Publishing/Writing: Insights, News, Intrigue

01/10/2013

Publishing – Using Technology To Get Away From Technology


CEO Perspectives - FOLIO MagazineArianna-HuffingtonSay what? — Isn’t that an oxymoron? 

You might think so at first, but it is actually a very astutely worded observation by Arianna Huffington in her vision of 2013 publishing/media trends — She postulates three trends, to be exact, that are off the beaten path but truly hit the nail on the head — in this writers opinion 🙂

Arianna’s three 2013 media trends (as well as 8 other publishing leaders’ forecasts) are presented in CEO Perspectives from the December, 2012 FOLIO magazine (the magazine for magazine management):

CEO Perspectives/Arianna Huffington (President and editor-in-chief, Huffington Post Media Group)

When I look ahead to what 2013 holds for the media industry, three trends stand out. First, the shift from presentation to participation means that the days of the Media Gods on Mt. Olympus telling us how things are have ended. People are tired of being talked to; they want to be talked with. Our new global conversation has allowed media to engage with readers in totally new ways. The success of brands in the future will depend upon understanding this new relationship.

If the first trend is a Garden of Eden blooming with engagement and self-expression, the second trend is the snake in the garden: The temptation to fetishize the social and viral for their own sake and lose ourselves in technology. Fortunately there is a powerful, countervailing force using technology to get away from technology, reflected in apps and features like Freedom, Do Not Disturb, and HuffPost’s GPS for the Soul—which we’ll be unveiling at CES in January. I realize there’s a paradox in the idea that an app can help deliver us from technology, but the solution to tech overload isn’t no technology, but better technology.

The third trend is the shift from searching for information to searching for meaning. People are using technology to connect with others not just around similar passions and interests, but around the causes and values that most resonate with them. And the shift isn’t confined to individuals. More and more, brands are identifying with a cause, and making that identification a central part of their ethos.

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06/12/2012

How Targeted Acquisitions are Changing the Magazine Publishing Model


Targeted Acquisitions Changing Publishing Model

Giant publishers such as Hearst and Meredith are foregoing expansion by building in-house tangential departments (such as digital, mobile and marketing services) from the ground up and are, instead, target purchasing already established peripheral companies with the needed expertise.

They are doing so to play catch up with a marketplace that is moving faster than organic growth can keep pace with.

Who is buying who and what, when, and for what purpose and at what cost, and what’s exactly behind the deals is detailed by Bill Mickey, Editor of FOLIO magazine:

The Acquired

How big publishers like Meredith and Hearst are expanding operations, hedging against print advertising and transforming the traditional publishing model through targeted acquisitions.

Acquisitions allow companies to make rapid changes to their corporate structure and are often a way to play catch-up with a marketplace that’s moving faster than organic growth can keep up. The call for diversification has been going on quite a while now and it’s no big secret that print advertising, by itself, is incapable of the scale publishers need to survive. Accordingly, publishers have been acquiring companies with surgical precision that allow them to quickly enter a market that’s tangential to magazine publishing, but far enough outside their wheelhouse to be considered nontraditional—digital, mobile, marketing services, for example. And as these acquisitions are being made, the model of magazine publishing itself is being changed. And we wanted to look at how these deals not only change the buyer, but the seller too, and what this means for an industry that once only had one thing to do: Print magazines.

Two companies have historically been singled out for making key acquisitions that have, along with continuing to build out and expand their core media expertise, quickly given them significant market share in marketing spending outside of print—Meredith and Hearst. Here, we dive into their key acquisitions to see how the companies have changed as a result, the value that’s being created, and how the companies they acquired have also changed.

The Shift From Offline to Online

Nothing has inspired the necessity to chase nontraditional deals than the rapid shift of marketing dollars from print to digital channels. And now, even digital has fractured into social, mobile and search marketing spending, to name a few. Meredith was one publisher that recognized this relatively early and in the last 5 years has spent roughly $110 million on six companies to form its Meredith Xcelerated Marketing Group (MXM).

The group is kind of like an in-house advertising and marketing agency that allows Meredith to offer marketing services way beyond what its core media brands can offer by themselves. Yet having those media brands in close proximity to these new services allows for tremendous leverage and scale for the acquired companies as well.

Meredith had been offering “custom publishing” services to the tune of $75 million in annual revenue for 35 years before MXM, but the market was quickly changing in ways that print-centered custom solutions could no longer support. It was time to start buying, and fast.

“It became clear to us that the marketing dollars would start moving from offline to online,” says John Zieser, chief development officer and general counsel for Meredith Corporation. “We knew we needed these competencies and it was better to acquire them for a few key reasons: We needed them, the market was moving quickly, we had to get to market. In our minds it was better to buy businesses that had a track record of serving clients.”

