What the Selling of Forbes Tells Us about the State of Business Media (Part I)

According to the New York Times media columnist David Carr, Forbes will be sold to an international company sometime in the next few months. You can read his article, "Foreign Buyers Eying Forbes Magazine, a Chronicler of the World’s Wealthiest." 

But here are some lessons learned, gleaned from the article and our experience:

• Standalone magazine companies are at a disadvantage to conglomerates that can spread costs and profits across a family of magazines, according to Carr. For the most part Carr is right -- but Forbes actually publishes several other titles -- ForbesLife, Forbes Europe, Forbes Asia as well as 29 international editions. (It's probably not a good time to purchase advertising in Forbes Russia, Forbes Ukraine.) Forbes also runs a very popular website (more on that below) and RealClearPolitics.com family of website. Our point is: it's not just publishing a range of publications -- it's publishing magazines that reach a range of readers. After all, if you put all your eggs in one high-value Birken bag, when advertisers pull back on your demographic, you could get hit 29 times.
• Sometimes selling isn't a matter of making money but in preventing additional losses. The estimated price that Forbes may sell is $250 million (though some say that estimate is low). But Elevation Partners paid $264 million for a minority stake -- so their portion is certainly underwater. Carr says the Forbes family is unlikely to make money from the sale. The question becomes: why sell? Seems clear that the reason is that it continues to be tough for media companies to build value.
• The value shoring up Forbes is not its popular website -- but its conference division. The publication is probably generating tons of revenue from its growing number of conferences, including luxury cruises offering insights and access to top stock pickers. Conferences have re-emerged for Forbes and other publishers as a profit generation tool. Conferences may have been a difference in the valuation of BusinessWeek for $5 million (and the assumption of debt) when it was acquired by Bloomberg. The same for Newsweek, which had no conferences and was sold for $1 and the assumption of debt. The bottom line lesson: perhaps leverage a successful conference series and turn that into a multimedia property (which is what TED is doing). 
• Forbes could generate more money by establishing a paywall around its content. Carr makes the point that Carr makes the point that others -- including the Times and Wall St. Journal -- have successfully boosted revenue by establishing paywalls around their content. Yet Forbes.com aggressively promotes the website in a bid to generate views that can translate into higher revenue. It has been very successful in developing a community of columnists (many of them people trying to position themselves as thought leaders). The bottom line here: there's still no single, accepted way to generate sustainable revenue online -- neither free access (and higher revenue from advertisers) or paywalls (and subscription fees from access) are really replacing print advertising revenue that will never return to pre-mobile/digital levels.
• Circulation is holding steady but it may not generate steady revenue. Last year, Forbes was offering print subscriptions for $10 -- that's a steep discount from prior years. Keeping circulation high is important to advertisers (and the amounts you can charge them) but discounting clearly hurts profits.
• Forbes is very creative in finding revenue. It's been a leader in pushing advertorials. It can sometimes feel like a 1/5th of the magazine is devoted to advertorials. But more significantly, Forbes is a pioneer in native advertising (though I don't think that's the term they use) through its BrandVoice section on the website and in the magazine. Here's how Forbes describes it: "Forbes BrandVoice™ is an integrated and by-invitation content-sharing platform ...(that) is an innovative approach to integrating marketers’ content with Forbes’ editorial and users’ content — allowing marketers to demonstrate their thought leadership on the Forbes platform using the same tools as content creators." What does it take to receive an invitation to be a Forbes BrandVoice partner? We've heard estimates of $800,000 in annual advertising just to get to the point of discussing BrandVoice. (In other words, BrandVoice spending is on top of a company's annual advertising buy.)
• Not all ways of charging access are reader friendly. While Forbes doesn't charge to access its website, it does charge to access its content via your iPad. If you're already a subscriber to the print edition, Forbes charges $9.95 for an annual iPad subscription.  When you consider Forbes' $10 print subscriptions price, charging $9.95 to access the iPad version is like a 100% tax increase.

