From Disruption to Experimentation: The Power of Magazines IDEAlliance PRIMEX EAST Conference Keynote

Malcolm NetburnChairman CDS Global

Malcolm Netburn

© 2014 CDS Global. All rights reserved.

July 2014

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From Disruption to Experimentation: The Power of Magazines IDEAlliance PRIMEX EAST Conference Keynote

I had the pleasure of speaking at the IDEAlliance PRIMEX EAST Conference on June 19, 2014, where I shared my passionate view on print magazines, digital content and the bright future of the media industry. Below are my collected remarks from that keynote.

Mark Twain once said, “Reports of my death have been greatly exaggerated.” Who would guess

that, 117 years later, we would still be using that phrase? For years, print has been touted as a

dying medium – a relic of the past stubbornly holding on naively in hopes of a resurgence. And

through it all, we have too often taken the bait. Media professionals lamenting that fate publicly.

And even more glaring, lamenting in the very products where great brands have been forged,

where great relationships with audiences were created.

For many, that train of thought still holds true today: that print is dead – or at least dwindling –

like a wounded caribou on the African savanna. But before we call it time for print to quit, we

need to take a rational, unbiased look at its role in the larger content ecosystem.

We need to look at the facts and not conventional wisdom. Print works. The reality is: print still

plays a major role in content distribution and consumption. The top 25 print magazines reach

more adults and teens than the top 25 regularly scheduled primetime TV shows.i Readership is

consistent across generations,ii seeing less fluctuation among age groups than TV, Internet and

radio. And consumers are spending a significant amount of time – 40 minutes on average –

reading each print issue.iii Its values can’t be overlooked.

Even in this age of disruption, print maintains a powerful place in the ecosystem of content

distribution. The moment we forget that, we endanger the power of content everywhere.

While it would be naive to not recognize the decline in print as new channels have expanded our

ability to reach our audiences, it would be equally negligent to discount it completely.

Digital has an insatiable appetite for content. That is both its strength and its weakness. In its

limitlessness, there is risk of degrading the value of content. Consider other media. How many

times have you clicked through 400 television channels only to realize that there is really nothing

on? There isn’t a lack of channels or programming. There is a lack of great content, of great

quality. In this context, it may be of no surprise that more than 150 print magazine titles have

thrived for more than 50 years; only nine TV programs can say the same.iv

While I am not arguing for print dominance, I am evangelizing the belief that print holds a

critical position in the content ecosystem. It is the nurturer – the basis of many brands, of many

voices. Of experience and trustworthiness and accountability. And it elegantly coexists with

current and emerging digital channels that serve their own purposes of brand extension and

consumer interaction.

© 2014 CDS Global. All rights reserved.

Malcolm Netburn

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July 2014

Magazine brands are respected sources of content, and the magazine itself – ink on paper – has

been and is still the pulsing heart of those brands. That heartbeat, that creative energy, powers

digital as well, creating a healthy ecosystem of interconnectivity. Today, it is also true that a brand

must continue to nurture and change its print format or run the risk of creating an unhealthy,

unstable ecosystem – like an ocean starved for oxygen. Removing or giving up on that printed

word, however, runs the risk of pulling the rug out from underneath the brand itself.

We must ask the question, given the power of brands and the respect that print has garnered for

quality and trustworthiness, would online content be as valuable without it? In many cases, no.

We can’t underestimate the power of print, metrics, circulation and brand power. Of course, we see

early-stage adoption of digital only. Quartz from Atlantic Media is a great example. As a thought

leader in news and political information, Quartz is doing incredibly well in digital. But a good deal

of that success derives from the credibility and discipline that comes from an organization that has

been successfully building its brand value over more than 150 years with The Atlantic Monthly.

The strong, early move toward digital can partially be attributed to the fact that magazine readers,

in general, have proven to be early adopters of technology and new content distribution channels.v

Because of early adoption, though, we are now seeing some declines in digital as consumers have

recognized the value of print within the ecosystem. Digital revenue growth rates slowed slightly in

the past year to 12.6 percent (from 13.7 percent),vi and digital subscription levels are just starting to

rise again after a strong start followed by a quick decline.vii While this could change in the future –

I don’t think any of us would claim that print will always and forever be the prevailing medium –

it is hard to picture many valued magazine brands that could exist without the printed magazine.

In the future, digital will be much better and print will be very different (and there will most

definitely be less of it), but I don’t see that in our short-term future. For all the buzz of a digital-

only world, print delivers both the content and financial goods that power the best and largest

magazine brand companies today. And that’s important because it dictates how we charge forward

through the disruption of the past several years and prepare ourselves for a strong, healthy future.

Moving from Disruption to Experimentation and Beyond

Disruption is a term that we have been hearing constantly in our business. Let me be the first to

declare this age of disruption over. You can stick a fork in it – it’s done.

