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Thursday, August 25, 2005

Penton: Interesting Day 

PTON.OB: Summary for PENTON MEDIA INC - Yahoo! Finance

Probably just day traders messing with the stock, but Penton rose 41.43% today, on volume of 433,480 shares, about 6.8x the average volume for the past three months.

Of course, that's happened several times before.

I tend to think that Penton's (current) market capitalization of $17 million seems low, even with the debt load. But I'm probably biased.

Disclosure: I now can buy 41.43% more cups of coffee with the value of my vast Penton holdings. That is, until tomorrow.

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Inside Ad Page Counts 

I was tooling around the IMS/The Auditor website, looking for some data for a client, and came across the company's Magazine Health Watch (Click this link, then look on the left navbar under Publishing Solutions. I can't provide a direct link, evidently.)

You can grab and download significantly more data than you'll find in the usual ad page roundups, which use IMS' numbers, and there are some interesting data points that I haven't seen much highlighted in the b2b media trades.

For example, IMS/The Auditor shows that the number of advertisers it's tracking in b2b magazines has risen 13% this year-to-date (through July) versus last year-to-date. This is offset by the fact that ad pages on a per-advertiser basis are down 11%. But it's a number that also gives me hope. If b2b media is attracting more advertisers to our magazines, we then have an opportunity to increase the number of ads they place, if we do a good job.

Here's another interesting look: ad pages as a whole are up 1%, but per-issue ad pages are up 3% (we've published 2% fewer issues in 2005 than we did in 2004).

There's a profit impact in both of these numbers. Lower-frequency advertisers pay more, and should theoretically be more profitable on a yield basis to publishers (though some of this is offset by higher sales and servicing costs in going after lower-frequency business), and more ad pages in fewer issues at a higher yield is usually going to look good on the bottom line.

Of course, that's a generalization, as are most pronouncements on ad page totals, since the performance of individual markets and titles is so varied. But you can drill down a little bit into these numbers, and that make them food for thought.

Side note: ABM has launched T-BIN to track b2b trade show revenues and attendance figures.

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Jon Stewart: If It's Good, It's Good 

Daily Show host Jon Stewart is interviewed in Wired as part of that magazine's The TV of Tomorrow feature (see Rafat Ali for a scathing--and justified--critique).

I point to the interview for two reasons: it's funny, and it's thoughtful, two traits that make the Daily Show worth watching.

Two key grabs:

The Internet is just a world passing around notes in a classroom. That's all it is. All those media companies say, "We're going to make a killing here." You won't because it's still only as good as the content.

and

It's the idea that the content is no longer valued by where it stands, in what neighborhood it lives. What matters is what you put out there, not its location. I think that's what people have come to learn from the Internet - it doesn't matter where it comes from. If it's good, it's good. Just because our channel is after HGTV and right before Spanish people playing soccer doesn't make it any less valuable than something that exists in the single digits on your television set.

Both relevant thoughts for those of us in b2b media.

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Apocalypse Now Available on Newsstands 

GRID Media client Religion News Service has run this piece on the increasing efforts of some religious magazine publishers to gain shelf space on mass-market newsstands.

Grab: Karen Burk, a spokeswoman for Wal-Mart, said the inclusion of Charisma in about 250 of its more than 3,000 stores fits into her company's attempts to satisfy customers. Other inspirational magazines carried by some Wal-Mart stores include Guideposts, Moment and Gospel Today.

I'm surprised that fewer than 10% of Wal-Mart stores are carrying the title.

Side note: Oxbridge Communications' National Directory of Magazines (data on the MPA website) shows a 24% drop in the number of religion and theological titles over the past six years--and a 31.6% drop in the overall number of magazines in its database during the same period.

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Wednesday, August 24, 2005

Hollywood's Changing Business Model 

Summer Fading, Hollywood Sees Fizzle

The movie business is suffering mightily this year, and unlike the music business, doesn't have the convenient excuse of Internet piracy to blame for its problems. (Sure, there's piracy of movies, and a lot of movies can be found on the Darknet, but most people don't know how to find them). The New York Times article, linked above, neatly summarizes the situation.

Grab: Multiples theories for the decline [in ticket sales] abound: a failure of studio marketing, the rising price of gas, the lure of alternate entertainment, even the prevalence of commercials and pesky cellphones inside once-sacrosanct theaters. But many movie executives and industry experts are beginning to conclude that something more fundamental is at work: Too many Hollywood movies these days, they say, just are not good enough.

Well, duh.

The sad thing is that this isn't a new phenomenon. The vast majority of movies released are mediocre at best, but the movie business, over the past two decades, has been saved by luck and library. The luck comes from the occasional big hit that drags people to the theaters, and increases ticket sales for lesser movies. And the library--the vast collection of films owned by the studios--has been monetized by video sales (twice over, first with videocassettes, and then DVDs).

But this year, without any new breakout hits, luck hasn't been with the studios. And the libraries are getting exhausted, as evidenced by the slowdown in DVD sales. And that has exposed the deeper problems of the movie business.

One of those is arrogance. As Robert Shaye, the chairman of New Line Cinema says in the New York Times article quoted above, "[Y]ou could still count on enough people to come whether you failed at entertaining them or not, out of habit, or boredom, or a desire to get out of the house. You had a little bit of backstop."