Bootstrapping Is Too Slow

With the market changing so quickly and with huge accounts in the balance, Zieser and the rest of the executive team weighed the risks of a bootstrapping, entrepreneurial approach versus buying established expertise with an existing track record. “It’s really about how do you focus on delivering these competencies to our clients in a top-quality way?” he says. “If you find the right target, that’s a much more intelligent approach in our world, which is moving quickly. To me, as a corporate executive, it’s a lot less risky approach than trying to start something from scratch and putting it front of a Nestlé or Kraft and hoping it all works.”


Impacting the Traditional Model

While MXM operates as its own group, now making about $300 million in annual revenues (a far cry from Meredith’s custom publishing days), it has also had an impact on Meredith’s National Media group as well. The various companies that make up MXM now have a deep well of mass media-branded content to draw from and support their marketing services, and Meredith’s brands benefit from having a cutting-edge agency within arm’s reach. “Having cutting-edge marketing services is very useful—we often have National Media people sit in with pitches. We’ve also developed a profile of a company that is much more attractive to our clients than if we were to just stay in our traditional publishing role, there’s a halo effect as a result of these development activities,” says Zieser.

A unit within the National Media group, called Meredith 360, made up of executives attached to the big, national clients, also meets regularly with MXM and keeps them apprised on the strategic needs of the larger accounts. “It’s a useful pipeline to understand what our clients are looking for outside of traditional advertising,” adds Zieser.

Now, integrated marketing programs can run $1 million to $2 million per discipline (mobile, digital, social, etc.), but can run upwards of $10 million for a 12-month program across them all, some much higher.

Treading Lightly

In forming MXM, Meredith had a tight line to walk as each company was gradually integrated into the group and the company as a whole. In all cases, Meredith acquired entrepreneurial-run operations that were on the verge of stepping up to the next level and needed a bigger partner to make that happen. The owners didn’t want to totally liquidate and exit, and most of the deals were built on three-year earn-out models to keep the primary shareholders motivated and incentivized.

Nevertheless, the acquired brands had standalone value, and integrating them into the mothership too quickly could dilute that value. “We were very careful. These businesses are people businesses that have intellectual property—it’s human capital and expertise in that particular discipline. We were very careful about not integrating those businesses too quickly and not jeopardizing what made them special. But we were integrated from a revenue perspective very quickly,” says Zieser.

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04/12/2012

Publishing’s Next Gold Strike: The Emerging App Market


Emerging World of Apps !

Tonight’s post is a bit technical, but, by reading it, maybe we can pick up some insight by osmosis.

First, some definitions to help clarify:

API – Stands for Application Program Interface. It is a set of programming instructions and standards for accessing a Web-based software application or Web tool. A software company releases its API to the public so that other software developers can design products that are powered by its service — For example, Amazon.com released its API so that Web site developers could more easily access Amazon’s product information. Using the Amazon API, a third party Web site can post direct links to Amazon products with updated prices and an option to “buy now.” More detail and another example here.

HTML5 –  The latest and greatest programming language that is device-agnostic and can be used across all mobile formats/platforms. This is also important for ebook publishers to understand so when they want to publish to all mobiles with just one format they can find a service that employs HTML5. See “What exactly is HTML5?” for more accurate detail, I’m sure.

Apps are big business for the tablet and mobile platforms. They provide seamless progression to enhanced functionality for us users of all kind of digital services — such as digital publishing across all tablets and mobiles with just one format.

Magazine publishing leads the way in employing apps, but understanding there emerging use will also benefit all publishers including indie publishers 🙂

Bill Mickey, Editor of FOLIO magazine, explains it better than I ever could:

The APP Market: Models Are Emerging, But Which To Choose

As the tablet and mobile markets evolve, publishers consider their pricing and distribution options.

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02/12/2012

Publishing 2011 & 2012: Some Business Trends and Surprises


Publishing Industry Mergers Equals Growth

Media M&A (mergers & acquisitions) were up in 2011. 896 deals were done representing $47 billion dollars in value (damn, who says publishing is dying?). When M&A is up in an industry I believe it is indicative that value and growth is trending positive and money is flowing and churning!

Bottom line: publishing is NOT hurting. Some think it is because these figures don’t come close to the banner year of 2007 ($104 billion in deals done!) … Sounds like a bunch of spoiled greedy bastards to me 🙂   

But, the publishing industry (including, of course, digital) is growing and trending positive and the outlook for 2012 looks to be even better according to JEGI (Jordan Edmiston Group Inc.) , a leading independent investment bank for media, information, marketing services and technology.  

This insight (with charts breaking out the industry sectors) is from FOLIO Magazine by Bill Mickey

Overall Media M&A Up 9 Percent in 2011

Marketing and interactive services drive growth with 32 percent of total value.

The media M&A market saw its third year in a row of growth, closing out 2011 with a 9 percent increase in total value over 2010, according to a year-end report by The Jordan, Edmiston Group.

There were 896 deals done, says the investment bank, 15 more than 2010 and more even than in the blockbuster year of 2007. Total value, however, still hasn’t come close to that year. In 2011, the deals represented $47 billion in value, up $4 billion from 2010, whereas 2007 saw $104 billion in deals done.

