Magazines Don’t Have a Digital Problem, They Have a Bundling Problem

PandoDaily reporting:
New media and publishing dynamics have changed the economics for magazines to the extent that it is simply not possible to continue with existing models. Much of the issue is that magazine publishers are misidentifying their problems, striving to find new ways to distribute their packages without acknowledging that those very packages are fast becoming relics, a testament to a time past, when publishers had the power of platform and could demand that readers come to them. The latest figures prove that approach is no longer tenable.
In the first half of this year, magazine newsstand circulations dropped 10 percent, according to the Audit Bureau of Circulations. “When 10 percent of your retail buyers depart over the course of a year, something fundamental is at work,” wrote David Carr in his New York Times media column yesterday. Just as bad, advertising is down 8.8 percent compared to the same time last year, according to the Publishers Information Bureau.
Lest you think this is just a paper problem, keep a close eye on what’s happening with tablet-only magazines. If publishers thought tablets were going to be the saviors of their industry, they must be really bummed out by recent news that The Daily is cutting a third of its staff and the Huffington Post has decided to stop charging for its iPad magazine after just five issues....
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In the future, magazine brands will be producers, endorsers, commissioners, curators, designers, and promoters – but they won’t primarily be bundlers. The bundle may still exist, but it will be a much smaller piece of the magazine business than it is today. The printed product, for instance, might ultimately be a prestige item distributed occasionally as a supplement to, or showcase of, the brand’s best work according to a particular theme or period of time. It’s difficult to envisage a printed product that in 10 years will be profitable when produced on a weekly or monthly basis.
This is bad news for magazines, but it’s not end news. Publishers are now coming to the realization that their current models are unsustainable in the tablet and smartphone era. People are going to lose jobs, magazines are going to close down, and the world will be poorer for quality content.
But the game isn’t over for journalists and editors – it’ll just be leaner and different....
http://pandodaily.com/2012/08/13/magazines-dont-have-a-digital-problem-they-have-a-bundling-problem/