Another is the desire of incumbents to protect their positions by blaming other incumbents. Movie studios blame theater owners for running too many commercials, charging too much for popcorn, and allowing the experience to be as pitifully awful as it is. Theater owners blame the studios for tightening release windows between theatrical and the aftermarket of pay-per-view and video, and for releasing poor product. But neither recognizes fully that years of abusing their power have allowed audiences to seek other forms of entertainment, and have allowed technology to create alternative ways to view movies that are a better value than going to the movie theater.

And it's technology that has changed forever the basic business model of the studios, as recognized by people like Robert Iger of Disney and Warren Lieberfarb, formerly of Warner Bros. They ponder a business where movies are released to theaters and home theaters simultaneously--the direction in which things are obviously moving. But the challenge is large for the studios' spreadsheet jockeys, because the current business model depends on careful control over how a movie is released, and where and when. If that control is lost, it's hard to see how the studios will replace the total revenue stream of a movie (from domestic theatrical, then international theatrical, and on into the downstream, which includes airline viewing, hotel room pay-per-view, home pay-per-view, DVD, pay cable, broadcast TV and a re-release on DVD as a special edition). And it's hard to see how the studios will market their releases effectively in a world where you can see a first-run movie at home on the day it's released, since so much of Hollywood marketing currently depends on the run-up to a theatrical release.

Much like newspapers, who won't be motivated to invest what it takes to effect a complete change in business model until it's too late (since they're focused on protecting their shrinking profit margins), movie studios will have to be dragged kicking and screaming into the next five years. (You may recall that when home video first started to rise, the studios went all the way to the Supreme Court to try to stamp out this threatening business. Thankfully for their bottom lines, they failed to kill home video).

So why this long post on the movie business in a blog about b2b media? Because all media business models rely on the same fundamentals, sure, and because the lessons of Hollywood matter to us, even if we'll never walk down a red carpet for the premiere of a new magazine or trade show.

Here are the primary lessons I draw:

* The quality of content matters. When content is marginal and commoditized, audiences will find other ways to entertain and inform themselves.

* Ownership of content doesn't guarantee the ability to control the business model. Audiences control the business model, always.

* Past success (and profit) hinders our ability to take a risk on the future, and we often only make fundamental changes when we're absolutely forced to, and not when it would make the most sense.

* Spreadsheets, budgets and P&Ls aren't business models.

I wonder what the b2b media business would look like if we started with a blank piece of paper--or, perhaps more appropriately, no paper at all.

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Tuesday, August 23, 2005

The Darknet 

Picking the Media's Digital Lock

I point to the piece linked above from the New York Times for two reasons. The first is this quote from the book "Darknet: Hollywood's War Against the Digital Generation," by J. D. Lasica.

"Because users don't like digital locks, somebody will figure out how to pick them, and content will spill into the Darknet [Lasica's term for the wild west arena of Internet piracy] despite the best efforts to wall it off. The best way companies can fight darknet piracy, they said, is by offering affordable, convenient, compelling products and services. In other words, the most effective copy protection system is a great business model."

Too true.

The second reason is that you can find large amounts of the book's content at the author's website. Proving his assertion, I read a few chapters, then ordered the book. Great business model!

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The Rules of Journalism 

The Lessons You Learned in J-School have Changed

The good folks at GameDailyBiz contemplate Jay Rosen's much-blogged post "Things I Used to Teach That I No Longer Believe" Was the Title of the Panel... and relate the Prof. Rosen's thoughts to the enthusiast gaming press. And, as usual, I think the enthusiast gaming press looks and acts a lot like the trade press in general.

Grab:

What is the enthusiast press here to accomplish? Are we here to encourage readers to love games? Are we here as a critical buffer between the readers and bad games? Are we here to build up this industry? Are we here simply to report videogame-related events as they happen?

The questions start here, and the foundational ethics that flow forth will be dramatically different depending on the answers.


You could ask the same question in a similar vein of any trade magazine. Read the full post, linked at the top, for more.

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"Gimmick" Ads 

Gimmicky Magazine Inserts Aim to Grab Page Flippers

From the Wall Street Journal (sub req.) a few weeks back, a piece on the "gimmicks" advertisers are using to attract attention to their print ads.

Grab: Advertisers are increasingly creating print promotions designed to stop readers in their tracks. A recent issue of Time Warner's People arrived in mailboxes featuring a replica of a bottle of PepsiCo's recently introduced Aquafina sparkling water constructed partly out of bubble wrap. "Bubbles are more fun," read the ad, crafted by Omnicom Group's BBDO.

I don't see these as gimmicks, but as intelligent ways to increase the value of print ad buys. We've had some terrific success in taking out Publishers Press' magazine: the magazine about magazines, which highlights a variety of unique print advertising applications. When our advertisers flip through this piece, it moves the conversation away from the value of print advertising to ways that the advertiser can take advantage of the capabilities of our printer and production department. And that's a good thing.

From the Journal piece: "One of the key people on our staff goes out virtually every day to advertisers with two suitcases of samples of product that we would love to get into a magazine -- like flip books," says Paul Caine, publisher of People.

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