was not alone in thinking that printed books would soon become a niche format.

“Given the explosive growth of ebook sales since the launch of the Kindle in 2007, with increases in the triple digits for several years, many expected the paper book industry to remain in retreat for the foreseeable future,” Claire Fallon of the Huffington Post noted a couple of months ago. “Recently, however, ebook gains seem to have stabilized with hardcover and paperback books still comfortably dominant. In 2013, sales growth for ebooks slowed to single digits.” (Editor’s note: Industry data don’t always capture sales of self-published ebooks.)

Where's the fat lady?
“In mature markets, we are seeing solid growth in digital while print book sales are proving resilient,” says Jonathan Nowell, president of Nielsen Book.  (Note to BoSacks: Better call the bullpen. The starting pitchers are running out of gas, and the fat lady ain't ready to sing.)

So why did the Ebook Revolution that was supposed to have thoroughly disrupted (hate that word!) the traditional book industry apparently peter out with a U.S. market share of barely 20%? There are several reasons, with lessons for other media that are undergoing digital transformations. (Take note, fellow magazine publishers):

• Low-hanging fruit: For the first few years after the Kindle was introduced in 2007, ebook growth was explosive but also narrowly focused on certain categories. The ebook format became most popular in genres that are read from first page to last, such as novels and biographies, but is barely a blip in photography and some types of reference books. Once most of the book-a-week romance and suspense buyers bought an e-reader or tablet, further growth of ebooks had to be based on grabbing harder-to-reach fruit. 
• Legacy publishers adapt: The pundits tend to assume that decades-old publishers will lumber along like dinosaurs, oblivious to the digital meteor strike that will soon lead to their extinction. But book publishers didn’t just sit back and watch while ebooks lowered the barriers to entry and raised the chances of success for a new wave of self-publishers. Self-published ebooks became the new slush pile, where the big book publishers went looking for authors worth signing. The big players have also studied the most entrepreneurial self- and non-traditional publishers, adapting their methods to selling both print and ebooks. It's a bit like the magazine industry (um, magazine media industry), where the Internet Revolution has led not led to destruction of the savvy but rather their transformation into multi-media ventures. 
• On demand: Printing technology hasn’t stood still, either. In the past couple of years, the equipment and infrastructure for print on demand have blossomed – to the detriment of traditional book printers but to the benefit of book publishers. The ability to print one book at a time economically on an as-needed basis has enabled the industry to slash its inventory costs and reduce the risks of book launches. Backlist titles that were out of print for years are suddenly available again. Using POD, self-published ebook authors can easily create print editions with virtually no upfront costs. 
• Consumers didn’t take sides: Some proponents see ebooks in terms of a holy war that is liberating authors from the shackles of Big Print (traditional book publishers). They assumed that once people “converted,” they would never go back to print. But readers didn’t get the message; few book readers have given up print entirely. They expect ebooks when they want ebooks and print when they want print. They buy e-books to read to their children, then shell out for print editions of the kids’ favorites. The same executive who furtively read Fifty Shades of Gray on her Kindle while flying to a business meeting will proudly peruse her print edition of The Great Gatsby on the flight home. 
• Digital is not the enemy of print: Where is it written that people will buy only a fixed number of books, so that every ebook sold means the sale of one less printed book? Ebooks have drastically lowered the barriers to entry for new titles and new authors; the best usually find their way into print. That means more choices for consumers, which tends to increase overall sales. 

What of the future? Though some of my fellow print geeks see ebooks as a passing fad that will eventually lose out to "real" books, I’m not so sure.

What happens if ebook technology becomes more suited to sharing, highlighting, Post-It Noting, attractive photo spreads, and reading on smart phones? Will Amazon uses its market power to bolster ebooks at the expense of print? What happens if Barnes & Noble collapses? (Indie bookstores will pick up all the slack? Really?) Will ebook subscription services be a game changer?

I can offer only two predictions: Anyone who blithely projects that recent trends will continue unabated into the next decade will be proven wrong. And, as Jonathan Nowell of Nielsen Book says: “For the foreseeable future, we will operate in a hybrid print and digital world.”

