Sunday, February 27, 2005

One magazine organization

The division of the Canadian magazine industry into several different associations -- consumer magazines, for trade, for editors, for the magazine awards, for circulators, for newsstand marketers -- has always been easy to understand, but difficult to justify. It is quite possible for disparate groups to gather in one place -- witness the Creating Canada conference in Ottawa a couple of weeks ago. But maintaining that collegiality and focus seems to be the issue.

With the likely change of name of the Canadian Magazine Publishers Association to Magazines Canada come this June, comes also a first rate opportunity for the creation of a more realistic alignment of the various organizations. Magazines Canada has the potential to be the umbrella organization for all kinds of magazines and magazine organizations. The inclusive name could be inclusive in fact.

The merger of Magazines Canada with the CMPA appeared to be achieved relatively painlessly, at least from an outside perspective. With this, the organization that used to promote the larger consumer magazines continued its promotional role but now on behalf of all consumer magazines, including the predominantly smaller members of the CMPA.

There is no obvious reason why such an umbrella can't cut similar and appropriate deals with almost any existing organization, as it has with the National Magazine Awards Foundation. The NMAF has retained its own board and its own autonomy while moving into the CMPA's offices in Toronto and enjoying the benefits of shared facilities and services. Such an arrangement would probably suit the Canadian Society of Magazine Editors (CSME). And, for instance, why couldn't there also be a self-governing division or caucus for contract and custom publishers? And for association magazines? And literary magazines? And religious magazines? Each could have as much togetherness as it could handle, perhaps with its own advisory board or committee, but enjoy the undoubted benefits of having a robust, national office with a professional secretariat.

Trade magazines naturally value their autonomy and point to their very different needs and takes on some issues like relations with Canada Post and government support programs. But there is nothing to say that the Canadian Business Press (CBP) couldn't fashion its own relationship with Magazines Canada. Maintaining autonomy in governance and programming doesn't preclude sharing offices, support staff and clout.

This last aspect -- having the various parts of the Canadian magazine industry speak with one voice -- will never be easy, but it will be made more likely and possible by cooperation on the prosaic issues of serving memberships by becoming a "big tent". For one thing, Canadian Heritage and Canada Post would have a harder time playing one part of the industry off against another.

Shameless plug

What's the benefit of doing this sort of thing unless, occasionally, you manage to plug something that matters to you? In this case, it is a new course debuting this spring at Ryerson University. It's called So You Want to Start a Magazine? and it's intended to be very practical, very specific and very accessible. The target audience for this course are people who are actively considering or imminently going to start a magazine and want to do it right. I am teaching it (hence the shamelessness of the plug). The first course runs Saturday and Sunday, April 2 and 3. There is another scheduled for Friday and Saturday, May 27 and 28

If you'd like to know more, go to

Feel free to pass this along to anyone you think might be interested.

End of plug

Saturday, February 26, 2005

Nausea-inducing cover colours

Is this some kind of trend? The March issue of Toronto Life has a day-glo orange cover, which goes not at all with its trademark red logo background. Then this week Report on Business Magazine close-crops Ted Rogers and displays him surrounded by the most off-putting day-glo violet imaginable. What were the art directors, the editors and the publishers thinking?

Picking on an easy target

It seems there isn't an event at which industry gossip is prevalent but when someone says something disparaging about Maclean's magazine. There can be various opinions expressed: either that the magazine is crap; or that nobody reads it; or both.

Perhaps every industry needs a whipping boy, and Maclean's is it. But isn't it curious that such disparagement seems to come from people who haven't read or subscribed to the magazine in years? The other day at a major industry event, one player said proudly that he rarely sees it except when he's in his dentist's office; however this didn't prevent him from opining on the magazine's defects. So, essentially, he was basing his opinion on hearsay and his six-month checkup.

Everybody doesn't have to like Maclean's, or even respect its journalism. But it's hard to argue with its publishing success. Its single copy sales alone outstrip the circulation of hundreds of other Canadian magazines. Its subscribers number 400,000+. And while the magazine is smaller in circulation than it once was, it is one of the largest titles in this country and reaches many people who subscribe to nothing else. That's reach and influence. Following the 'rule of 10', if this were publishing in the U.S., Maclean's would have a circulation of about 4 million.

