The Health of Magazines: Blame Cable As Much As Internet

More and more I'm noticing my cable lineup looks like a magazine rack. Used to be, television was a scarce resource. As late as five years ago, it was still being programmed for large audiences – at least a million, if not more. If folks wanted well-produced niche content, they…

More and more I’m noticing my cable lineup looks like a magazine rack. Used to be, television was a scarce resource. As late as five years ago, it was still being programmed for large audiences – at least a million, if not more. If folks wanted well-produced niche content, they had to go to magazines. Now they can go to the internet as well, but until recently, I thought magazines could still compete for a smaller audience’s attention if they stood out as a voice for a particular community.

But I now believe magazines as we understand them are eroding, succumbing to the twin tides of niche cable and what might be called the second wave of Internet publishing.

First, TV. Cable seems to have finally realized that in a 500-channel universe, not every channel can garner a 20 rating. Hence a willingness to do focused, niche content that aspires to just several hundred thousand viewers at a time. This strategy can produce breakout mini-hits like Trading Spaces and Queer Eye, but in general, it seems cable has figured out how to make money selling audience sizes based on metrics quite similar to those of magazines. Thumbing up and down my cable menu, I feel like I’m at the magazine rack at Barnes & Noble – there’s 25 different sports titles, scores of shelter books (that’s the home/hearth category for you non-magazine folk out there), plenty of music/pop culture plays, even programmatic equivalents of “Guns&Ammo.” None of these shows, save perhaps the pop culture stuff, do more than 500K in audience on any given day. In other words, TV has managed to segment audiences into the same demographic/psychographic buckets that once were the sole purchase of magazine land. PVRs only accelerate this trend, adding the convenience of search and storage to the magazine rack concept. Add in the fact that the average cable bill in the US is more than $40, and you have a subscription+ad model, just like magazines. I should also note that the advertising business has shifted in kind: production costs have been driven down by technology, and buyers now understand how to buy spot and niche cable. End game: TV wins head to head against print. Just ask the publishers of Life.

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Gurley on Cable Regulation: Counterintuitive Thinking

I subscribe to Bill Gurley's Above the Crowd newsletter, and always find his insights worth the read. (Bill is a VC at Benchmark, and a former partner of mine on the Internet Summit conferences.) His latest missive, "Cleaning Up After the Ninth Circuit in an Attempt to Save the Internet"…

I subscribe to Bill Gurley’s Above the Crowd newsletter, and always find his insights worth the read. (Bill is a VC at Benchmark, and a former partner of mine on the Internet Summit conferences.) His latest missive, “Cleaning Up After the Ninth Circuit in an Attempt to Save the Internet” is an exercise in counter-intuitive thinking. When I first read about this decision, I thought it was a victory against the evil cable companies, who I am always willing to believe have nothing but their own monopolies at heart. The ruling said, in short, that cable lines had to be viewed as telecommunication services rather than information services. The distinction was important, as it meant the cable lines were subject to the same sharing rules as phone lines. In other words, it could open cable up to competition, similar to what the RBOCs already face.

Given that for three of the past four years SBC felt my neighborhood was not profitable enough to offer DSL, and I had to get it from Speakeasy, which offers service on top of SBC lines, I thought this kind of a ruling was a good idea – maybe there would finally be someone like Speakeasy who could offer me cable modem speeds and who had a clue about the internet (Comcast clearly does not – don’t get me started on that one).

Bill makes the case that while the intent of the court may have been good, the result could be crippling. I am not sure I agree with everything he writes – much of it is pretty rigid anti-regulation sentiment – but he makes some good points. Among them:

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The Salesforce IPO

So Marc's company will go first – the first of the companies on everyone's list of '04 IPOs to drop an S-1 at the SEC's doorstep. Here's the Merc's story on it……

So Marc’s company will go first – the first of the companies on everyone’s list of ’04 IPOs to drop an S-1 at the SEC’s doorstep. Here’s the Merc’s story on it…

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The “Creeping Googlization” Meme

Alex Salkever of Businessweek gives Google an interesting business model once over, leading with a scenario in 2006 where Google runs just about everything web-related. He introduces the term "Googlization" – which I take means the creeping (his word) dominance of Google over nearly all forms of informational commerce on…

Alex Salkever of Businessweek gives Google an interesting business model once over, leading with a scenario in 2006 where Google runs just about everything web-related. He introduces the term “Googlization” – which I take means the creeping (his word) dominance of Google over nearly all forms of informational commerce on the web.

