October 27th -- The Circulator
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| A weekly e-newsletter from Circulation Management | |||||||||||||||||||
| October 27, 2004 | |||||||||||||||||||
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TABLE OF CONTENTS Fulfilling Digital Editions: Fulfillment Behind the Scenes On the Road with Blood Horse Digital News Briefs Trend Features: Neodata: A Cautionary Tale Newly Available Lists
Trend FeaturesConnecting Fulfillment Behind the Scenes By Meghan Hamill
In an interview with The Circulator Stefan Beeli, vice president and Michael Jordan, director of operations for ESP Computer Services explain that "We allow circulators to operate in Internet have-it-now mode. We put people on file right away because it is all in real time," says Beeli. "What it lets them do is treat ESP as their own private fulfillment house by using our web services."
Circulators like to talk about the life time value of a subscriber, says Jordan, who was a circ director for 12 years prior to joining ESP. What ESP offers is unique--they provide that depth of information. "They really cross all products. You're getting a snap shot that is perfect data for a circulator to have and to act on and to promote accordingly," he says.
In 1997 ESP Computer Services started offering support for online paid Web sites with the launch of Variety.com. As a paid publication they didn't want to make their print edition obsolete by giving away content on the Web site. They decided to offer the web site for free to their print subscribers or as a stand alone paid sub.
Since ESP has a real-time integrated database--they check the database to determine the subscription status and verify it with a user name and password. To do this between two separate locations, ESP uses the Internet as the connection behind the scenes. This was customized just for Variety.com.
Eventually standards were established for these systems to communicate securely via the Internet using XML Web Services. XML allows authenticated users to have read access and update access to an integrated database in real-time.
One of their biggest clients, Reed Business International (RBI) explains that they chose to work with ESP as their print fulfillment company because they determined that the primary users of their Internet product would be their print subscribers.
"From a circulation point of view, the fulfillment requirements for subscriptions to a Web site are very similar to those for print. You must monitor expiration, collect money, renew, etc. The only difference is the password requirement," says RBI, circulation director, Jim Fischer. "As a fulfillment house for a b-to-b publication they are required to do virtually every thing regarding maintaining our subscribers."
RBI uses ESP for digital and print fulfillment. The approach has been to treat digital editions as just another method of delivering their product. "The benefit we are getting is the authentication process. The ID and password that protects our product--we built it to protect revenue," says Fishcer.
On the Road with Blood Horse Digital By Kristina Joukhadar
Blood Horse Publications caters to a unique kind of reader, which may explain why its subscribers are willing to pay for both print and digital versions. The owners, breeders and trainers who make up it's audience are affluent and they travel a lot. They want their weekly issues to arrive quickly, but also want them to contain commentary that goes beyond just the immediate news on Saturday's races.
With a digital edition, they get the news on the day the weekly issue goes to the printer (Monday), rather than having to wait until Thursday or Friday (or, if they are abroad, perhaps weeks) says Gene Sittenfeld, circulation director of Blood Horse Publications.
But many readers also want to be able to save the print issues, he says, which are known for their beautiful photography. Subscribing to both the print and the digital means that they can read the digital immediately while they are traveling--download it to their laptop--then come home to find the print version waiting for them.
Blood Horse offers three types of subscriptions: print only, digital only or "multi-media," which includes both print and digital, with a 15 percent discount off the combined price. For print subscriptions, there is a $10 savings for ordering with a credit card over the Web; for digital subscriptions, the order is placed through the digital supplier, Newsstand.
When asked how Blood Horse handles its subscription fulfillment for such a complex mix of products, Sittenfeld says they do virtually all of it in-house. He says there is just no way anyone else could care for the subscribers the way their own customer service people do.
Customers, says Sittenfeld, are part of the extended family, they are friends, and they want to deal with someone who knows them and can give them personal attention. The ability to offer either print or digital or print and digital subscriptions is just another way Blood Horse Publications serves its readers.
Neodata: A Cautionary Tale By Baird Davis
I don't think there has been a more serious consumer magazine supplier misfortune than the one foisted on Neodata back in the 1990's. It's the story of a misguided belief in the power of technology, of greed, the pervasive influence of money and an object lesson for publishers concerning the significance of protecting their precious supplier base.
Tom (Texas) Harbison, the new Director of Neodata, rode into sleepy Lewisville, Colorado in 1990 bearing wondrous gifts. We all knew that Tom represented the banking interests of Hicks Muse (a company most of us had never heard of, but would soon get to know). However, we weren't initially concerned that Neodata was now owned by leveraged investors, because the new owner/managers held out the prospect of a much brighter tomorrow.
They promised a new state-of-the-art system, replete with revolutionary parallel processing computers. Here was a supplier investing in the future without any (apparent) cost to its customers. What could have been better for the industry and for Neodata's clients?
Little did Neodata clients, or the publishing industry, know that this was the first step on Neodata�s long gloomy road to extinction. But those early new era Neodata days were very heady. Clients were surveyed to help determine the system functionality that would best suit their future needs. A huge cast of systems people were assembled.
Programmers crowded the Lewisville halls. Clients were wowed by the spectacle. It was enough to make many of us suspend our common sense.
We naively fell under the spell of the charismatic Mr. Harbison and his band of persuasive lieutenants. As the head of Ziff Davis' circulation efforts, at the time, and a Neodata client, I was one of many that at first wholeheartedly supported new management's revolutionary plans. The prospect of being part of an industry leading process can be a powerful aphrodisiac.
Well, as we all know, the proposed macro system development project (Ncore) was suspended, only to be heard as a flushing sound as it sped down the drain. I vividly recall the relief I felt the day the project was shelved and new management was announced. This was good news I thought. Neodata could stop chasing the illusive Texas dust storm and get back to the basics that made it one of the industry's finest suppliers.