Carr makes the point that it's ironic that a magazine with a strong heritage of America-first is now being sold to an international company. I agree -- but I also think that the sale (likely to an Asian company) makes sense because Forbes is more likely to be seen as a trophy property for companies based in Asia than anywhere else in the world.

What Carr doesn't discuss or speculate is how an international owner will change Forbes. For that, stay tuned! You can check out a subsequent look at the selling of Forbes here. 

NY Times' David Carr Validates Media Still Distabilized Prediction

In our annual set of predictions, we said 

The media businesshas not stabilized... (and) publishers still have not found a sustainable business model.  

That prediction was validated earlier this week by media columnist David Carr in his article: "Print Starts to Settle Into Its Niches." Check it out about a look at Kevin Kelly's return to print book publishing.

Also, the Times validated "The Internet of Things" prediction and the one we made about the challenge of selling TVs when people are watching on devices. Check out "‘Smart TVs’ Are Next Bet for Makers as Sales Languish."

The New York Times Looks at The Times' Business Coverage

New York Times' ombudsman Arthur Brisbane raises interesting questions about coverage in his columns. One I meant to look at was a recent column, "Financial News for the Rest of Us," in which Brisbane looks at the impact of the growth of resources and digital space allocated to the Times' DealBook section.  Edited by Andrew Ross Sorkin, 10-year-old DealBook, which started out as a newsletter that aggregated breaking mergers-and-aquisitions news, focuses on Wall Street issues, and in print covers part of a page in the daily business section. Online, Dealbook now has a staff of 15, and is able to dig deep in its coverage, so sometimes it's very much inside Wall St. baseball.

Brisbane makes the point that while DealBook serves an important constituent among Times' readers, other urgent business stories may go untold.  While lauding DealBook's coverage of the Google acquisition of Motorola "served a broad readership’s desire to understand what this might mean for Google and its quest to exploit mobile technology," Brisbane wonders, "A week before that, though, when the world economic system shuddered and stock markets dropped, I was left wondering whether The Times should have spent its money not on expanding DealBook but on enlarging its stable of journalists aimed at the wider subjects of international banks and sovereign debt."

Brisbane provides insights into the print business section and the needs of the online reader when he quotes  Larry Ingrassia, the Business Day editor, who said, "that while in print The Times can succeed by broadly addressing 'the five or 10 most important things you need to know,' the Web demands narrower and deeper offerings."

Interesting perspective, especially when combined with a recent David Carr column in the Times: "News Trends Tilt Toward Niche Sites," which makes the point that news giants being outmaneuvered by smaller sites with passionate audiences & sharply focused information.

Will Newsweek Survive?

Newsweeklies used to hold an important place in our society. People would read their daily paper, then wait for the analysis from Time or Newsweek.

A key word was "wait."

If people get impatient for downloads to their smartphones (as compared to the former wait we had for dial-up service to connect), waiting four days for a printed magazine to appear is endless.

That's a big problem for just about every weekly still be published. The one exception: The Economist, which is doing quite well, actually, publishing global economic and political news.

I think the latest (I prefer not to say "last") redesign of Newsweek was intended to mimic The Economist.

Unfortunately, that didn't work. And now Newsweek is on the block.

Check out two of David Carr's interesting New York Times columns about the fate of Newsweek, "A Cultural Artifact, on the Block" and "Changing the Course at Newsweek."

Does the Times Proclaiming "Why Twitter Will Endure" Mean We're in a Twitter Bubble?

I worry when I see articles like the one by NYT's media critic David Carr.

Carr is a smart reporter, understands technology, and is a Twitter user (@carr2n). But my concern is that an article like "Why Twitter Will Endure" may mean we're officially in a Twitter bubble.

Going mainstream is not a bad thing, and Twitter is not like some underground band that's selling out, and will lose its cred.

But don't forget: Twitter still hasn't figured out its business model. And there are lots of companies offering free services in the Twitter eco-system that have not figured out how to monetize Twitter or their own services yet, either.

When clients ask if Twitter is the equivalent to CB Radio in the 70s, I tell them no -- for many reasons, includnig some Carr cites, and including the fact that you don't need specialized equipment, just Internet access and a keyboard.