Related articles:

• Is Print Really Killing Publishers?
• Ten Ways to Celebrate International Print Day
• A Renaissance for Print, Or Is Flat Just the New "Up"? 
• Under Siege: The Outlook for Print Media Is Even Worse Than We Thought, Expert Says -- But Publishers May Prosper

Ten Ways to Celebrate International Print Day

Today is the first International Print Day, when lovers of ink on paper are taking to social media to share cool printed projects, success stories, and helpful information.

It's very early morning (U.S. Pacific time), and I'm already seeing more than one "#IPD14" tweet per minute, most of them with relevant links.

But we here at Dead Tree Edition headquarters have our own way of honoring special days (like wearing all-natural condoms to celebrate Earth Day). So here are our 10 suggestions for making this day really special:

Nice Frisbee you've got there.

1. Moon the next bank that sends you a "Go Green, Go Paperless" message.


2. Hand someone’s tablet to her three-year-old child. (“No, Mr. iPad does not like to be dropped. Can you say “ouch”? Can you say “cracked screen”?)


3. Calculate the percentage of emails received today that you don't read; be sure to check your spam folder. Now compare that to the percentage of mail pieces you receive today that you don't look at. 


4. Tell the IT department you want to include a scratch-and-sniff promotion in your next email blast. “C’mon, I saw something like this in a dead-tree magazine. If those geezers can do it, you can too, right?”


5. Mail a handwritten note to someone you are trying to impress. And have the rescue squad on standby in case the recipient can’t take the shock of receiving personal mail.


6. Visit your "Print is dead" friend, go into his pantry, and tear the labels off all the cans and packages. Just think, you'll be helping him realize his dream of going paperless. (While you're at it, maybe you should remove all the paper from his bathroom as well.)


7. To the tune of “YMCA,” sing “C-M-Y-K,” and make up new, print-friendly lyrics. Don’t forget the arm motions. Take a selfie when you’re doing the “K” and post it to your Facebook page.


8. Use your Kindle as a Frisbee.


9. Watch the Viagra-in-a-printing-plant TV ad and think of the suggestive, print-related sweet nothings he’ll whisper to his wife when he gets home. (“Hey, baby, let me get rid of your PMS by converting it to process colors.”)  


10. Buy a book. Not an e-book, which can only be rented (regardless of what the sellers say). A real ink-on-paper book. And read it.

Who Killed the Magazine App?: 9 Suspects

OK, I apologize for the over-wrought headline: We publishers tend to be trend-happy. When something that was supposed to be the Next Big Thing turns out to be The Most Recent Overhyped Thing, we reflexively start debating whether it’s dead.

“I would not say the app is dead, but it might have a bullet wound to the leg,” app designer Josh Klenert remarked recently in a discussion of -- you guessed it -- whether magazine apps are dead.

In 2010, all the cool people in publishing were working on apps. But four years after the Star of Bethlehem appeared over Cupertino to announce the birth of the iPad, sales of tablet-based editions are barely a footnote for most magazine publishers, constituting a few percentage points of total circulation.

Pundits and industry suppliers keep proclaiming the inevitable dominance of the magazine app and the Second Coming of Steve Jobs, but most publishers have moved on. Their thought leaders and business-development resources are now focused mostly on the Web – and occasionally, God forbid, on print.

Just an afterthought
Tablet magazines have become an afterthought, intended mostly to impress 22-year-old media buyers and to shave a few percentage points off the 3P (print, paper, and postage) costs of meeting magazines’ bloated circulation guarantees.

So what happened? Despite the obvious convenience and sometimes stunning beauty of tablet-based magazines, nine forces are preventing them from thriving:

1. Publishers: The magazine industry has been widely criticized for its impatience, throwing in the towel too quickly on app development. In 2010, still smarting and scrambling from the economic recession, we publishers were still in the mindset, “If you can’t pull your weight, get the hell out of the lifeboat.” So when tablet editions showed no signs of immediate success, we cut off their rations. It didn't help that we undercut our apps by putting most of our content on the free web and by offering ridiculous discounts on print subscriptions but not on digital ones.


