Where next for magazines? Top publishers envision their future business models
For two days this week, 600 senior magazine people from 40 countries sat in a Deutsche Telekom building that was once the centre of Germany’s telegraph network. Ignoring the ghosts of a dead communications technology, they tried really, really hard to imagine magazine publishing 3.0.
The Digital Innovators’ Summit in Berlin is a seven-year old joint initiative between the German magazine publishers’ association VDZ, worldwide magazine association FIPP and US digital consultancy emediaSF.
The founding objective of the event is to help content business leaders develop better strategies and better media models in the digital era. The opening advice to delegates this year was to ditch the ‘D’ word.
FIPP CEO and President Chris Llewellyn, said he was trying to banish the word ‘digital’ from his own vocabulary. Difficult at a digital innovation conference, but he made his point.
People born to the internet age don't describe things as digital – cameras are just cameras, not digital cameras. He opened with a 1981 TV news report about a US newspaper experiment that encouraged readers to spend two hours downloading daily news texts to their TV screens over their home phones. Llewellyn said people born after the film was made would be amused, and confused, by the whole concept.
At the first DIS, less than three per cent of the attendees laid claim to any kind of digital business. At this event, everyone had digital in their business and there was a real sense of ‘let’s take this to the next level’. Exactly what the next level is wasn’t entirely clear, but there were a few clues.
Mobile took centre stage. Speaker after speaker talked of the tipping point that would soon see more online traffic come from mobile devices than the desktop. One of the biggest innovations at this Innovators’ summit was a 36-hour Mediahackday reimagining news from a mobile perspective. Teams hacked apps to get content on to mobile devices, with the winners developing a solution for converting text feeds into audio.
Video got a lot of attention too. Ed O’Keefe, editor-in-chief of mobile, social news platform Now this News, focused on the need to create video ‘native’ to the distribution platform. He demonstrated how to tell the same story five different ways across Vine, Instagram, Snapchat, Twitter and Facebook.
“Radio is not the same as TV, you wouldn’t take what you produce for radio and put it directly on TV,” he said. Equally, he doesn’t think TV concepts lifted on to the web work or that the web is necessarily the same as social. “What you create for the web, while a good marketing tool, may not be what natively the mobile or social consumer is looking for.”
The social dynamic running through O’Keefe’s narrative was evident everywhere. VP International for Buzzfeed, Scott Lamb, suggested that if the social networks went away, Buzzfeed might as well pack up and go home. “The front page of Buzzfeed is the social web,“ he said. He put Buzzfeed’s success down to monetising the ‘Bored Network” people bored at work, bored standing in line or bored at home.
Buzzfeed makes its money, 100 per cent, from social content marketing. He said that if this is done right, to the bored consumer it can seem like a “gift from the advertiser.”
In contrast, banner display was pronounced dead at DIS. Launching the Magazine Media Innovations report 2014, editor Juan Senor asked the audience when they last clicked on a banner ad. He responded to the awkward silence in the room with: "We all know banner display sucks. They don’t work and they never have worked.”
With the banner gone, delegates were desperate to hear about alternative approaches to revenue generation – native and programmatic advertising topped the bill. Prescriptions for successful native included quality content, clear labelling and strong social integration. Programmatic was described, not as the ‘rise of the robots’, but as an opportunity to exploit booking efficiencies to free up time for cross-selling and creative consultation with commercial partners.
Partnerships were seen as central to the magazine business moving forward, from ecommerce deals that allow Radio Times publisher Immediate Media offer its audience travel deals to Conde Nast working with Flipboard to distribute content.
Collaborative investments in technology start-ups were also highlighted as one way to bring talent and opportunities into legacy publishing businesses. Dennis Publishing CEO James Tye saw minority stakes in start-ups as a way to bring in innovation, although VC Brian Garret of Cross Cut Ventures warned that managing innovation was hard. “No offence, but when it comes to innovating, 80 to 90 percent of you will fail miserably."
Frank Anton, vice chairman of US B2B publisher Hanley Wood, offered deep market knowledge as one of the best protections against failure to innovate, but acknowledged that making money in magazine publishing is not as easy as it once was. He said magazine margins used to be in the region of 40 to 60 percent. "If most American media companies were honest, they couldn’t tell you what their digital margins are.”
Anton believed one way back to better profitability was for publishers to start acting like marketing agencies, an idea that the PPA CEO Barry McIlheney supports. "Magazine publishers are fantastically well placed to expand their traditional role and become more akin to a thoroughly modern marketing agency. We understand our consumers inside out, we talk to them in their language, and we now speak to them across a multitude of platforms and channels.”
It’s this deep knowledge of the audience and their needs that will define magazines 3.0. Bo Sacks, one of the founding fathers of 70s magazine High Times, told me, “Digital… print… the substrate is irrelevant. It’s all about reading.” And that’s the key.
For marketers, magazines have always been about attention. The problem for publishers is that people just have so many more calls on their attention these days. The magazine publishing industry can argue all day long about how to do that, but magazine, and marketing, innovation has to be about recapturing that attention.
For all the discussion of media hacks and Google Glass, the one rock-solid certainty to come out of the old telegraphy building in Berlin this week came courtesy of Steve Hannah, CEO of The Onion: “The future lies ahead of us.” No one can argue with that.