By Linda Ruth
This week, to talk about the effect of the Pandemic on books, Jane Friedman, author of The Business of Being a Writer, joined the Pandemic Roundtable—Joe Berger, Samir Husni, Bo Sacks, Gemma Peckham, Sherin Pierce, and me.
Jane began by talking about how surprisingly resilient book sales have turned out to be. Compared to early 2019, 2020 sales are only down half a percent year over year. But bookstores themselves aren’t seeing the same resiliency. Sales in bookstores were down 33% in March, with more sales happening online, on Amazon, in Target and Walmart, and in other accounts that are not exclusively books.
In the same time period, dollars declined a bit more than units. This reflected the increased purchase of juvenile fiction and nonfiction; this category has a lower price point. The sales of ebooks as opposed to print also lowered the overall dollar volume. But that too has stabilized.
Joe: What percentage of book sales come from the independents?
Jane: That’s around 5%. These stores are still important in terms of their influence, they are courted by publishers and seen as tastemakers, but they’ve been hit hard, with overall sales down by a third so far. The migration of book sales online has been a challenge for independent bookstores.
Sherin: Our book distributor is asking for delayed billing for the independents to help them get back on their feet.
Joe: Hasn’t there been an increase in the number of independent bookstores, though? It’s one of the bits of good news we hear.
Jane: That’s misleading, in the sense that they’ve been tracking more types of stores as part of the category—used books, antiquarians, the Half-Price chain. So numbers of indies are up, but it doesn’t mean they’re robust.One huge happy story is the initiative James Patterson launched for indie bookstores, donating $500,000 to keep them going.
BoSacks: Have prices of books come down as a result of market conditions?
Jane: It would make sense in this environment. The big 5 have lowered some ebook prices but they haven’t promoted the discounts well, so it isn’t as widely known as it should be. Also, as a temporary measure, when the Pandemic hit, they cut the price on library licenses and made it easier for libraries to acquire digital materials.
Sherin: The library market is complicated—the big publishers are shortsighted in not marketing to them in a systematic way. It would help educate our population, elevate everyone in an affordable way.
BoSacks: What genres are doing well currently?
Jane: That’s morphed as the months have passed—originally it was children’s education, then it shifted to entertaining, cooking, baking. Anything in home, DIY, gardening, cooking, home repair—it all has taken off in April and May. Adult fiction was initially depressed but has now returned to normal with an emphasis on escapist fiction, like crime/thrillers.
Joe: So people like me reading pandemic/dystopian fiction are outliers.
Jane: Well, there was an upsurge in titles like Camus’ The Plague. Also classics have spiked—people are taking advantage of this time to finally read all of Ulysses.
Gemma: Anti-racism books have been selling out.
Jane: Yes, that’s correct, 15 of the top 20 on Amazon. An image has gone viral of all the books you’re supposed to read, and people are buying them.
Joe: What is the feeling about the new management of Barnes and Noble?
Jane: There is so much hope. People want the chain to continue. They’ve had 4 or 5 CEOs in 5 years. James Daunt is a respected figure in the bookstore world, although there is some criticism of how much Waterstones [in the UK] pays employees. No one knows how the chain will recover.
The following article has been edited and contains minor corrections from the original release in the Heard on the Web newsletter dated 5-31-2020
Scott Mortimer of Meredith Corp. joined Joe Berger, Bo Sacks, Samir Husni, Sherin Pierce, Gemma Peckham, and me for this week’s Publishing Pandemic Roundtable. BY LINDA RUTH
In the course of the current fiscal year (July through June), Meredith will have published 320 titles. These include a mix of one-off titles under major brands and also several with publishing partners, including, for example Chip and Joanna Gaines at Magnolia Journal.
In a down market, Meredith continues to put out new SIPs. How is this model working?
Scott: Coming into 2020 we were doing very well, on track, in fact, to increase 4-5% over prior year. The pandemic changed that, for us as it has for many; but in the last three weeks we find that sales are approaching pre-covid numbers.
Samir: I recently saw that Meredith is offering subscriptions to a series of SIPs, wherein you sign up for the series without actually knowing what topics will be covered. Is this a new initiative?
Scott: Yes, we’re testing it to see how it goes. LIFE had its best bookazine year ever in 2019, so we’ve been aggressive in putting out product under that brand. And you’re right, our subscribers won’t be able to choose the topics, they have to take what comes. We know the LIFE brand has tremendous equity and history, so we’re testing the idea, and will see how it goes.
Bo: brilliant idea.
Linda: A goodie box or grab bag.
Joe: where do you see your sales ticking up?
Scott: Primarily supermarkets, pharmacy, and big box. We have more pockets at checkout than we’ve ever had. Now it’s our job to put great products in those pockets; then we need the people to go past them. This is where we’re finding cause for optimism; in the last 3 weeks our past SIM buyers store visits were up 8% over the prior.
Gemma: What are you doing to support your customers now?