In the age of disruption, common wisdom declared the magazine dead. Specifically, we were told

consumers weren’t reading print magazines anymore. They were obsolete because of their fixed,

non-interactive format. So, the age of disruption has been our Dark Age. And it is now giving

way to become the age of our Renaissance. If I may be so bold, I would like to label it the age of

experimentation. Experimenting in creation of a full content ecosystem, replete with print, Web,

mobile, apps and more – more that are emerging and more that we haven’t yet even conceived.

And if we are bold, if we seize the moment, this is our time. This could be our golden age.

© 2014 CDS Global. All rights reserved.

Malcolm Netburn

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July 2014

In this age of experimentation, content is delivered in flexible, mixed distribution networks that

actually address the many differing and changing needs of our consumers. Our audiences can

seamlessly digest content from one format to another, with technology and tools that help lead

them to more of the content they are interested in. We call that distribution agnostic.

Throughout this magazine revolution, we will also be experimenting with the virtues of the printed

magazine and how we shape content. We are able to do that because we are much more in touch

with how consumers are digesting that content. Magazines are still very influential and serve as

a critical source of the content consumers crave. They continue to be one of the most powerful

mediums for advertising. In fact, print magazines are the most preferred media to look at ads, and

they rank No. 1 in advertising engagement and acceptance.viii

Above all, they can be trusted. Print is more researched, edited and digested, having cooled from

the heat of the moment, presenting details without the stream-of-consciousness chatter that

bombards us on the Web. In most cases, print drives the brand. Like the Ralph Lauren polo shirt, one

of the first pieces of clothing that defined the Ralph Lauren brand, print is the constant, the staple.

The print magazine will remain vital, powerful and valuable. And value always generates money

over time.

But, of course, the age of experimentation is not only about print. It is about the collaboration

of print and digital. To create an accurate map of the magazine experience, we need to drop the

“versus.” It is not print versus digital. Print and digital do not exist at the expense of each other;

they enhance each other. Of all American adults, 91 percent read print or digital magazines,ix and

the share of total revenue from digital and e-commerce has climbed from 12 percent in 2011 to

24 percent today.x It goes without saying that this is great news for the content ecosystem and is

a testament to the combined power of print and digital.

Print and digital sit well together. In a balanced ecosystem of content, we enjoy and need to receive

content in multiple channels. It is a balance of mediums where each serves a purpose and helps to

enhance the consumer experience. We don’t need to re-create magazines in digital – the mediums

support one another. So the pendulum, having swung way off into the land of digital, finds itself

looking for the sweet spot. A place where different mediums support, rather than cannibalize,

each other.

Creating a Healthy Content Ecosystem

In the end, it is about coexistence. We need to recognize the vitality of print – the fact that it offers

consumers a trusted experience, and an interactive one at that. We need to recognize that print is

the brand nurturer and an integral part of our content ecosystem.

We need to welcome this age of experimentation – the innovation that it breeds and the rise of

digital that allows us to interact with audiences on new levels. How print and digital can work

together to build strong brands and create unsurpassed content experiences. This is the

challenge – and the hope – of our age. And we need to recognize how we can use standards

and process to add structure to innovation, effectively reaching consumers and measuring success.

Really, it is all of these things together that make for a healthy, vibrant ecosystem.

© 2014 CDS Global. All rights reserved.

Malcolm Netburn

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July 2014

But where do we go from here? If we are entering the age of experimentation – our Renaissance –

what’s next on the horizon?

I believe we will see a golden era of communications. There is a need for consumers to get greater

access to information, and we now have a much more democratic way of obtaining it. In this golden

age, consumers will have much more access, choice and interaction, and that will come in various

channels across the print and digital spectrum.

Where disruption found us lost and pessimistic, questioning our own existence and future, we are

seeing a light at the end of the tunnel. The age of experimentation is our opportunity to solidify

our efforts and to engage consumers through a content ecosystem that gives them the information

they want and need across any number of channels and formats. That is why I implore us to go big,

to go bold.

And as we gain ground, we will experience the richness of the new golden age of communications.

i MPA 2013/2014 Magazine Media Factbook, http://www.magazine.org/node/26924, 12.

ii Magazine Media Factbook, 8.

iii Magazine Media Factbook, 13.

iv Magazine Media Factbook, 84.

v Magazine Media Factbook, 20.

vi FOLIO: & CDS Global, State of the Media Industry: Benchmarks & Trending Study Fourth Edition, available July 2014 at http://www.cds-global.com, 7.

vii CDS Global, Aggregate Client Data.

viii Magazine Media Factbook, 16.

ix Magazine Media Factbook, 7.

x State of the Media Industry, 11.