2. Advertisers: “Advertisers remain skeptical about paying for digital circulation,” Thea Selby of Next Steps Marketing wrote recently. “They are not yet convinced, even though the advertising is placed in a magazine-like setting, that they should be paying for the digital magazine advertising as they pay for print, based on circulation.”


3. Apple: The iPad’s creator teased publishers by creating its Newsstand as a way to encourage exploration and purchase of digital magazines, then neglecting it until it became an “unmanageable beast.” Now it’s mostly good for finding crappy Russian porn mags. It’s almost as if Apple’s lawyers told it to screw up its magazine business so that it wouldn’t get sucked into another antitrust investigation after the feds are through flaying its book-selling operation.


4. Google: With its menagerie of updates – Panda, Penguin, and the like – the giant search engine keeps tilting the Web toward credible publishers with bylined articles by respected authors. That gives publishers more incentive to put new content on the Web and not inside the walled garden of an app. The one place where Google has failed publishers is with e-editions: When it comes to search involving digital magazines, Google does “a worse job than Apple,” says Neil Morgan of Magvault.com, who’s no lover of Apple’s Newsstand.


5. Amazon: The e-commerce giant spoiled us by making books, both print and e-book, so easy to find and sample. It even has an elaborate recommendation engine that tells us about books we're likely to like. But it hasn't turned its exhaustive data or its magical algorithms loose on finding new subscribers for Kindle magazines.


6. Consumers: C’mon, despite all the whining about the discoverability of apps, people can probably find an electronic edition of their favorite magazine if they do some searching, right? Yes, but American consumers generally don’t go looking for magazines to buy. They pick one up on impulse at the grocery store, at the hair salon, or at a friend’s house. They have to be cajoled into subscribing with breathless marketing copy and special discounts. Hell, when it comes to apps they have to be cajoled just to look at a free sample issue. And when they do subscribe to an e-edition, they often forget about it (and therefore end up not renewing) because they still pay more attention to what’s in their snailbox than to the notifications on their tablet.


7. Angry Birds and its ilk: Despite an owner’s best intentions, there’s something about a tablet that wants to be more toy than tool. You’ve got a few minutes of down time and a tablet in your hands: Are you going to start plowing through that article on the global debt crisis – or try to beat your personal-best score?


8. Netflix: Streaming videos can look fabulous on a high-end tablet. Yet another distraction.


9. Smart phones: Phablets and app-heavy smart phones have turned tablets from a must-have item into a nice-to-have-if-you’ve got-some-bucks-to-spare luxury. Smartphone sales are booming, far eclipsing unit sales of tablets. iPad sales were actually down 16% in the First Quarter. When publishers said “mobile strategy” three years ago, they had tablets in mind; now the phrase means making your web site more smart-phone friendly.

Related articles:

• A Troubling Sign for Tablet Magazines? 
• How Google Is Becoming the Magazine Industry's New Best Friend
• 8 Media Trends You May Have Missed in 2013 
• A Renaissance for Print, Or Is Flat Just the New "Up"?

8 Media Trends You May Have Missed in 2013

The mainstream press has had its fill of articles recapping 2013, but it missed some important trends and lessons that emerged during the year:

Newspaper reaches for a new high

1) New hope for newspapers: The Denver Post has hit upon a promising market for beaten-down daily newspapers: weed. When publishers from other states see how the Post is trying to cash in on legal pot with its new web site The Cannabist, they may be tempted to start publishing a lot of pro-legalization editorials. I suggest a companion print product -- a special section printed on hemp, with an invitation to “Read it, then smoke it.”

2) Why cell phones have a “vibrate” option: A major magazine company revealed the startling results of an in-depth investigation via a news release: “Meredith's Parents Network, the leading parenthood media portfolio which includes Parents, American Baby, FamilyFun and Ser Padres, today announced exclusive new findings that phones and tablets have improved moms' sex lives and texting has replaced talking in their romantic relationships.”