Salkever points out that all the new features Google is adding end up stealing traffic and revenue from other companies, starting with the example of Google’s new ability to track FedEx packages:

“Perhaps more important, Google is providing this new shipment tracking service even though it doesn’t have a partnership with FedEx. Rather, Google engineers have reprogrammed it to query FedEx directly with the information a user enters and provide the hyperlink direct to the customer’s information.
No doubt, this is an ingenious way to keep people at Google longer. By extension, the search giant can create more online real estate to sell ads on. But with every new service, Google takes a slice of someone else’s pie. Its ability to find pizza places within any given Zip code ultimately eliminates the use of YellowPages. Using it to find word definitions diminishes the business proposition of online dictionaries.”

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Don Logan Speaks

An interesting interview in Ad Age with Don Logan, Chairman of Time Warner's Media and Communications Group (he runs the Time Inc. and AOL businesses, among others). He's an old Time Inc. guy, and that company has been running out of steam of late, reporting its first ever quarter…


An interesting interview in Ad Age with Don Logan, Chairman of Time Warner’s Media and Communications Group (he runs the Time Inc. and AOL businesses, among others). He’s an old Time Inc. guy, and that company has been running out of steam of late, reporting its first ever quarter without profit growth. So he’s got two “troubled” units. He speaks about a number of issues, including putting Time Inc. content behind the wall at AOL, launching new magazines, and whether or not AOL should be sold (not if it remains a “sustainable business,” hmmm…). (link via Rafat Ali, thanks).

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Network TV: It ain’t working

What a surprise (see my rant below). What *is* surprising is for Ad Age to hype the fact. SURVEY: NETWORK TV DOES WORST JOB OF PROVING ADVERTISING ROI…

What a surprise (see my rant below). What *is* surprising is for Ad Age to hype the fact. SURVEY: NETWORK TV DOES WORST JOB OF PROVING ADVERTISING ROI

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Where Are All the Viewers?

While I was in NY this week talking to media types this article was published in the NYT, asking why the new network shows (such as The Next Joe Millionaire et al) were not drawing in the young viewers they were designed to snare. "It's a mystery" seemed to be…

While I was in NY this week talking to media types this article was published in the NYT, asking why the new network shows (such as The Next Joe Millionaire et al) were not drawing in the young viewers they were designed to snare. “It’s a mystery” seemed to be the theme of the article, which went on to blame everything from Iraq (!) to complicated television hardware. Please! Doesn’t anyone at the Times realize these folks are online, and on cell phones, or simply not interested anymore? If a show sucks, or seems to suck, or – particularly – if their friends are not *talking about it*, they will tune it out, or watch The Daily Show on TiVo, or whatever.

The article has a built in presumption that whatever is heavily hyped by a network will certainly draw its appointed Neilsen rating. After all, they hyped the new shows during the baseball playoffs, and those had great ratings! What went wrong? Steve Outing points (in E-Media Tidbits) to the lack of interactivity in these shows, but that’s only part of it. It’s also that the networks have failed two basic tests of making good media in the Internet age – connecting with a built in community (as all great magazines, sites, and blogs do), and promoting through trusted channels. The only real promotion Fox does for its shows is…during other Fox shows. And the only thing they are selling is the same kind of television experience as everyone else – titilation and escape. That’s not exactly a diverse ecology, and audience members are wising up.

It’s interesting to note that “hits” like Queer Eye or Trading Spaces have devoted audiences in the hundreds of thousands – audiences that look remarkably like magazine readerships. Hmmmm. More on this to come.

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Again, The Death of Tivo

The NYT's piece today on TiVo once again questions the company's prospects, and lays the blame for its possible demise on cable obivating the company's hardware business by incorporating TiVo-like features into set top boxes. But as usual the piece ignores the implications of what happens to consumer choice and…

The NYT’s piece today on TiVo once again questions the company’s prospects, and lays the blame for its possible demise on cable obivating the company’s hardware business by incorporating TiVo-like features into set top boxes. But as usual the piece ignores the implications of what happens to consumer choice and the future of ideas (in the Lessig sense) if we allow cable companies to control what features are available on PVRs. Not only do we lose the freedom to tinker, we also push intelligence, such that it is, into the cable companies’ systems, and away from the edges. Sigh. Time for Apple to step in?

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