But somehow someone's got to monetize it or the platform won't be able to endure; it'll just move on to the next thing, much the way Friendster flamed out and was overtaken by MySpace, which seems to have been overtaken by Facebook.

How is the Post-Print Mindset Changing Journalism?

In his compelling column, "After a Year of Ruin, Some Hope," New York Times "The Media Equation" columnist David Carr wrote about some of the positive changes impacting the media.

For one, Carr points out that some "old-school magazines...are moving very aggressively to refashion their brands for a tablet world and rightly so" -- that is, they're embracing new platforms. The key is for publishers to to move out of the nomenclature of 'subscriptions' for content and into the universe of 'applications,' there may be some gold in those hills."

Carr also points to changes in journalism as a result of new technologies and platforms:

• "On the subject of Twitter, we should point out that new generations of consumers are now guided to important news by the recommendations of trusted friends, and increasingly, they point to great reporting in sources that didn’t exist just a few years ago."
• "The founder of Gawker, Nick Denton, told me in a note that The Huffington Post and TMZ have demonstrated that news scoops are the coin of the realm and that Gawker will be heading in that direction. He suggested that the Web was further atomizing into sites that create original content and break news, and others that alter photos, float wild speculation or just gin up any old thing that will draw traffic."
• "And just as new media have absorbed the enduring values of traditional media — developing sources, making phone calls — so more established players are adopting the tools of the insurgency."
• "Meanwhile, journalism schools are no longer content just to teach the inverted pyramid. A few weeks ago, I was at CUNY’s graduate school of journalism to help judge presentations from more than a dozen teams of young media entrepreneurs. There were some clunkers, as there always are, but there were also some scary good, real-world proposals from students who don’t have to think out of the box because they were never in one to begin with."

My question: how are you seeing journalism change to adapt to social media and new platforms? I'm not interested in a debate of whether the evolution is good or bad -- that's irrelevant because it's happening regardless. What will be different about how journalism is practiced in 2010? Will traditional media focus more on breaking news -- before it can be validated by two or more sources? Let us know.

NYT's David Carr May Be Right That Business Media Has Changed Forever -- But Steve Jobs Continues to Be a Great Cover Subject

As I wrote earlier this week, Is NYT's David Carr Right? Has Business Media Changed Forever?, business media probably has been changed forever, due to the advertising decline and the impact of the Internet.

But in his column, "Business Is a Beat Deflated," David Carr said he thought we had reached the end of the period of CEOs-as-gods cover stories.

Well, someone forgot to send the memo to Fortune.

Fortune just crowned Steve Jobs: CEO of the Decade.

Do we really need to determine the CEO of the Decade?

Is most of this decade one that most CEOs -- whose tenure has gotten shorter and shorter -- would prefer to forget?

And, by the way, for the record, I pointed out that there was an exception to the no more CEOs-as-gods stories: "Steve Jobs, who still gets adulation."

That prediction proved correct far more quickly than I had expected.

Is NYT's David Carr Right? Has Business Media Changed Forever?

New York Times media critic David Carr has written an interesting article about the state of business media in his column, "Business Is a Beat Deflated."

In the article, Carr wrote, "While the business of business may be back, the business of covering it with heroic narratives and upbeat glossy spreads most certainly is not. And probably never will be."

I think that the nature of business coverage will have to change, that we're not going to see many CEOs-as-gods stories (with one exception, Steve Jobs still gets adulation).

That's not to say we won't see cover stories on CEOs. We will. They just won't be as glowing profiles, for the most part.

I don't think that's a bad thing since the CEOs I've met have generally been very smart but also very human, too.

Turning Distribution Into Revenue

The thing about journalism is this: reports of its death have been greatly exaggerated.

People continue to want news. They just don't necessarily want it in print form.

It's too slow. It's about what happened yesterday, after all.

It's not convenient. You can have it delivered to your home or office or pick it up from a newsstand -- but the printed newspaper isn't available on your smart phone, your iPod, etc.

It's too expensive.