3) The Postal Service is still solvent: For several years now, a lot of us have been saying that the U.S. Postal Service was months away from running out of cash unless Congress did something. Congress, of course, did nothing during 2013 – unless you count the naming of post offices. Still, with downsizing, increased volumes of parcels and “junk mail,” and its refusal to “prepay” retiree health benefits, the Postal Service keeps delivering six days a week and still has a few pennies in its piggybank -- even though it’s billions of dollars in the red. Now if it could just be allowed to deliver legalized marijuana . . .

4) Magazines are not newspapers: For several years, pundits have predicted that traditional magazine publishers would soon go the way of newspapers, shriveling up from massive losses of advertising, circulation, and profitability. But 2013 proved them wrong. Magazines – or, rather, “magazine media” – are adapting better to the web and are finding growth in such fields as events and services. Some had banner years for their print products, with increased ad pages and even some expanded ratebases. Meanwhile, one of the nation’s most storied newspapers was so diminished in value that Amazon founder Jeff Bezos was able to buy it with some spare change he had lying around.

5) Print is hot: It wasn’t just that web-only brands like Newsweek, AllRecipes, and Politico decided in 2013 to publish printed magazines. Print is now so "in" that a TV ad for Viagra featured the owner or manager of a printing company.

By the way, Viagra in a Printing Plant? What’s Up with That? had a larger audience and stirred up far more discussions than any previous Dead Tree Edition article about printing. Which tells you something about what printers and us print geeks have on our minds.

6) The digital divide is a myth: We’ve been told for several years that, once people got e-readers or tablets, they would mostly abandon printed publications. Several studies released in 2013 told us otherwise: Tablet owners overwhelmingly prefer printed magazines to digital ones; only 22% read tablet-based magazines on a weekly basis.  iPad owners read more printed books than does the average consumer. And most magazine publishers will tell you they have far more tablet owners reading their print editions than their apps.

7) A business model for iPad magazines emerges: Many publishers had viewed the iPad as a great medium for their publications and apps. But Apple has recently thumbed its nose at traditional magazines, allowing its Newsstand app to fall into disrepair and making it nearly impossible to find all but a few e-magazines.

A magazine that is getting promotional love from Apple's Newsstand

Recent quotations helped me understand, however, that there are at least two paths to publishing success on the iPad: The first is ad agencies: “The target market for iPad magazines is 22-year-old media buyers," a publishing colleague told me. "Selling iPad subscriptions to anyone but your print subscribers has become well-nigh impossible. But having an iPad version really helps you with the ad agencies, regardless how meager its circulation is."

And the other path? Porn: “It is apparently easier to get porn magazines from Russia into the App Store today than it is a bug fix update for a major consumer title,” D.B. Hebbard wrote last month for Talking New Media.

8) The wheels are coming loose on the content marketing bandwagon: 2013 was the year we publishers realized that every Fortune 500 company, and a lot of smaller ones as well, seemed to be copying our every move under the moniker of content marketing. Chanting mantras about “owned media” and “brand journalism,” practitioners sound like devotees of some Koolaid-drinking cult as they espouse the virtues of bypassing publishers to go direct to the consumer.

But the honest content marketers are starting to acknowledge the bandwagon is hitting some bumps. Having the junior member of your PR department do the writing is a cheap way to create articles no one wants to read; there’s a reason that kid couldn’t get a job as a real journalist. Even for good articles, finding an audience is challenging regardless of how many tweets, posts, and pins a brand uses to publicize it. Consumers, it turns out, aren't especially interested in connecting with brands.

Lately, more brands are turning to professional journalism – either by using qualified freelancers or by licensing content from publishing companies – to boost the quality and credibility of their content. And some are also turning to those bypassed publishers for help in promoting their content. It’s a hot new concept known as “advertising.”

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.

E-gads
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.”

App-oplexy
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 naïve 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.

