Magazine Publishers of America
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RECAP: INNOVATION SUMMIT DAY ONE
MPA's first ever Magazine Innovation Summit kicked off on October 14, 2009, with a full day of General Sessions that featured speakers, panelists and case studies addressing technological, operational and creative change in the business. More than 400 magazine executives and other leaders gathered for the two-day Summit, which began day one at the New York Grand Hyatt in New York City. Following are brief dispatches from the sessions.
PRESIDENT'S WELCOME & MPA CHAIRMAN'S REVIEW
MPA President & CEO Nina Link recalled the last time the MPA held its annual conference in New York: October, 2001, in the midst of another troubled time. "But our industry bounced back,” she said. “How? Through the strength of our brands to create powerful bonds with their audience and to provide incredible value to advertisers.”
REINVENTING PORTABILITY: 4 THINGS TO KNOW
Michael Kelley, Partner, Advisory Services for PricewaterhouseCoopers' Entertainment, Media, Communications and Technology Sector, moderated a panel featuring Jacki Kelley, President, Universal McCann North America, and Douglas Scott, President, OgilvyEntertainment, to explore the potential for publishers to capture marketers' dollars as content moves to portable devices.Kelley stated that America is currently in a "repression," kind of a halfway point of sorts between a recession and a depression. But even in the midst of this, he said, you cannot stop innovation. Less than three years ago, we did not have the iPhone he points out, and broadband capabilities have expanded rapidly in only the last year.That expansion allows the magazine to be the starting gate for consumers rather than the endgame. “It’s the beginning of the game,” he said. “You are perfectly positioned to use all of this to bring to life what you do every day.”If a publisher can do that by offering a daily download or a recipe at 4 p.m. or daily yoga exercises in the morning or some piece of valued content, a group of subscribers will opt in and be extremely valuable to advertisers.Panelists Kelley and Scott agreed that providing different information to different subscribers via portable devices could be an excellent revenue stream for publishers.Kelley pointed out that advertisers are really looking for engagement with the readers. The advertiser typically gets exposure through a magazine but mobile devices take engagement to the next level. And then those that respond can help create a like-minded community that advertisers can also reach.
THE MAGAZINE BRAND BUSINESS MODEL OF TOMORROW
Scott Donaton, President & CEO, Ensemble, led the discussion with panelists David Carey, Group President, Condé Nast Publications; Maria Rodale, Chairman & CEO, Rodale Inc.; and Efrem “Skip” Zimbalist, President and CEO, Active Interest Media, Inc.Rodale pointed out that her company uses its mission of helping people and the environment become healthier as the basis for all the decisions it makes. “It’s less about specific magazines or websites; it’s about how do we reach our audience with that message,” she said. “I’m a strong believer in brands because that’s the primary connection the audience has.”Zimbalist said that he thinks the current economic stress is going to hurt publications that cover technology, financial, and b-to-b news. “If you need the information quickly, most of that is permanent.” Other sections of the market, such as enthusiast, special interest and celebrity titles, will find the current economy to be more cyclical.Zimbalist used the example of a boating magazine to show how a business can approach its subscribers now: The title should push its readers to the website. Then website and publication both should push readers to events. When the person buys a ticket to an event, he or she should be asked a few questions about what he or she is looking for at the show. Then the magazine can provide information to event exhibitors about who is looking for what and also provide information to the show attendee on which exhibitor might fulfill his or her need. “We try to close the circle,” he said.Rodale mentioned that she thinks that being in business today requires someone to be ready to constantly start and stop. “The world is changing so quickly and our customers are changing so quickly, you have to constantly experiment.”
NAVIGATING THE E-READING MAZE
As Amazon’s Kindle e-reader has gained in popularity, magazine publishers have wondered when the next generations of electronic reading devices will be upon us and how they will affect the magazine publishing business. The panel moderated by TIME Editor-at-Large Josh Quittner attempted to answer such questions.Quittner was joined by Marc Canel, Vice President, Product Management, Software, Qualcomm CDMA Technologies; Doug Carlson, CEO, VIV Publishing LLC and Managing Director, Zinio; and Mary Lou Jepson, CEO, Pixel QI.While they all seemed to agree that flexible e-paper that magazine publishers could use is still a few years off, they agreed that the next generation e-reader (with color, video, and sound) could appear in early 2010.“You’ll see a lot of very exciting portable-type devices coming out,” said Carlson. “That’s the future of our magazine industry.” The expectation is that such devices will plug into keyboards and eventually replace the laptop.Carlson suggested that publishers should continue to optimize content for this screen as the market will only continue to grow as color and interactivity improve the e-reading experience.
