Magazine Publisher’s Kodak Moment -- Here’s Who is About to be the Dominant Force in Magazine Publishing
In 1975 Kodak invented the digital camera. In 2012 they went bankrupt because of it. Kodak buried the technology so as to not cannibalize their cash cow, film.
In the end, progress always wins.
No doubt, print publishers can empathize with Kodak. For decades print has been a cash cow and, even now, with double digit declines annually, print still accounts for over 70% of most publisher’s revenue.
If they ditched print and fully embraced digital (with it’s greater appeal, but lower price point) few would be able to cover the costs of their print era infrastructure. A classic Catch-22.
So what are print publishers doing? Pretty much what Kodak did when film stopped being a growth industry: focus on slowing the rate of decline, while dabbling with new stuff to maybe get lucky, but more importantly present the right optics to bosses, customers and shareholders.
The problem is that eventually there comes a day of reckoning.
As a print publisher turned publishing software developer, I’ve had a unique position to watch this print-to-digital sea change unfold.
As we launched our magazine software (which many have described as a technological breakthrough for digital magazine reading and monetization) we thought print publishers would beat a path to the door of our better “mousetrap.” Pre-launch it seemed obvious to us that our new software would make their hard to read print replica software seem like cold war Soviet surplus technology and, they would jettison it in a heartbeat to sign-up with us.
We were wrong.
So being smart business people, like we thought we were, we changed our pricing to offer publishers an unlimited free version. Now any money objections they could throw at us were no longer an issue.
Crickets.
Now, let me ask you this hypothetical?—?If you could use this great digital magazine technology that your readers and advertisers would go crazy over, that in the long run would give you a viable business model and return you to stability… but, in the short term would potentially hasten the demise of your cash cow print edition, would you make the switch? (If I’m a publisher who is depending on my paycheck to support my 2.3 kids, house in the suburbs and comfortable lifestyle my wife has become accustomed to, I don’t think I would be so keen to rock the boat.)
Even in the face of this daunting choice, we have encountered some bold Steve Jobs/Jeff Bezos-esque publishers, who shrewdly work to evolve their business, without worry that a product line may become obsolete as a result.
Then Something Interesting Happened
By accident we got introduced to a web publisher who runs a B2B site for the insurance industry. She has a nice size database, produces boatloads of content and has advertisers (that pay her practically nothing for banner ads.) A digital magazine would give her a far more lucrative way to monetize her traffic, with a minuscule amount of extra work.
She said yes to us on the first call.
And she wasn’t the only one. Hardly a day goes by anymore where some web publishing entrepreneur doesn’t sign-up for an account to use our software.
Watching how slow print publishers have been to adapt, I now believe thatthe dominant publishers 5 years from now won’t be the existing powers, but rather the web publishers of today.
Web publishers have content, audience and advertisers?—?everything you need for a successful magazine. More importantly they “get” digital, it’s built into their DNA, and they are completely unencumbered by a legacy print infrastructure/business model.
The Biggest Media Opportunity in 40 Years
Because of this, today digital magazines represent the biggest media opportunity since deregulation in the 1980’s resulted in the explosion of cable television networks.
Back then, a massive opportunity fell to a new group of media entrepreneurs because the established players were oblivious to the industry change, caused by technology, that was going on under their feet. Had they not been, it’s likely that Time/Sports Illustrated would have been ESPN, CBS would have been CNN, and Rolling Stone would have been MTV.
This same dynamic is now playing out with magazines. The reticence to innovate from the powers that be, is resulting in a digital magazine vacuum, wide open for new entrants to fill.
Some say “change is good” and maybe it is. After all, photography is more popular today than at any time in history.
When you see what magazines can now do on digital devices, you know that the future is bright but, for me as a former print publisher, I can’t help but be a little sad at the changing of the guard.
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Larry Genkin is founder and CEO at Of Eleven Media. He can be reached at: [email protected].
Great article about the difficult of remaining innovative.
Terrified and fascinated by VUCA-level change | AQ Authority | Millennial in a Baby Boomer Body | Hall of Fame Speaker | Future of Work Global Thought Leader | Helping ordinary people thrive in extraordinary times |
8 年Larry - I couldn't agree more. I use Kodak as an example in my speaking (upcoming TED talk) and writing about VUCA. To demonstrate how quickly the environment can change....many of the younger Millennials and especially Gen Z (born after 1996) don't even relate to Kodak. More importantly many current execs and business owners haven't learned much from the Kodak, RCA, Motorola, Blockbuster, newspaper and print industries...
Being educated daily!
8 年Today, companies can't spend 90 minutes not searching for what is coming next in technology. The question is; do they know it?
I enable senior leaders to manage change and build sustainable employee engagement and enthusiasm at the same time.
8 年Here are some thoughts for you. RCA could have owned the transistor market but they were too busy owning the vacuum tube business to spend the requisite time required to walk away from it gracefully. Eastman-Kodak could have owned the digital imaging business but was too busy owning the film and chemical based imaging business to spend the requisite time required to walk away from it. On the surface it appears traditional print periodical publishers made the same mistake as RCA and Kodak. Though this is mostly true, the real reasons print publishers still treat digital publishing like a red headed step-child has to do with two things: - First, the editorial and audience building model and metrics are totally different... not incrementally different, an order of magnitude different; perhaps several orders of magnitude. - Second, the business model is daunting. Some would say crushing. While the content production and delivery code has been cracked the the business model side has not. Tradition price per impression, price per click, price per conversion, price per order simply have not solved the problem for traditional publishers. New breed publishers aren't doing much better. While their breakeven hurdle is far lower none of them are seeing the EBITDA performance or net profit per property performance of print properties. Why? They are just too small. The New breed are micro publishers who have defined a content niche. Many have good stuff for their target reader/viewer. What they don't have is a place in the marketing cloud. They aren't in the big data targeting systems that ad aggregators and major marketers depend on to buy digital ad placements. As a consequence they are slogging it out on the periphery. Th ey have two choices if they want a sustainable position on the channel lineup... get into the big data marketing cloud or... become really good at advertorial style publishing.