2018 Print Forecast: Paper Prices & Postal Rates Will Rise

By: D. Eadward Tree

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Declining demand is supposed to cause lower prices, but the magazine industry’s key suppliers are likely to defy the law of supply of demand in 2018, with both paper companies and the U.S. Postal Service raising prices by a little – and perhaps by a lot.

Yes, folks, it’s that most wonderful time of year, when the kids are back in school and publishers turn their thoughts to everyone’s favorite annual task – budgets. Here to help you is Dead Tree Edition’s annual forecast of paper, postal, and print pricing, plus a few tidbits of advice and a bonus advertising forecast.

Paper Prices Will Continue to Rise

Told ya so.

In our print forecast for 2017, we warned that “significant moves in the currency markets . . . could be especially disruptive for U.S. buyers of magazine-quality paper.” The U.S. dollar promptly strengthened, making Mr. Tree sound like Chicken Little for a while.

But now the U.S. dollar is weakening, declining more than 10% against the Canadian dollar in the past 90 days. Not coincidentally, the price of magazine paper is on the rise and likely to end the year about 5% above its mid-2017 trough.

You can also blame the higher prices on single-stream recycling. The American practice of mixing paper, glass, metal, and plastics in the same bins raised the level of contaminants in recovered paper, making it a less efficient fiber source. Most U.S. mills that relied heavily on recycled pulp were forced out of business.

For a while, China’s pulp-hungry mills picked up the slack. But Chinese authorities recently responded to the poor quality by reclassifying much of the U.S.’s recovered paper as garbage and blocking its import. Panicked Chinese mills that relied on recycled have been snapping up virgin pulp, causing worldwide pulp prices to soar – and thereby increasing the cost of making paper.

The analytics firm RISI predicts prices for magazine paper will inch up another percentage point or two during 2018. Given recent trends, Mr. Tree thinks the prices could rise even more than that.

Expect a Postal Rate Increase

What we know for sure is that postal officials are planning to increase Periodical rates an average of about 2% in January. Co-mailed and large-circulation titles will pay less than the average, while smaller titles that don’t co-mail will pay more.

But the big worry is the unknown – what will come out of the Postal Regulatory Commission’s 10th anniversary review of the law that established the inflation-based cap on rate increases.

There’s been widespread speculation that the PRC’s review, likely to be revealed in the next few weeks, will ease the cap and allow higher rate hikes. Some reports have speculated about rates rising as much as 20%. Periodicals, especially those mailed by non-profits, are especially likely to get hit with rate hikes because the USPS supposedly loses money on those products.

Any significant breach of the rate cap is likely to face legal challenges, with implementation delayed at least for most of 2018. In any case, the best move for publishers is to work with their printers (or to find new printers) to take full advantage of co-mailing, dropshipping, and other methods of reducing their postage bills.

Custom Print Will Drive Growth

Ad revenue for consumer magazines will decline at an annual rate of 8.8% over the next three years, according to the widely cited PwC forecasts, while trade magazines will drop “only” 6%. That’s actually an improvement from recent reports of declines in the mid-teens.

But those are averages. The big general-interest titles are suffering mightily, while those serving specific interests, industries, or regions seem to be faring better. As in the digital world, the trend in print advertising is to targeted messages.

“Print advertising is dead – except for custom,” a veteran magazine-media advertising rep told me recently. He wasn’t whining; he’s had a pretty good 2017 in both print and digital sales.

That print success has come despite increasing difficulty selling ad pages. The same advertisers that balk at renewing $100 CPM magazine pages, he says, are eagerly shelling out 10 times that rate for custom distribution (such as an insert sent only to select subscribers or sponsorship of a magazine’s conference edition). Or even 100 times -- $10 per copy -- for custom publications. Digital printing technology makes this level of customization and targeting possible.

Digital advertising’s shift to native advertising and other forms of content marketing could be a boon to targeted inserts and custom pubs. When a company discovers what content works online, it’s not such big step to reformat that content into a printed piece that’s delivered to the company’s best prospects.

Magazine Printing Will Continue to Consolidate

The magazine industry might have grounds for filing an antitrust complaint regarding consolidation in the U.S. printing industry, except for two problems:

  • The U.S. Justice Department doesn’t understand the printing industry.
  • Magazines are no longer run by people who know anything about printing.