It's hard to blame Maclean's staff for feeling beset by unfair criticism. They know that it comes from members of the chattering classes who have never worked there, don't read the magazine and don't subscribe to it.

Friday, February 25, 2005

The Daily Folly

The impending launch of Dose, CanWest MediaWorks's new "daily magazine" provoked the following reaction from M2 President and media guru Hugh Dow:

“This is insanity. There will be heavy casualties…and some major red ink appearing somewhere.”

It is nice to know that I am not alone in thinking the idea of printing 320,000 copies of Dose every day and distributing it through newspapers in Calgary, Edmonton, Ottawa, Vancouver and Toronto is just plain nuts. The key Toronto market will have seven daily vehicles: Star, Globe, Post, Sun, Metro, 24 Hours and now Dose.

Having apparently ignored the lessons of weekly follies like Saturday Night and The City (circa 1977-80 as part of the Sunday Star), CanWest MediaWorks and publisher Noah Godfrey are upping the ante and printing way more magazines daily than any advertiser will be prepared to support.

She didn't see it coming

According to a report in the Globe & Mail, Suzanne Boyd, the wunderkind editor of Suede (and former Editor at Flare) which was killed this week by Time Inc. after only four issues, was gobsmacked by the news. She never saw it coming, which may be part of the problem.

Editors who pay little or no attention to the economics of their magazines are doomed to be similarly surprised. It is not possible to maintain some elegant distance from "the money stuff" and editors should be suspicious of a company whose senior management says "You leave that to us."

The flat fact is that 70 or 80% of revenue for most consumer magazines come from advertising and the indicators are impossible to hide. One needs only count the pages and smart editors do exactly that. Even if they are being sold at a deep discount, the actual number of ad pages is a dead giveaway, particularly if the ratio of ad pages to edit falls below 40%. There is a reason why fat fashion books have 55% ad ratios -- they need that money to pay for the very expensive product.

Editors who pay attention to the relatively simple arithmetic of magazine publishing will never be surprised, even if they are getting smooth reassurances from their betters at corporate headquarters. Follow the money.

Common mistakes of small magazine publishers

As a consultant to the Canadian magazine industry, I've learned a thing or five...

1. Over-estimating revenue, underestimating costs

The single biggest, over-arching mistake that magazine publishers make is being too optimistic about revenue and not pessimistic enough about costs. Whatever can go wrong, will. Whatever you think will happen with revenue, it will never be as good as you think. People who start magazines are natural enthusiasts, and can therefore be optimistic to a fault. Often they start from an editorial perspective, ignoring, forgetting or not understanding the hard-headed realities of the marketplace. No matter how little, how precious, how literary, how niche-oriented, how noble your magazine is, no matter whether its revenue sources are advertising, subscriptions, single copy sales government grants, fundraising, personal wealth or various combinations, successful magazines spend less than they make.

2. Assuming that revenue means positive cash flow

Magazines, like all other businesses, move with transactions. In virtually every transaction, there is almost always a lag time between the deal and the completed cash collection. This is a fact of business and life and should not be a problem, assuming you are prepared. Unfortunately, many magazines get into trouble when they spend money they don't yet have, even when these transactions could easily have been delayed for 30 days, when the money is in the bank. Nobody ever went broke exercising wisdom, discretion and foresight.

3. Forgetting about Revenue Canada

You have to pay the taxes, you have to pay them when they’re due (or they get to be more expensive than they need to be) and magazines which forget that the Goods and Services Tax money or the payroll tax doesn’t belong to them, can wind up in hell…

4. Mismanaging the timeline

Surprisingly, many small publishers manage on the edge of madness – fighting each fire as it comes up and, as a result, having one fire to fight after another. As with cash flow, and the flow of transactions, almost everything in a magazine happens earlier or later than some publishers realize. For instance, you need a rate card and media kits as supporting tools for your advertising sales. But you wouldn’t start the calculation, design and printing of the kit the day you make your first sales call. You’d know that you would have to work back to have those critical tools available when you need them. Similarly, for magazines that have to advertise or promote themselves, it doesn’t do any good to start once the issue has been published. To do any good, you needed to start 6 to 8 months ago and have the campaign preceed the issue by a couple of months. Similarly, if you need to renegotiate your line of credit, or your printing contract you don’t want to start figuring it out the day before you go and call on the bank or your printer. If you’re going to make price comparisons, you need to put the book out to tender before youre printing contract runs out.