KEYNOTE: THE END OF THE MEDIA WORLD AS WE KNOW IT
The New York Times media columnist David Carr sat down with New Yorker staff writer Ken Auletta for an entertaining discussion of the latter’s new book, Googled: The End of the World as We Know It, at the Summit.Auletta pointed out that Google is a young company that has made some mistakes, but it shouldn’t be defined as "evil." During the interview, Auletta told the story of then-Viacom chief Mel Karmazin taking a tour of Google in 2003 and getting upset with the site’s founders and CEO at the day’s end, informing them that they were “f--king with the magic” by telling advertisers specifically what ads worked and what didn’t. Auletta went on to say that one of the smartest things the company did in its early years was to allow its workers to spend 20 percent of their time working on anything that they wanted to work on. The company is mostly made up of engineers. He mentioned that Google CEO Eric Schmidt spends Monday, Tuesday and Fridays in meetings just hearing ideas being put forth by engineers.When asked his feelings on free versus paid content, Auletta said. “If you’re leaning forward, you’ve got to try many things, including paying for content.”Auletta also said that publishers could learn a thing or two from Google. “The lack of display ads has built up reader trust for Google. “We have lost it,” Auletta said. “Journalism is in crisis.” He suggested that the rebuilding of that trust will bring readers back.
HOW CHANGES IN PRINTING TECHNOLOGIES IMPROVE BUSINESS Gregg Hano, PopSci Media Group; Dr. Cynthia Arnold, Sun Chemical Corp.; Tom Riedel, Structural Graphics; and John Loughlin, Hearst Magazines
While most of the conversation on the first day of the Summit was dominated by new media technology and its effect on the industry, this particular panel discussion focused solely on the print product. Moderated by John Loughlin, Executive Vice President and General Manager, Hearst Magazines, the panel included of Dr. Cynthia Arnold, Chief Technology Officer, Sun Chemical Corporation; Gregg Hano, Group Publisher, PopSci Media Group; and Tod Riedel, COO, Structural Graphics.Loughlin showcased a number of ways Hearst has used different current print technologies within its magazine operations. One title featured a removable page that sticks to the refrigerator so a person can track her or his diet. Another had a triple front cover to showcase different courses of a Thanksgiving meal. Another cover folded in different ways to create a second one, offering myriad advertising opportunities. Still another had a cover that was split into three horizontal strips so the reader could mix and match with the image below it. Loughlin also discussed Esquire’s 75th anniversary cover from last year that used movable, flashing “e-ink” on its cover.Loughlin’s point was clear. There are many options magazines can take advantage of to catch a consumer’s eye and the limitations now are mostly only the ones that are imagined.Hano talked about the July issue of Popular Science, which featured the first “augmented reality” cover in the consumer business. Readers could take their magazine and hold the cover of it up to a webcam, then a 3-D landscape would appear with wind turbines “popping” off the page. If the reader blew into his or her computer’s microphone, the turbines could move faster.Dr. Arnold noted that there are numerous special effects publishers could leverage. Riedel had a laundry list of ideas for publishers to use in printing technology, including the inclusion of webkeys in publications so consumers can input them and be pushed to directly to digital content. “We’re always trying to find ways to bridge the gap between digital and print,” he said.