What's interesting is that technology has transformed the first two complaints: you can now get real-time news updates and you can access it on your smart phone, on e-readers like Kindle, etc.

Technology has improved distribution of the news. But while it has brought some costs down significantly, technology still hasn't generated revenue streams to pay for the news.

Even providing an iPhone App hasn't solved the revenue question, as reported in the New York Times, "There’s an App for That. But a Revenue Stream?" Check out "For Murdoch, It’s Try, Try Again" by the Times' David Carr, which looks at ways Murdoch, the Times, Boston Globe and others are thinking about getting consumers to pay for news content.

As Murdoch told the Times, "Quality journalism is not cheap, and an industry that gives away its content is simply cannibalizing its ability to produce good reporting. The digital revolution has opened many new and inexpensive distribution channels but it has not made content free. We intend to charge for all our news Web sites.”

By doing so, Murdoch and others will establish a wall that will prevent search engines from finding the content, and reduce the number of people able to access that content. Then it will become more important for PR functions to use social media to raise awareness of the coverage about their client or organization.

Still, the first challenge is to get people to pay for general news. Check out a New York Times article from today about the Financial Times, "Financial Times Feels Vindicated by Web Strategy," which looks at how the FT's strategy of putting its content behind a pay wall has been paying off. Up next for the FT is a system of micropayments.

Can Newsweek's Redesign Boost Its Prospects?

Magazines love to redesign themselves -- seeing the revamp as a way to update the look-and-feel of the outlet as well as its mission.

The latest example is Newsweek, which David Carr at the New York Times calls "Fourth-and-Long Journalism at Newsweek."

Carr notes that the redesigned Newsweek "will no longer attempt to re-report and annotate the week's events -- an expensive, unsustainable approach to making a weekly news magazine." Newsweek is going to focus on reporting on inside the Beltway, serving as a non-partisan voice against a cacophony of partisan print and blog voices. Additionally, Newsweek will not cover breaking news -- as it used to do -- but that it will do so if Newsweek is "truly adding to the conversation," according to Jon Meacham, Newsweek's editor.

In an editor’s note about a redesign of the magazine, Meacham wrote, “As the number of news outlets expands, it is said, attention spans shrink; only the fast and the pithy will survive.”

Meacham's right. The question is will this redesign enable Newsweek to survive.

For PR functions, the evolving role of newsweeklies including Time & US News means that the way we reach out to them, if at all now, has to evolve as well.

No more free content -- NY Times' David Carr recommendations

The New York Times' David Carr wrote a very interesting column about the future of print journalism, "United, Newspapers May Stand."

Some of his ideas include:

• No more free content.
• No more free ride to aggregators.
• Throw out the Newspaper Preservation Act.

Check out the article for more of Carr's insights.

Also check out "What is Bad for Newspapers Might be Good for the World...." by David Cohn, a journalist turned entrepreneur. Currently running spot.us a nonprofit to support indy journalists. In response to Carr's piece, Cohn writes that "I think we have LOTS to lose if newspapers go under. But I also think there is an inflated sense of self-worth" in articles such as Carr's. According to Cohn, "Yes - putting content online for free has caused economic problems for newspapers - but it has made mankind better:

• How many people have been informed because newspaper content was made available online for free?
• How many people made better decisions because they were engaged in online conversations - that reacted to newspaper content?
• How many young people learned to appreciate high quality journalism because it was easy to access?

Again, check out Cohn's post, too.

Christian Science Monitor to Cease Publishing Print Edition, and the Latest in Bad News for Newspapers

The Christian Science Monitor, founded 100 years ago by church founder Mary Baker Eddy, has announced that it will be the first national newspaper to cease publishing a print edition. The last printed regular paper will be published in 2009.

Some of the coverage, including the AP's "Christian Science Monitor to end daily publication," read like obituaries. I kept expecting to learn that survivors include the Christian Science Church and a diminished newspaper sector.

Meanwhile, the Audit Bureau of Circulation announced the latest circulation figures for U.S. newspapers -- and the figures are not good for the country's top 10 papers by circulation.

