Thursday, March 27, 2008

On Eve of Retail Conference, PBAA Survey Details Publisher Concerns

On Eve of Retail Conference, PBAA Survey Details Publisher Concerns
By John Harrington
The New Single Copy

The 2008 Retail Conference, with the theme, "Unleashing the Power of Print," will begin next Sunday, March 30, in Tampa, Florida. The conference is co-sponsored by the Magazine Publishers of America (MPA) and the International Periodical Distributors Association (IPDA). According to the results of survey by another publishing related trade group, the Periodical & Book Association of America (PBAA), the conference will take place in an atmosphere of uncertainty and concern; at least among the 38% of PBAA's members who participated in the survey, which was conducted in January and February.

The following findings of the PBAA report were excerpted from the association's publicity release of March 18:
"68% of publishers decreased or kept their draws flat in 2007 (in line with wholesaler initiatives).
"More than half of the publishers had decreased or flat sales.
"69% raised their cover prices (32% by a $1.00 or more). Publishers seem to be trying to make up revenue by cover price increases, since sales are flat or down.
"86% expect flat or declining sales in 2008. Note: Publishers are unhappy in general with wholesaler attitudes; copies have been taken out of the systems, efficiency is up, but publisher cost savings (of not printing the wasted copies) are eclipsed by rising paper, printing, binding, and distribution costs . . .
"Publishers are seeing continued resistance by wholesalers in general to the concept of 'returning copies to the system' by re-investing or 'trading up' copies to new outlets . . .
"75% of publishers saw no benefit in their participation in wholesaler incentives.
"65% of publishers perceive the national distributors are trying to 'fight the fight' but are not effective at this time . . .

"Wholesalers are perceived primarily as magazine distributors, not as sales partners (and need to be more aware of this widespread perception), leading to increasing publisher efforts to find additional sales channels."

Confirmation of Increased Tensions: Although the PBAA survey results are strongly attitudinal, and probably not a statistically valid representation of the entire business, they do confirm the increased levels of tension that are clearly present today in the magazine distribution channel. Although sales have improved, albeit only by minuscule levels, in each of the last four years; and efficiencies are up by six percent during that period, the levels of distrust between wholesalers and publishers and their national distributors is at a very dangerous level. More than a decade of financial distress at the wholesale level has driven the surviving companies to institute, particularly in the last few years, policies aimed at reducing costs. Although most wholesalers say they are also engaged in aggressive marketing, suppliers generally feel the policies emphasize cost savings at the expense of expanding sales. At the same time, the already mentioned fragile economic condition of wholesalers has driven some of them to demand higher margins and/or challenge national distributor payment terms. The tensions arising from these types of confrontations have led many in the business to consider the possibility of one or perhaps more major wholesalers leaving the business entirely. For any publisher or national distributor, the challenge of suddenly having to deal with the loss of 15% to 20% or more of its retail distribution is more than a daunting task. That scenario has always been a remote contingency, but only in the last six to nine months, has it matured into an imminent possibility.

Retail Conference Topics:In this somber atmosphere, MPA and IPDA have announced the subjects of a series of panels and workshops for next week's conference. They include:

"Consumers, Retail, and the Environment." Chaired by John Griffin, National Geographic and chairman of MPA. Panelists: Michela O'Connor Abrams, Dwell; Steve French, The Natural Marketing Institute; David Refkin, Time Inc.; and Dave Sherman, Blu Skye Sustainability.

"Inside Insight: Through the Eyes of Former Retailers." Moderated by Richard Lawton, CMG. Panelists: Steve Burbridge, T/WR; Tim Humanik, CMG; and Jerry Lynch, IPDA.

"Puzzled, Perplexed & Pondering.. . . . Why Publishers do the Things They Do." Moderator: Rob Gursha, T/WR. Panelists: Linda Brennan, Business Week; Ken Godshall, Hearst Magazines; Terry Day, National Geographic; and Suzanne Roman, The Taunton Press.

"Future of Magazines at Retail." Moderated by Peter Kreisky, The Kreisky Media Consultancy. Panelists: Jaime Carey, Barnes & Noble; Glen Clark, The News Group; Rich Jacobsen, T/WR; and John Loughlin, Heart Magazines.
"A Case for Magazines at Retail." Panelists: Jay Felts, CMG: Drew Wintemberg, T/WR; and Jay Wysong, DSI.

Other speakers will include Matt Cooper, Portfolio Magazine; Cindi Leive, Glamour; Wendy Liebmann, WSL Strategic Retail; Tom Griffith, Willard Bishop Consulting; Anne Zafian, Simon & Schuster; John Santanella, Nickelodeon; and J. Walker Smith, Yankelovich Partners.

In Circulation: Timeliness, transparency help circ measurement keep pace with other media

In Circulation: Timeliness, transparency help circ measurement keep pace with other media
By Lauren Bell
Audit rules approved by the Audit Bureau of Circulations board last week seem to mark a trend in circulation measurement: faster, more precise reports that bring print audits closer to the sort of metrics used by other media. The ABC's new rules were intended to simplify current audit rules and make audit reports more useful to advertisers and publishers.

Key to this new push for usefulness was the change ABC made to its Rapid Report guidelines. Publishers using Rapid Report - an online tool for recording audience numbers issue-by-issue - are now being asked to post initial post-issue readership projections within three weeks of a weekly title's on-sale date. Monthly publishers should post within seven weeks.

"It's a much more on-demand world today," said Kammi Altig, manager of communications at ABC. "People in the Internet age do expect information more quickly, and it certainly makes the print industry more competitive and more comparable with other media industries."

By speeding up the process, ABC is making print audience reports more comparable to the more regularly-posted numbers provided by TV, Web sites and other media. Such information is expected to raise print's standing in a marketplace where ad buyers consider and compare multiple media platforms. It is important to note, however, that Rapid Report measures circulation, while other media measure audience - a difference that makes comparisons between the two an apples-to-oranges exercise.

Robin Steinberg, SVP, director, print investment and activation for MediaVest USA, added, "The simple answer is yes, it does make print more competitive, that's why we developed these reporting guidelines. As a medium we need more timely data and we need to understand the data earlier rather than later. It's really about transparency, and I think publishers will benefit by being more transparent on a timely basis."

A new MPA initiative unveiled by president/CEO Nina Link two weeks ago sought similar effects. MPA proposed new audience-based metrics that measure different audience demographics and engagement with ads.

"A key item was to become faster in our measurement and more comparable to the way other media are measured and more accountable," Link said.

A tangential, but no less important, effect of the MPA changes is that better consumer metrics may allow circ marketers to deploy more targeted campaigns. And with numbers coming in on a timelier basis, marketers will be better able to judge how audiences respond to a magazine on an issue-by-issue basis.

Like ABC, the Magazine Publisher's Association is making improved online survey techniques a major focus in its reworking of the audience reporting process.