A key trend in 2011 was marketing and interactive services, which represented 32 percent of total deal value and accounted for 17 of the 32 biggest deals, and a third of total transaction volume.

And while expectations remain high for private equity, strategic buyers were decidedly more acquisitive. Out of the 32 largest deals (more than $400 million), 24 were done by strategics.

Sector by sector—JEGI tracks 10—exhibitions and conferences recorded a 249 percent increase in deal value over 2010. There were 32 deals totaling $451 million. JEGI points out that the fourth quarter marked quite a bit of activity from strategic buyers, with UBM, Bonnier, Diversified Business Communications, PennWell and Reed Elsevier making deals.

Consumer magazines also had a busy year with 32 transactions valued at $3.2 billion, a huge jump over 2010’s $214 million deal value.

B-to-b media was comparatively quiet, recording only 14 deals and $50 million in value—a 62 percent and 91 percent decline from 2010, respectively. B-to-b online media and tech, however, spiked appreciatively in value. The year’s 63 deals were 2 more than 2010, but value jumped 132 percent to almost $6 billion.

Interestingly, mobile media and tech declined slightly in volume with 72 deals done in 2011 versus 77 in 2010, but value jumped 37 percent to almost $2 billion.

John’s Note: Before I send you to the parent article I want to define a couple business/investing terms for those that may not readily recollect them for convenience and better understanding:

EBITDA – Earnings Before Interest, Taxes, Depreciation and Amortization

Strategic Buyer – A buyer in the same line of business who wants to buy and hold.

Financial Buuyer – A buyer (usually from a Private Equity Group [PEG]) that wants to buy low and sell high.

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11/30/2011

Digital Magazines – The 2011 Stats


The tablet age (along with some other mobiles) is only about a year old … But, there have been digital editions for over a decade (and I didn’t realize that!). At any rate, the blossoming digital publishing age did come along at a time when print mags were sliding. And from all indications digital editions have revived the magazine industry … even pumping up their print sisters in some cases 🙂

Now, let’s get into some business performance numbers for 2011 RE this rather new industry … provided by Matt Kinsman, Executive Editor of FOLIO magazine

The State of the Digital Edition Industry in 2011

Publisher satisfaction grows but monetization continues to frustrate.

We’re only about a year into the tablet age but more than a decade of using digital editions. Today, with the rise of ever increasingly sophisticated mobile devices and apps, digital editions are poised to leap to the forefront of publishers’ revenue generation plans and serve as their flagship on devices such as the iPad.

But are they able to deliver? Nxtbook Media recently wrapped its 2011 State of the Digital Edition survey, which looked at audience development and revenue growth, as well as where mobile fits in.

The good news? Publishers on both the consumer and b-to-b sides are more satisfied with their digital editions than last year when Nxtbook first conducted the survey. However, there is some growing frustration as publishers continue with how to actually monetize digital editions.

Satisfaction Up by 40 Percent

Forty-nine percent of respondents said they are satisfied with their digital edition (12 percent are “quite satisfied” while 37 percent are “somewhat satisfied”), up 40 percent from 2010. “Publishers this year are more optimistic and they’re also more decisive than last year,” says Nxtbook marketing director Marcus Grimm.

However, while publishers are realizing digital editions have great potential for growing audience, they aren’t sure how to do so. Sixty-four percent of respondents say they are confident there are many more readers out there but they don’t know how to reach them (up from 59.3 percent who said the same last year). “That speaks to the youth of our audiences,” says Grimm. “Publishers are trying lots of things; we know readers are out there, but we’re not cracking the code. The iTunes store brought us to a totally different place—every time we think we have this space figured out, it changes.”

Just 21 percent of respondents said they know there are more digital magazine readers out there and they know how to reach them.

Still, Grimm advises publishers should strive for 15 percent of their readership to come from digital editions at this stage. “If you can get to that, it’s a vibrant number,” he adds. “It’s a large enough number that your advertisers will care about.”

Advertising Satisfaction

Publishers are less satisfied with digital editions as an advertising tool than as an audience tool. Just 29 percent of publishers say they are very or somewhat dissatisfied with the advertising revenue of their digital editions, about the same as last year.
However, the satisfaction gap between b-to-b publishers (Nxtbook’s main clientele) and consumer publishers shrank over the past year.

“The iTunes store has helped b-to-b pubs a lot and specialty optimized magazines are helping with sponsorship,” says Grimm. “Advertisers are getting excited about new optimized magazines.”

Still, just 12 percent of respondents say they have a firm handle on how to generate money with digital magazines. Sixty-one percent of respondents say their digital magazine can be a revenue generator but are unsure how to get to the next level.

Perhaps most troubling, the number of respondents who say they’ve tried many ways to make money with digital editions and are fairly convinced they can’t nearly doubled from last year to 8 percent.

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