5. Avoiding the icky stuff

Many publishers get into small magazine publishing because they have something to say as much as that they want to be commercially successful. This is particularly true of editors who are also publishers. They frankly don’t like “the money stuff”. As a result, they put off to tomorrow that which they should deal with today. The result is sometimes that problems are more intractable and difficult than they neeed to be. Dealing with an issue while there is still time to fix it and consider various options is always preferable to having to make a snap judgement. Being decisive can be a considered process when time is on your side. This is nowhere more true than in managing subscriber renewals. Time and again, publishers come to grief because a renewal series is not properly managed, is late, or is missed altogether. The economics of magazine circulation is such that if you don’t ask for the order today, you won’t get the money tomorrow and by the time you realize your mistake, it will take you months to recover, if you ever can.

We did this to ourselves

A response to a recent column in Masthead magazine (Hooked on controlled), in which a veteran circulation manager says controlled circulation is the devil's work:

Like Scott Bullock, I am partial to the traditional paid circulation model, but unlike him I don’t see it as more virtuous or worthy than controlled. Most magazines are in the business of selling readership to advertisers. The central issue for most publishers is identifying and capturing a good audience and being able to prove its existence to the satisfaction of the advertisers. In this, controlled can work every bit as well as paid, sometimes better (after all, a paid audience is self-selecting).
Controlled circulation was the inevitable, and elegant answer, to the question: how do we reach and deliver an audience that our best customers, the advertisers, want to pay for?

Publishers, after all, long ago took the fateful step of charging readers less than it cost to produce their magazines. That advertisers call the tune is our doing. If there is any fault it lies with owners, publishers and their circulation directors who kept up the numbers by devaluing the product. Yes, we have the problem in the marketplace of American books artificially holding down the price that Canadian magazines can charge on the newsstand. But nobody forces us to sell our subs for $1 or less a copy. We do it principally to get audience. It is a strategic decision.

We have spent several generations convincing the public that they can get magazines for free, or nearly so. Yes, controlled circulation is free. But most paid magazines are all-but free; consider the per-copy price for which a venerable magazine such as Chatelaine sells a subscription (C$1.66 a copy). That’s much less than it costs to buy a greeting card and less than it costs to publish the magazine. As the late, great, Howard Gossage said: “An illustration of the utter madness of publishing economics [is] that a newspaper or magazine is the only consumer product, from bubble gum to bras, where the selling price has no relation to the actual cost of production. It costs less, for instance, to have a magazine delivered at home than it does to buy it in the store; try that with milk.”

What makes it virtuous for one magazine to charge a pittance to get readership yet somehow distasteful for another to go to the logical extreme and deliver their magazine free to a select, targeted audience? In neither case is the end user carrying the load. We’ve convinced readers that someone else will pay. We have done such a good job of this that the paid circulation model is under serious threat. To echo Mr. Bullock’s view: why would any sensible person pay for something they can get for free? Why indeed?

(Newspapers are now facing up to this issue and serious people are speculating about the possible death of paid newspapers in multi-paper markets like Toronto, where free papers like Metro are making serious inroads.)

In a world where the divide between free information and high ticket data and information services is becoming the norm, the era of the traditionally published and circulated magazine may be coming to an end. But that doesn’t mean renting audiences to advertisers will go away. If anything, the pursuit of advertisers is becoming so frenetic that pretty soon even the precision and efficiency of controlled circulation won’t be enough to satisfy them.

Might there then even be room for some readers to choose to pay all or the largest part of the cost of some publications? This would essentially amputate the advertising tail that now wags most of the magazine marketing dogs. But remember – we did this to ourselves.

Scott Bullock apparently laments that so many magazines get by without professional circulators and their bag of tricks. I would suggest that controlled circulation is just another trick, a proven way of getting real readers, which is what most magazines sell.

D. B. Scott