But we were soon to learn that the horrendous system development cost (I've heard it estimated at $100 million) was not, as we had thought, like Lubbock, Texas, in the industry's rear view mirror. Somebody had to pay for all those misspent system development dollars. Guess what? The 800 pound system investment gorilla re-shaped the ownership position of Neodata. It increased Plano influence and, eventually, in a nefarious deal with Hicks Muse, EDS became the majority owner.
Goodbye Mr. Hicks! Little old Neodata became a miniscule piece in Plano's enormous lexicon of products and services. What followed was a mammoth company's sometimes comical, and often misdirected attempt, to find a means to leverage their investment. This included several name changes (remember Centrobe?) that made the company appear as if it had entered the witness protection program.
In addition, there was a continually changing cast of Plano selected Neodata Directors, none of whom, of course, had magazine fulfillment or publishing experience. In 2003, 13 years after the Lewisville arrival of the man bearing the wondrous gifts, Neodata was mercifully relieved of its tenacious struggle for survival as an independent industry supplier.
The employees of Neodata, with a Herculean effort, nearly overcame the misguided efforts of their bosses. But in the end, the mountain was too high. However, for the magazine industry there are lessons to be learned from this misfortune, nine of which are shown below.
1. Never trust a Texan bearing gifts.
2. Never trust management that doesn't move to the headquarters location.
3. Never put faith in people that promise a messianic future, but have very little experience in the business.
4. Beware of service providers that are owned by leveraged financiers.
5. Don't trust country hicks or Texas (Tom) Hicks.
6. Beware of companies that Ross Perot has sold.
7. Follow the money--it always dictates where the power lays.
8. Beware of service providers whose primary business interests are not closely aligned with the service being provided.
9. Publishers can outsource services, but they shouldn't (ever) suspend responsibility for protecting their supplier base.
Zinio Adds Up Numbers, Signs New Mags By Kristina Joukhadar
Zinio announced today that with the signing of its new digital magazine accounts for Rodale, Institutional Investor and Hachette Filapacchi, and an expanded number of titles for Hearst, Primedia and Time Inc., it has now surpassed the 200 mark in the number of titles it handles.
Based on the company's examination of ABC and BPA Worldwide publisher statements for audited digital magazines, Zinio calculates its share to be 61% of the market for "all audited digital magazine circulation." 12 of the top 17 audited digital publications are distributed by Zinio.
"This is the first time anyone has examined the hard numbers against market share," said David Zinman, Zinio's senior VP marketing and product management. The very fact that more publishers are auditing their digital circulation means there is now enough critical mass to quantify. This is one measure of success, he said.
Global Circ Steady or Slightly Lower The 2004-05 edition of World Magazine Trends released by ZenithOptimedia Group and the International Federation of the Periodical Press found that U.S. ad revenues rose 6 percent for consumer magazines and 2 percent for business-to-business titles.
Consumer magazine ad revenues rose 9 percent in 2003, the strongest rate of growth of the developed magazine advertising markets.
Circulation was steady or slightly lower than the previous year in most developed markets. In most developing markets, magazine circulation continued to grow, fueled by rising incomes and increasing literacy rates.
The report also illustrates that fundamentally different business models operate for publishers in some key magazine markets. In all markets except for the United States and Germany, says the report, consumer magazine publishers derive more revenue from copy sales than from advertising.
Consumer Mag Growth increases 8.5% Consumer magazines ad pages in September saw the highest monthly growth in a year-and-a-half, increasing 8.5%, according to the Publishers Information Bureau. It is the biggest jump since March 2003. Ad revenues are up 17%, closing at $2.3 billion.
Glamour Awards Women on TV Glamour magazine will air its "Women of the Year" awards on television for the first time ever. The 15th annual awards ceremony will be taped at the American Museum of Natural History in Manhattan on November 8 as a one-hour TV special.
The winners will be announced in Glamour's December issue, which hits newsstands on Nov. 8. The show will air on Dec. 11 in the New York area.
Advertising-Free New Cooking Magazine The publishers of Cook's Illustrated launched Cook's Country, a magazine about country foods. The magazine is a celebration of food, families and communities. It carries no advertising, will be published bimonthly with a circulation of 250,000.
Spa Magazine Donates Sub Profits Luxury Spa Finder Magazine donated all subscription profits on Monday to the Breast Cancer Research Foundation, dedicated to preventing breast cancer.
The magazines parent company, Spa Finder will continue to donate a portion of its magazine subscription revenues, as well as a percentage of the proceeds generated by its spa gift certificate program the largest such program in the world through December 30th.
NEWLY AVAILABLE LISTSCQ Press List Portfolio (13,462 to 36,843 names, $85/M) The CQ Press division of Congressional Quarterly Inc. now offers eight postal directory lists generated by direct mail. Files include civil servants in U.S. courts, the federal executive and legislative branches and personnel in the Department of Homeland Security. Selects by recency, title, issue area, telephone numbers, state/SCF/zip. Contact: Edith Roman Associates (845) 731-2684
Patio Pacific Pet Door (25,941 names of catalog requesters, $80/M) List of catalog requesters and buyers from the last 12 months. These individuals are on average 50 with a $60,000 income. Selects by age, income, gender, state/SCF/zip. Contact: Midwest Direct Marketing Inc. (913) 686-2220
NavPress Resource Buyers (26,700 names, $90/M) Customer list of NavPress Resource Buyers of the religious periodicals publisher. Majority of the records identify individuals at home addresses, but the file does include some buyers from churches. The average unit of sale is $50. The median age of those listed is 44, with an average $64,000 income. The sources are 70% Internet and 30% direct mail. Selects by state/SCF/zip. Contact: Bush Company Inc. (949) 752-4210
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