New magazine joint venture faces tough uphill climb
Today the long-anticipated joint venture between Conde Nast, Hearst, News Corp, Time Inc and Meredith Publishing became official. These firms — all of them up against the ropes in an effort to deal with declining magazine ad revenue and the lackluster performance of online ad models — have decided that to face the digital future, they'd rather do it hand-in-hand.
The motivation for the union is simple: eReaders are taking over the book publishing world, meanwhile magazines are left in the dust, with no devices they can call their own.
I mean, really, have you tried to read Business Week on your eReader? It ain't pretty. And on the Kindle, most magazine publishers want to charge you for the painfully slow page turning experience of the device all in exchange for the convenience of automatic delivery to your portable device. So the industry — seeing a world that is evolving without their interests in mind — is joining hands to solve two problems:
- eReaders don't offer color. This is a major problem given that only a handful of magazines can be by on brains alone. The rest are literally like centerfolds of the month — if you can't see them in their colorful glory, they're not that appealing. The industry hopes to push for color eReaders that present magazine information in a manner that is more than just reflowable xml text, but incorporates the designer's touch — something Gourmet (may she rest in peace) would have needed to survive in digital. This combined venture will push for color and interactivity on devices that they'll approve for their content.
- eReaders don't have the advertisers' interests at heart. Amazon will eventually get to color, as will the rest, but even then, they won't really design their experiences to please advertisers who want to standardize on ad formats and use the platform for maximum brand impact. Magazines want that, though, and so they're going to push for a common spec and platform that devices must adhere to for top magazine content to be displayed. And then they're going to control the ads that get displayed next to their articles so that Amazon, Sony, or Barnes and Noble don't suddenly imagine themselves as ad avail resellers.
These are real problems, I agree, so it makes sense to collectively address them rather than create six or seven different approaches. And aside from the fact that such industry consortia have a tendency to reflect the past rather than build for the future, my biggest concern stems from this simple fact: the reason eBooks are selling so well on eReaders today is that there is no other way to get eBooks. If you want to read Dan Brown (all judgment suspended here), you can either do it on paper, or by buying an eBook. So book-optimized eReaders have tremendous power that a magazine-optimized eReader will never have. Why? Because magazine content is already available digitally, in an easy-to-consume full-color format, on this great thing called the Internet. No, really, look it up.
The only conclusion you can come to is that together, surrounded by other people intent on protecting the magazine business model of the past, these companies will conclude that it's time to put their content behind a pay wall (or euphemistically referred to as a "value wall" by many in the industry). That way, they'll insist, people have to use our digital eReader solution or they won't be able to get the content.
Uh-huh. In which case, people simply won't get that content anymore, and magazines will dwindle even faster. So we recommend the new venture make some very rapid announcements that affirm their interest in serving customers (rather than punishing or hiding from them), and we'll fire up our optimism. Otherwise, once we see "value walls" going up, we'll conclude that this initiative was a failure.