Only USA Today and Wall St. Journal boosted circulation -- by 0.01%.

• The New York Times: -3.58%
  
• Los Angeles Times: -5.20%
• New York Daily News: -7.16
• New York Post: -6.25%
• Washington Post: -1.94
• Chicago Tribune: -7.25
• Houston Chronicle: -11.66
• Newsday: -2.58

The Audit Bureau looked at 507 newspapers, and the average circulation drop was 4.6%.

Sunday circulation dropped faster than weekday circulation -- which is unusual.

So the question is: when will other papers stop publishing print editions? And if they stop printing hardcopy versions, should we stop calling them papers?

In today's Times (which I read after initially writing this post), David Carr's article, "Mourning Old Media’s Decline," makes an important point:

The paradox of all these announcements is that newspapers and magazines do not have an audience problem — newspaper Web sites are a vital source of news, and growing — but they do have a consumer problem.

Stop and think about where you are reading this column. If you are one of the million or so people who are reading it in a newspaper that landed on your doorstop or that you picked up at the corner, you are in the minority. This same information is available to many more millions on this paper’s Web site, in RSS feeds, on hand-held devices, linked and summarized all over the Web.

“The auto industry and the print industry have essentially the same problem,” said Clay Shirky, the author of “Here Comes Everybody.” “The older customers like the older products and the new customers like the new ones.”

In other words, there's still a need for newspapers -- but the delivery mechanism is outdated. Unfortunately, so to is the business model, which depends on print advertising. But there's no doubt that more papers will join the Christian Science Monitor and will stop printing hardcopy issues. I still think there'll be a demand for print editions for another five years; after that, who knows? But I do believe we still need branded journalism -- at least online.

More Bad News for Newspapers, Part IV? Part V?

It's difficult to keep track these days. Another day, another piece of bad news for the newspaper industry.

I write this, as always, as someone who loves newspapers, and wants to see them succeed.

But things are pretty bad, and the New York Times continues its coverage of an industry in decline. Check out "Newspapers Could Be Bargains, but Few Are Buying" by Richard Perez-Pena.

This time out, Perez-Pena reports that a lot of newspapers are being shopped around, but no one's really interested.

Or, to pick up the quote from Ken Doctor, a newspaper analyst with Outsell, "A year ago, the conventional wisdom was, 'Yep, there are problems out there, but there's still significant value. Now it's 'Run away."

The latest paper hitting a wall is the Newark Star-Ledger by David Carr. Owned by Advance Publications, which is owned in turn by the billionaire Newhouse family, the Newark Star-Ledger is, in the words of of Donald E. Newhouse, president of Advance, "cannot be sustained by us or anyone else...This is the reality we face. The perfect storm. And it shows no sign of letting up."

That could be a negotiating tactic with the unions -- and Advance is asking unions and non-union employees to make concessions. But the Newhouses tend to be good owners, a case Carr makes.
The Newark Star-Ledger is a good paper.

But that may not be enough to keep it going.

How Fox Plays Hardball -- Fox News Media Relations, that is

Fascinating story by David Carr about the challenges when Fox News is part of a reporter's new beat. Check out "When Fox News Is the Story."

The article lays out the aggressive, political-campaign-like tactics that Fox News deploys against reporters who it thinks has written negative articles about the channel. My favorite tidbit: According to Carr, despite repeated calls by Timesman Jacques Steinberg for a recent article, "the public relations people at Fox News did not return his requests for comment. (In a neat trick, while they were ignoring his calls, they e-mailed his boss asking why they had not heard from him.)"

The reason for playing hardball? According to the head of Fox News' Media Relations, Brian Lewis: “Yes, we are an aggressive department in a passive industry, and believe me, the executives and talent appreciate it,” Mr. Lewis said, adding that with the 24-hour news cycle and the proliferation of blogs, a new kind of engagement and activism was required."

The article is filled with anecdotes about how Fox News media relations operates. An interesting coda is that the online version of the article has a correction in it: Carr had referenced TV Guide as being owned by News Corp. when in fact News Corp completed its sale in May.