Is print dead? A group of experienced media professionals tried to answer this question at a Gotham Media event at the Frankfurt Kurnit Klein + Selz PC law office last week. They agree print advertising revenue is declining, but the industry is still alive. The more contentious point was how to sustain the traditional magazine and newspaper industries.
It’s difficult to get a good sense of the pulse of these businesses. The magazine industry is at a 1.5 billion gross audience as of September 2014, up from 1.3 billion last year, according to the Association of Magazine Media. Martin Nisenholtz, founder of New York Times Digital, said their audience has expanded internationally.
The rise in numbers results from a larger digital audience. Mobile web use has risen 90% and more users are watching video and reading magazine digital editions.
With the movement toward digital, companies are trying to figure out the economics of their industry. According to Jonathan Knee, Senior Advisor at Evercore Partners and Co-Director at Columbia University School of Business’ Media Program, newspapers have 20% margins, which is good, but not as good as the glory days of 40% margins. It’s no longer enough to completely satisfy Wall Street.
Many longtime companies think the solution is to split up print and digital. Publicly traded companies Tribune Co., EW Scripps, Gannett and Journal Communications all had some type of division in the past few months.
Knee said as much as these broken-up companies try to put a “rosy spin” on the situation, in reality, one company is the one people actually want to work at.
Wolff thinks that in Time’s case, it’s hoping to reinvent, but it will be a dramatically smaller industry that it was before. He is also concerned that they won’t be committed to the real business of creating content anymore.
Natalie Margulies, Vice President at Condé Nast Entertainment, said the company is leveraging brand names to create content using the magazine’s distribution. It’s another form of content that reaches influential millennial and differs from “catch-up TV” on Netflix or Hulu and user-created content on YouTube.
“Magazines can’t be anything other than what they are,” Wolff said. “I think they should concentrate on the one thing they are able to do.”
Yet, according to Wolff, many media outlets, including the NY Times and Buzzfeed, are making videos because it’s easy to do.
The big question is whether or not digital advertising is effective. A recent study said people retain information from print ads better than digital ones. Digital ads are also cheaper than print and are omnipresent on the web.
“An unmentioned overriding theme in the industry is that digital doesn’t work,” Wolff said. “It will forever be an indication of declining ad prices.”
Nisenholtz defended making digital content, saying advertising agencies don’t create print ads. Online content brings in revenue streams.
With more people online and consumers largely unwilling to pay for content (save for low-price subscriptions like Netflix), digital advertising supports the content where the users are. Knee said smart aggregators like Facebook can make a lot of money because they’re actually in the data business.
Besides the money aspect of the media, at its most basic level, the news is our first amendment privilege to find out what’s going on around us, said Nisenholtz. He is concerned about what will happen if being a journalist is no longer a viable profession. The biggest issue is what happens in corrupt communities when there’s no watchdog.
“Who’s going to have the muscle as industries get stronger when journalism is getting weaker?” Nisenholtz said. “No one has the answer on a local level.”