Paper not going away any time soon despite Zinio

When user comments range from ‘I’m embarrassed the future of magazines on my $499 ipad is shoddy enhanced PDFs’ and ‘Zinio is only a fair solution to reading on the go’ and hundreds of complaints about software functionality with one complaint reading ‘inability to access my already subscribed to library of magazines is a deal breaker’, it shows that Zinio is not all it’s cracked up to be.

My argument is that I don’t think Zinio is the future it is merely a convenient sometimes technologically faltering (based on user comments on the web)  alternative to a magazine experience that may work for the consumer under certain circumstances provided of course Zinio gets its act together.

But neither do I think the model will fail, it would continue to make profit based on its three revenue sources of subscription, distribution and production but it will be just another app.

In my view there was an element of hubris in the digital mavens’ voices of doom that abounded in the mid 1990s and beyond when they predicted the printed word would not survive.

Trends usually ebb and flow and fashion themselves on a pendulum action but throughout the digital era paper has continued to prevail and has done so for the past 2000 years.

This is based on the following data in the article

(1)Despite a 8% drop in advertising for both US and European magazine advertising between 2000-2003 revenues rebounded and in the US ad revenues even exceeded pre 2000 levels and posted a growth in 2005.  Even in Europe the ad revenues were beginning to see a slower (2%) yet definite upward trend.

(2)Magazine advertising is effective (see exhibit 3). Data suggests that it engages, it is considered valuable content, it moves readers to action, improves advertising ROI, is relevant and targeted, reaches the most desirable consumers, has a lasting impact, influences the influentials and is considered trustworthy and credible.


(a)Magazine advertising engages the reader as no digital advertising could. With samples of scents incorporated into the folds of its pages, with samples of hand creams stuck to pages the virtual experience will never substitute the physical experience. Perhaps the only exception was the old spice ad that was so innovative in its content and interesting and funny featuring Isaiah Mustafa that did so well on the net.

(b) According to data in Exhibit 3 across almost every demographic the top 25 magazines out deliver the top 25 TV shows.

(c ) A magazine in the home is one magazine to be looked at by all in the home, read many times over, mulled over lending itself to dedicated reading.  If you’ve forgotten something you can go back to it to find a time or place to acquire an advertised product.

On the internet there is information overload, hundreds of possibilities lie before you with a click of a button, why should you go to that particular magazine when you can be easily distracted by a thousand other similar products. Though the flipside to that is it is also easy to access information on a product and instantly c;lisk to follow up articles.

(d)But I do agree that the digital version of a magazine may work well with Music magazines where listening is a great part of the experience.

(3) Despite slight drops in circulation between 2000 – 2005, magazine titles increased from 17,815 titles in 2000 to 18,267 in 2005.

Note: From this group digital magazines had 1700 magazine titles and 3 million users in the US. That is 9.3% of all magazines in the US had digital versions while 90.7% of magazines were still being distributed on paper to 363.1 million (based on Exhibit 2) readers. Not only that trends were showing that Magazines were not experiencing the hit predicted but rather were seeing a gradual if slow upward trend in sales.

(4) Magazine Publishers of America (assuming that the data is based on empirical research and not biased)  claimed the popularity of reading was at an all time high compared to TV/computing and listening to music. MPA said 84% of those over 18 read magazines and spent an average of 44 minutes doing it.

NOTE: The counter to my argument of course would be Exhibit 11 that details consumer opinion about digital vs print.

Here it seems to run contrary to my argument and indeed the MPA’s that the advertising is more engaged with in magazines. For instance for advertising recalled after viewed digital scored 73% whereas print scored 68%. The association of advertising brands  also had a five percent difference in favour of digital.

But here’s the question. What were the methods of accumulating this data and who was interviewed. This data is taken from company documents and are based on feedback from consumers. Consumers of Zinio one presumes. Thus it is safe to say that they are already comfortable with the digital reading experience.

NOTE: There are millions out there who access the internet and still download and paperise digital content as they are more comfortable reading paper than screen.

For Zinio Spain I have two brief observations

(1) Only 34% have access to internet while 81.9% have access to mobile phones how many of this number are smart phones or compatible with digital magazine formats

(2) The Latin American market is indeed potentially lucrative. But how would you get around the payment and credit card issue which is a infrastructure and internal regulatory problem  that cannot be solved by Zinio.

Another  caveat to this exhibit is that there were only 5 million subscribers to digital magazines in 2006. It would be interesting to know how that figure has progressed into 2011.

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Case Study – Politico

Politico was too ambitiously structured for a start up and it was serendipitous that a rich investor in the business of communication with a desire for a newspaper and two experienced journalists yearning to break the traditional mould got together. It’s not everyday that happens. And it just felt like they went overboard like kids in a Candy store just because they had all this money thrown at their project. With Huff Post not even paying their reporters who are also less well known one presumes (I’m no expert on American journalists) they still managed to exceed Politico’s unique views. It seems in the end that they got excited with the idea and overstaffed themselves, over thought the entire project and while it is a success one feels it would have achieved that same level of success with far less human and financial capital.

It also provides a caveat for websites relying on advertising for revenue and throws on its head the idea that print journalism is dead. If one print reader is worth 200 times more than one unique visitor online and the newspaper with a ultra local circulation of 27,000 can pull in 60% of the revenue, it means that the enterprise could break even with less readership albeit quality readership.  It meant that lobbyists and other groups merely wanted their ads to target those in the seats of power and influence and couldn’t really care about a wider audience – well noted by the Politico team themselves.

I’m also wondering if ethnically oriented startups or specific web sites like what I envisage will ever be able to garner enough interest in an American Investor. A reflection of this lack of interest lies in a conversation I once had with Rory Stewart who was then the head of the Carr Centre at the Kennedy School. I was arguing that with a specific South Asia Institute at the School it should focus more on Sri Lanka and set our several geopolitical reasons why. But he was realistic in his answer. He said the focus is India, Pakistan if you advocate Sri Lanka, then find a rich Sri Lankan investor to pump in some money.

So despite a large online readership Politico could not monetise it. Can it happen at all then with this business model?

I feel Politico in the end is delivering more of the same, that not only readers but Washington influentials will be able to get that material elsewhere – there are always good political journalists peppering the media landscape. It failed to provide the wow factor or the service factor. It failed to provide a mission, champion a cause and in failing to do so became one of the crowd – Albeit the hip crowd. But just as the Huff post’s draw was its independent liberal small enterprise  persona (not anymore after the AOL takeover) I think being a maverick, taking a contrarian view, fighting a cause, specializing in investigative articles etc usually provides the influence that can generate at least sufficient funds to sustain a business. But hey I’m still new here and the indecent amounts of money that get’s thrown around still makes me reel with disbelief. But that’s an outsider’s view. It doesn’t mean it’s a bad thing.

Again Politico had everything going for them, a ready and willing investor, the right political atmosphere (the elections) to launch and really take off, media aristocracy at its helm, a huge staff, web designers, the site programmed individually, gigs on TV shows to advertise the site, tremendous publicity – perfect conditions and yet no wow! It doesn’t seem to have retained the influence factor.

I really believe in the influence model. Again lot to say on this. Influencing the power centre and/or the people so each needs different approach. To balance societal and commercial influence. I think it can be achieved especially in these days when information and news websites abound, by being perceived as standing up for something.

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