Scott: We wanted to focus on content that would support people at home—health and wellness, food, home, a PEOPLE Puzzler, all of these are in the sweet spot of what we do. We tried to be nimble and adjust. But we’re seeing gains across the portfolio.
Samir: you said your customers vote with their pocketbook, and overall we’re seeing magazine prices moving up. Do you see a cap on this, or is this the future model?
Scott: You’re right about that. At Meredith, most of our special interest content is $10 or higher. I do think as an industry we can charge more for our content, although we have to provide the value to support the prices. We’ll see if the current trends of unemployment slow it down at all. I’m sure there’s a cap but we haven’t seemed to hit it. Even very recently, our Kobe Bryant tribute specials did great at $14.99.
Sherin: Although you could argue that Kobe Bryant isn’t representative of the majority of specials. People love dead celebrities. In the current economy people are struggling. One of the first things they are likely to cut spending on is magazines. Have you adjusted your schedule in response to this?
Scott: I think you’re right, it may be a slow slog. As incomes become more tight that impulse buy might go by the wayside. Time will tell.
Sherin: Also people tend to hold back on spending due to uncertainty in an election year.
Scott: Over the last 3 weeks we’ve done a lot of scenario planning, and we’ll continue to work on scenarios based on what actually happens. If levels of sale are soft, we might not put as many releases out. Every issue goes through P/L and if it doesn’t work we won’t put it out.
Bo: It’s important to acknowledge that there are tiers of readership: the Bauer tier with its pricing and sales levels, along with other tiers with other levels of sale for higher-priced product. When we transform the perspective of the public that these are luxury items we’ll be better off.
Samir: Just recently in one of our sessions, Krifka of Barnes and Noble said they do treat this category as a luxury.
Scott: We’re fortunate to have content leaders with their fingers on the pulse of what people want.
Joe: Even as we transition to higher-priced, higher-value magazines, the underlying distribution framework isn’t set up for healthy or a luxury product. How do we let the public know that we have product for them at higher prices?
Scott: Agreed, we’re only as healthy as the channel. Discovery is the biggest challenge. A store might have 15 checkout lanes, of which six might be open, and your product might not be in every lane. How can we be sure people get to see it? Digital outreach is one way of driving awareness, and sending people to the store. At Meredith we have a database we can mine for good. Our partners are great at getting the word out, too. FOR THE COMPLETE ARTICLE CLICK HERE
By Linda Ruth
This week’s Publishing Pandemic Roundtable, a weekly group of BoSacks, Joe Berger, Gemma Peckham, Samir Husni, Sherin Pierce, and me, welcomed Tom Keeler. and Andie Behling of Morgan Murphy Media.
Morgan Murphy, headquartered in Madison, WI, operates TV and radio stations, a print magazine, websites, apps, and a digital marketing agency across its seven locations.
What effect has Covid-19 had on your companies?
Tom: Prior to the pandemic, while TV was still our most substantial source of revenue, our print property, Madison Magazine, was growing. In fact we had such a successful first quarter profit that was more than we’ve profited on an annual basis for years. Then Covid-19 hit, and everything changed.
What accounted for the success of your first quarter?
Tom: Part of it has to do with the consolidation of our sales efforts. Each sales person represents all our properties to a given account. They sell TV, radio, print, digital. And we cross-promote all properties across platforms, so you’ll see our events mentioned in the magazine, hear about our upcoming issues on TV, and so on.
Some companies treat their separate business entities as competitive entrepreneurial companies. IDG is an example.
Tom: Early on, as we acquired companies, we acted more like individual competitive units. Now we collaborate across platforms, with an approach that we’re all part of the same family of companies, and we find that approach works well for us.
Getting back to Covid-19, how have you responded to the enforced changed?
Andie: The team had to be nimble and committed. They had to move fast. We created all new content for upcoming issues of Madison Magazine—no easy matter in a business that works 4 months out. For example, our Road Trip Issue’s content had to be completely changed. One of the new features was Tune In to Take Out.
We updated our subscription messaging: Stay Connected. We encouraged our audience to stay connected to the community, through us, despite being socially distanced. We only have two weeks of data so far, but it’s looking like a successful initiative.
BoSacks: Sounds like you’ve built a strong foundation with the multiple platforms, and you are rolling with it.
Tom: That’s right. We’re continuing to broaden our revenue streams. Digital remnant exchange, for example, has become a good source of revenue for us.
What changes are you implementing that you see continuing after the crisis?
Andie: We’re moving most of our work to digital. As a result, we’re cutting down paper use and moving toward zero waste. This is how innovation happens: You’re forced to do something, and create a new system, a better system. We’re not going to go back to the way we used to do things, we’re working digitally due to the times and it’s working.
BoSacks: Covid has placed us in a time machine; it’s accelerated everything. If you were failing, the failure is accelerated. If you were robust before Covid, you are finding new ways of moving into the future.