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

Apple and Amazon Deliver Loophole To Consumer Magazines

Don't be surprised if you start seeing special offers soon for magazines' iPad or Kindle Fire versions of their back issues.

Sketchy sales data from Apple and Amazon have led to a new loophole for magazines whose circulation is checked by the Audit Bureau of Circulations. The loophole will enable them to bolster the reported circulation numbers of a weak-selling issue with single-copy sales of better-selling issues.

Erratic single-copy sales are the bane of many magazines that guarantee their advertisers a ratebase (a minimum number of copies that are purchased or delivered). By the time a publisher realizes an issue isn’t selling well on the newsstand, it’s too late to do much about it before the issue goes off sale. As a result, many publishers build in a cushion – often an unprofitable one, such as free copies sent to hair salons – to ensure that weak-selling issues don’t miss ratebase.

For printed magazines, ABC is accustomed to publishers providing elaborate reports that document exactly how many copies of an issue were sent to legitimate subscribers or sold to customers. Not so with Apple and Amazon, which don’t provide precise information about the number of paying customers (subscribers and single-copy buyers) per issue.

As a result, ABC has authorized new methods publishers can use when calculating the number of electronic copies served per issue. (No such

Under Siege: The Outlook for Print Media Is Even Worse Than We Thought, Expert Says -- But Publishers May Prosper

If you think the internet revolution has been rough on print media, wait until you see what the tablet revolution does, a paper-industry forecaster says.

As if there weren’t enough gloom and doom in the paper and printing industries these days, Roman Hohol says tablets and other digital devices will depress the demand for printed media even faster than most forecasts predict. But the director of the marketing practice for Forest Industry Consulting also sees signs that the tablet revolution will benefit many publishers.

“I believe that most [paper] industry forecasts underestimate the impact of digital media on graphic paper demand, not wanting to appear too negative to their clients,” Hohol told Dead Tree Edition. “We have developed an outlook for our clients that is quite negative.”

Hohol will present that outlook in more detail during the Industry Intelligence webcast “How the mobile media revolution will impact global graphic paper demand”, which will air at 2 p.m. EST Thursday and be available for download thereafter. Hohol gave Dead Tree Edition a sneak peek at the webcast, including the three main reasons he believes the global publication-papers industry is “under siege”:

Is Apple's 30-Percent Solution Really So Bad?

The new iPad subscription model certainly has its flaws, but for the American magazine industry to complain about Apple's 30% take is the height of hypocrisy.

In the print world, the vast majority of consumer magazine publishers would give their eye teeth for subscription contracts where the agent only keeps 30%.

A dirty little secret of the U.S. magazine industry is the "negative remit" subscription, where the publisher actually pays an agent for a new subscriber to help it meet ratebase (the circulation level promised to advertisers). Because the renewal rates on such subscriptions are usually low, they're an almost-certain money loser -- except for their impact on ad revenue.

Some big publishers have banned negative-remit subscriptions, but they still have plenty of deals where the agent gets most or all of the take. To most magazine circulators, a 70% remit (what Apple is offering) sounds like heaven.

Publishers' legitimate concerns about the iPad subscription model have to do with being cut off from the subscriber. Publishers are not able to provide demographic data to advertisers about their iPad subscribers or to renew or cross-sell those subscribers.

But even those complaints look silly to some people on the Web side of the publishing business. Many publishers are making plenty of money with their Web sites without having any data on the sites' readers.

Advertisers judge the sites not based on number or type of eyeballs but rather on consumers' actions -- such as click-throughs, purchases, and sales leads. Will they end up using those same measurements for in-app ads?

Other recent commentary on the magazine industry includes:

• How Two Words Can Lick What's Ailing Publishers: I'm working on a follow-up, I promise. Readers have submitted some great suggestions for magazines that want to join the Bite Me Bandwagon.
• Stuck at the Borders: Magazine Publishers Have Failed to Explore the Amazon
• The View From The Tree : iPadded Profits?: My recent article for Publishing Executive magazine.