LUNCHEON EVENT: CONVERSATION WITH NETFLIX'S REED HASTINGS
BusinessWeek.com Editor-in-Chief John Byrne interviewed Reed Hastings, the Founder, Chairman, and CEO of Netflix, which had about $1.3 billion in revenue last year and claims about 10 million subscribers. During the discussion Byrne pointed out the similarities between the magazine industry and Netflix. Both have businesses dependent to a large degree on the hard copy delivery of content via the postal service. And both businesses are engaged in efforts to reach consumers through digital channels.Hastings said that very early on for his company, founded in 1997, one thing was clear: “It’s all about the customer service. You have to figure out a way to be strategic and serve the customer at the same time.” He also noted that Netflix took extra time to do market research from the start as well.Hastings also compared business to the game of chess. “Master chess players follow a few potential sequences all the way through,” he said. Byrne asked Hastings about the contest Netflix recently ran for outside programmers to come up with a recommendation software that could do a better job accurately predicting the movies customers would like than Netflix’s current in-house software. The winning team came from the United States, Austria, Canada and Israel. Hastings said Wednesday that the awards ceremony was the first time the entire team had actually been in one room together. “That’s the power of the Internet,” he said.He added that Netflix had identified social networking as an important facet early one but failed miserably at executing it. His continued hope is for the users of Netflix to feel personally served. “With technology, you can generate unique experiences,” he said after avoiding answering Byrne’s question of the top 10 Netflix films of all time. “You could go to every person in this room and that list would be different,” he said.
ASME President David Willey, who is also Editor-in-Chief of Runner's World, announced that Rolling Stone's July 2008 cover featuring Barack Obama was the Magazine Cover of the Year, as picked by Amazon.com voters.
Peter Larsen, Director of Magazines at Amazon.com was also on hand to express how happy they were to partner with ASME on the Best Cover Contest, which not only yielded hundreds of thousands of votes, but also a spike in magazine subscription sales on Amazon.
Willey also announced that ASME has expanded its prestigious National Magazine Awards to include 12 additional categories honoring digital media.The comprehensive Best Cover Contest gallery, featuring images and stories behind the covers, has been posted on www.magazine.org/bestcover.
PUTTING BACK THE WALL: NEW CONCEPTS FOR PAID CONTENT
Walter Isaacson, President and CEO, of the Aspen Institute, led a spirited discussion on paid content models with panelists Matt Mankins, CEO, in-a-moon; Betsy Morgan, former CEO, The Huffington Post; Daniel Stein, CEO, eMusic; and John Squires, Executive Vice President, Time Inc.Morgan said she didn’t think it was insane to charge for content but that it would be difficult to make that transformation. Isaacson wondered if making consumers pay for content will suddenly cause a publication’s content to suddenly be not “part of the conversation.” Mankins said he believes consumers will pay for “valued content.”Meanwhile, eMusic has 400,000 consumers willing to spend for its content: music downloads. “I think people will learn to pay for quality content,” said Stein. “We have a very loyal community of users. We’re always trying to figure out other services we could provide.”On Isaacson’s idea to have one payment system that crosses all boundaries, Stein remarked, “It would be a great idea, but there are too many interests involved,” Stein said.Morgan mentioned that consumer behavior changes very quickly in today’s world. “It was only a few years ago that consumers started to search Google for news and really take advantage of the abundance of news online,” she said.
KEYNOTE INTERVIEW: WHAT TRANSFORMATION AT THE POST OFFICE MEANS FOR PUBLISHERS
Capping off the first day of the Magazine Innovation Summit was a conversation between Postmaster General Jack Potter of the United States Postal Service, and Cathie Black, the President of Hearst Magazines.The Postal Service and magazine business are intrinsically linked and Potter started his comments with a thank you to the publishing industry for being such a strong customer. Black and Potter discussed the changing nature of postal in this country and what could happen to make it financially secure again. “It’s going to have to be a product between a lot of the stakeholders who have a vested interest,” Potter said. “Because there are millions of Americans whose employment is related to the Postal Service.”Just in the past few years, the volume of mail has dropped precipitously from 202 billion pieces of mail last year to probably 176 billion this year and a predicted 166 billion pieces next year.Some of the key ingredients to creating that change have been the deep recession, changing customer behavior, product and pricing regulation, opposition to changes in networks and labor, and retiree health benefits, said Potter.Potter is hoping any changes he makes in the coming months will help make the Postal Service relevant for the future. One of the big changes being discussed is moving to a five-day delivery week. More than 66 percent of Americans would prefer to go to a five-day delivery schedule than to have their postal prices rise, Potter said. Potter’s plan would also include consolidating facilities and tightening up the current network. But he also pointed out that most Americans don’t want their local post office closed down.The Postal Service will also likely lose another thirty to forty thousand employees in the coming months and end up with around 580,000 employees.