Andie: When a competitor went down due to the crisis, we said: Let’s open up our pages to anything they want to publish. They submitted a feature about a local needle exchange program; Madison worked with them to get it seen and read—it was a six-page spread in our June issue, crediting Isthmus.
Joe: That’s a good model for city and regional publications to follow. As retailers consolidate, with small local chains getting absorbed into larger national ones, we need to present as a city and regional community to retailers. We need to use our combined retail power, which is considerable, to place city and regionals at front end market by market across the country. People might no longer want celebrity weeklies, but they want magazines about their community. This is worth bringing up with CRMA.
In psychology, cognitive dissonance is the mental stress or discomfort experienced by an individual who holds two or more contradictory beliefs or ideas at the same time. In 1936 F. Scott Fitzgerald said, "The test of a first-rate intelligence is the ability to hold two opposed ideas in mind at the same time and still retain the ability to function."
I'm not saying I have a first-rate intelligence, but I do have two thoughts that are rolling around in my head. They are that the publishing industry isn't in peril, but many of its employees may be. Let me see if I can explain without my head exploding.
First, the magazine industry was under stress before the rise of COVID-19. Each year advertising was down double digits, and so were magazine newsstand sales. There are, of course, many success stories out there, and that is important to recognize. You may be one of them. But when viewed as a whole, the charts and statistics were not pretty. I guess you can say there were many individual victories, but the war wasn't going well.
If you were struggling before February 6th, the day of the first reported death in the United States, there is no reason to think your chances are going to get any better. If you were doing well before, there is no reason you can't figure out a plan in the new developing normal.
Now is the time I point out that we don't know what normal is, and we haven't had our old normal since 2007. But the traditional methodologies and business plans that were in place in January 2020 are now mostly irrelevant. It also seems we have proved that our offices are quaint and irrelevant, too.
Presumptions of the new normal
To me, it seems apparent that we are in a time machine. A machine that accelerates whatever was happening before. If your business was in decline, that decline is now accelerated. If your business was doing well, the methodologies and the technology you used six weeks ago have taken a fast and technological leap. You have taken the entire process and launched it into the cloud. Sure we all worked in the cloud before, but not like this. Instead of taking years for the jump, you did it in days. One day you worked in an office, and the next day you stayed at home and worked, and you didn’t miss a beat. The cloud is your new best friend. You do everything but eat there. And for many of us, we are getting our food from the cloud.
Perhaps the toughest part for us to face is pulling the plug on the existing advertising model. It's fair to say that plug may have been removed for you.
Retraining Our Readers
We and the time machine we are in are also retraining our readers to get information from the cloud more than ever before.
One of my sponsors, the company Issuu, has 40 million publishers they work with if you can imagine that. The only way to have that many is for most to be hyper-local, but they have the middle and biggies, too. Issuu has 100 million reads per month. It isn't the only company having platforms like this, but since I have a relationship with them, I am aware of some of the details. Issuu said last week in the Publisher's Pandemic Round Table that readership is up 10-15% and climbing.
One of Issuu's clients said to me, "Basically we're looking at moving our magazines away from print to digital-only, largely as a result of the enforced lockdown making it harder to print and distribute." Multiply that comment by the thousands. Publishers are in the process of inventing the new normal.
Now here is the part when you ask me if printed magazines are dead? No, of course not. There will always be print magazines, and people who love the printed product. Mr. Magazine, Samir Husni, tells me his students prefer print. I believe him. But the majority of readership is moving to digital and we are diligently training them to do so. There will be printed magazines, but they will be expensive and extremely high quality. That is the only formula where print will work in the future.
Omar Khayyám once wrote:
"The Moving Finger writes;
and, having writ,
Moves on: nor all thy Piety nor Wit
Shall lure it back to cancel half a Line,
Nor all thy Tears wash out a word of it.
The world is moving on and our industry with it. People are increasingly reading magazines, newspapers, and books online. It is a fact. The new normal happens when we have a vaccine. Until then, which is probably a year away, we will be working hard and participating in the training of generations young and old to read online.
FOR THE REST OF THE ARTICLE CLICK HERE
FOR THE REST OF THE ARTICLE CLICK HERE
BoSacks Speaks Out: Many thanks to my friend Leslie Laredo who forwarded this article to me. It asks and, in many cases, answers one of the most important business questions in today’s digital world – What do we really know about the effectiveness of digital advertising?
My long-time readers will know that I have repeatedly posed the question of digital effectiveness for years but could never find the data or the experts to answer the question to my satisfaction. I’m sure some readers will have specialists in their offices willing to deflect or dispute the conclusions written here, and perhaps there is another side to the story. But, as always, color me skeptical.
This article is a must-read for anyone in our industry to digest. Please write your thoughts and analysis to me, so I can share them with our readers. Lastly, this a longer read than usual at about 10 minutes, but worth every second.
The new dot com bubble is here: it’s called online advertising
Jesse FREDERIK and Maurits MARTIJN - https://thecorrespondent.com/ - https://bit.ly/2SUWS9Y
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