For Most Publishers, Snail-Mail Editions Still Beat Apps

Though we publishers fret about rising postage rates and drool over the iPad, our financial statements tell another story: So far, digital editions have not lived up to the promise of bringing us more profits or even of saving us money.

Greed is not the main reason publishers often charge more for e-books, iPad magazines and other electronic formats than they do for the dead-tree versions, as I explain in iPadded Profits?, an article I wrote for Publishing Executive. It was posted on the magazine's Web site today.

The article shows how, despite common assumptions to the contrary, digital publications often cost more to produce and have a less favorable business model than their printed counterparts.

The article is significant in three ways:

1) Plenty of Web sites and publications have wanted to use my articles for free, but finally someone paid real money for an article. My roommate/partner is happy that we’re seeing some return -- beyond the usual AdSense nickels and dimes -- on my huge investment of time in this hobby.

2) The article strays from traditional Dead Tree Edition fare – paper, printing, postage, and the like – into such 21st Century topics as apps and e-books. Moral of the story: Pay an old print dinosaur a few bucks and suddenly he thinks he’s a new-media maven.

3) An actual expert reached much the same conclusion I did in my article. I submitted the article to Publishing Executive shortly before I saw this statement from John Squires, a former Time Inc. bigwig who helped found Next Issue Media:

"Despite the problems of the U.S. Postal Service, the cost of printing and distribution represents a relatively low percentage of publisher expenses–somewhere on the order of 20 to 25 percent today. Of course there are significant creative and technical costs in publishing a beautiful new magazine in tablet form. Just adapting to the variety of screen sizes, screen resolutions and operating systems requires significant new investments. These costs . . .  more than eclipse the savings from eliminating paper and postage."

Not only do publishers have to adapt to the various e-publishing formats, we know from experience that some of those formats will soon be obsolete. Sure, inefficiency at USPS and in the newsstand system annoy us, but we know we'll still be mailing and selling printed magazines two years from now.

Related articles:

• Smackdown: Printed Editions vs. Digital Editions
• App-oplexy: Magazines on the iPad

App-oplexy: Magazines on the iPad

New technology, same stupid question.

When it comes to iPads and other tablets, the magazine industry seems to be making the same mistake it made with the rise of the Internet and of electronic editions. The erroneous thinking showed up in a recent  promotion from the usually forward-thinking Idealliance for a session that was all about “delivering magazine editions to multiple digital devices in addition to print.”

Yep, magazine-industry executives seem to be looking at the iPad and saying, once again, “Cool technology. How can we put our magazine onto that?”

A more sensible question would be, “How can our brand be translated to this new medium?” or, more crassly, “Can we make money with this thing?”

The result of asking the wrong question is that magazine-industry apps are, for the most part, boring.

“Having spent much of the past week downloading (or sometimes struggling to download) book and magazine apps in the search for design gems, I've come to the glum conclusion that most were designed with little or no imagination,” Alice Rawsthorn of The New York Times wrote yesterday. “All the designers seem to have done is to have shunted the original printed products on to the screen.”

But there are at least two signs of hope that the industry can learn to translate its brands onto tablets: Cosmopolitan mined its extensive investigative reporting on the Kama Sutra to create its Sex Position of the Day app, and Guitar World showed how to do a logical brand extension with its new (and well received) Lick of the Day app.

(Mr. Tree wants to know why none of the women he dates are Cosmo readers. Answer: He needs to spend less time hanging around in bookstores and more time hanging around on street corners.)

For those of you wondering about the difference between the Cosmo and Guitar World apps, only the latter will show you how to use an instant flanger.

Well, come to think of it, maybe those naughty Cosmo editors have found a creative use for instant flangers as well.

Other articles about the magazine industry:

• Tina Brown Follows Husband's Footsteps -- Sort Of makes note of a magazine without a Web site and a Web site without a magazine.
• 9 Differences Between a School System and a Publishing Company: Lessons for Cathie Black explores the distinction between principals and principles. 
• The Yellowing of National Geographic: Will Today's Copies Age Faster Than That Stack in Your Gramma's Attic? has a really long headline.