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Consumer Mags Are Waking Up

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Consumer magazines are finally waking up and extending their brands online. This past week, the Magazine Publishers of America supported online progress through its first-ever Digital Awards. Why are the largest magazine groups focused on digital initiatives right now?

The Challenges:

Publishers began watching community sites which attracted their targeted audiences, and also found their own readers interested in unique online content and social functionality. They've been left behind, while their readers are discovering completely new ways to find and share their specific interests online.

Also the magazine business isn't growing much. Publishers are seeking higher growth advertising opportunities online, while adjusting their expectations for print-based advertising and subscriptions. Some are already testing the waters and finding much higher profitability percentages in the incremental online revenue they are generating.

The consumer mags are fighting an uphill battle. When they go online, magazines are not wielding the same clout because other players have been reaching their targeted audiences for a while. Most of these well-known brands haven't found traffic or achieved the revenues they hoped for…yet. Let's look at what they're doing to grow their communities online these days, to attract and keep visitors.

Leaving Web 1.0:

At first, magazines created virtually identical online editions. Peter Meirs, director of alternative media technologies at Time, states the failure: “I believe there is a small core audience for digital magazines but the present model – digital facsimiles that meet the formatting rules for ABC and BPA – does not resonate with most readers.” Time still uses plenty of text content, and looks towards video as its next “must-have,” per Time's Betsy Frank.

Martha Stewart Living's president and CEO, Susan Lyne, is re-thinking their whole online strategy. In Mediaweek, she said they made early mistakes in taking the magazine directly online without adding anything else. She said all magazines are asking, “What is it that's different about this medium and what can it do that's different?” Lyne believes the answer lies in community features.

Digital Adoption Details:

The Bivens Group conducted a study to see what the Top 50 most circulated magazines are actually doing online. Overall the site content is limited, and continues to be focused on driving print subscriptions. While some digital functionality is getting used by these bigger players, they are far from early adopters:

* RSS feeds – 48%
* Message boards/forums – 46%
* Registration required – 38%
* One reporter blog or more – 40%
* Video offering – 34%
* Podcasts – 14%
* Bookmarking – 14%
* Article comments – 8%
* Tags – 6%

New Business Goals:

In Folio, Matt Kinsman reports that “More consumer publishers are closing their magazines in favor of Web sites...but just how committed are they to an Internet strategy?” Some examples include brand extensions Ellegirl.com and TeenPeople.com, as well as FHMOnline.com for men. All have left their print roots behind.

Last year, Folio surveyed consumer magazine CEOs and most absolute revenue growth is expected from print editions. In particular, 77% of smaller publishers (under $10 million) and 57% of larger publishers (over $10 million) rely on the traditional advertising and subscription sources.

Yet publishers are shifting and investing more in their online efforts, intending to build up their internet-based revenue component over time.

Marta Wohrle, vice president of Hachette's digital media, gets the big picture: “We've done five-year plans for every brand online and we think we can get 20 percent of our income from online/mobile company-wide. In terms of profitability, the proportions should be much higher, possibly 40 to 60 percent. Overall it's going to be a smaller business but the margins overall may continue to be much, much higher.”

The magazine publishers are playing catch-up but are showing their intentions. It's significant that their MPA trade group, which typically champions magazine print advertising over internet advertising, has made a clarion call. Let's see how the magazines follow though.


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