In the past two months, industry giant LSC Communications (AKA RR Donnelley) has snapped up two highly regarded, mid-size competitors that specialized in producing magazines, Creel Printing and Publishers Press. There was nary a peep from Justice because it views printing as a single industry with literally thousands of competitors – and therefore immune from antitrust issues.

The reality for publishers, though, is that only a tiny -- and shrinking -- fraction of the country’s printers is truly able to compete for their business. Unless a printing plant specializes in publications, it’s unlikely to have the bindery equipment, ad portal, co-mailing, dropshipping, digital-edition conversion, and a host of other factors and services the typical publisher needs.

Over the past couple of decades or so, the prices of publication printing have been mostly on a gradual descent (without even adjusting for inflation). But by gobbling up competitors, printers may be able to stabilize prices in the face of declining demand.

You never know when your current printer will disappear, so it’s a good time to get to know some other providers. Who knows, you might find one that’s better able to cut your postage costs or to help you produce innovative custom publications.


Author: D. Eadward Tree

Source: pubexec.com URL: https://goo.gl/JjXS7g

5 Ways Publishers Can Use Digital Printing to Get Personal & Drive Revenue

By: D. Eadward Tree

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A financial analyst who specializes in the printing industry recently speculated that “the potential to produce personalized magazines at scale is not too far in the future.”

He was a bit off: That potential already exists – and is irrelevant to most magazine publishers.

Here’s the question we should be asking: Is digital printing -- the technology that is already creating magazines that are personalized from front cover to back cover -- relevant to our business?

The answer is yes.

Let me explain: Most of us don’t need a “solution” that quadruples (or worse) our production costs, kicks us out of co-mail, makes inserts difficult if not impossible, and may require additional investments in writing, editing, photography, and design.

But digital printing – which has no fixed costs and can use data to give each reader a different version of the same page – is creating many real opportunities for magazine publishers. After all, it has revolutionized book publishing, created whole new types of direct mail, and enabled catalogs and retailers to deliver more precisely targeted promotions. Here’s a peak at what it can do right now for magazine publishers:

1. Inkjet Messaging

Most U.S. magazine copies are already personalized with a form of digital printing – the inkjetting of each recipient’s name and mailing address. It can cost next to nothing to add additional inkjet messaging to the cover, a technique often used by catalogs but rarely by publishers.

Imagine the possible messages:

  • Subscriber: “Marie, we’d hate to lose you. Please renew your subscription today!”
  • Acme Rocket executive (who’s a potential advertiser): “Acme Rocket made our Top 100! See page 84.”
  • Calling out a particular ad inside the book that is likely to interest the subscriber, based on her online behavior and newsletter subscriptions.

2. Programmatic Direct Mail

Programmatic direct mail is a lucrative, rapidly growing approach to marketing that cries out for the kind of content we magazine publishers create. Yet, as far as I can tell, the magazine-media industry is not even thinking about this opportunity.

The tactic involves identifying web site visitors who are prospective buyers based on such actions as their clicks, searches, and cart abandonment. Then, using databases that link online identities to physical mailing addresses, a customized mail piece – usually a postcard or mini-catalog – is digitally printed and mailed First Class to the prospect.

We publishers should have a leg up in this field: Not only do we have web visitors, we have relevant, high-quality content. Consider: If you’re thinking about buying a particular model of car, would you respond better to a simple sales-pitch postcard or to a mini-magazine that includes a Car and Driver review of the model? Many marketers who employ programmatic direct mail should be eager to license the use of our branded, trustworthy content.

3. Customized Cover Wraps

Sponsored cover wraps are a proven method of using popular magazines to reach highly targeted audiences – such as copies mailed to ENTs’ waiting rooms with a promotion for a hearing-aid brand. Now imagine if each cover wrap were customized with a listing of nearby dealers, perhaps with directions or a map from the ENT’s office to the nearest dealer.

This isn’t just hypothetical. Audience Innovation, one of several companies that offers marketing campaigns that use sponsored cover wraps on popular magazines, reports that it sometimes employs digital printing to customize the wraps. An insurance company’s campaign of cover wraps affixed to copies of Good Housekeeeping, for example, includes information about and a photo of the agent who is located closest to each recipient’s home. Doing that for a national campaign with traditional offset printing would be inordinately cumbersome and expensive.

4. Distributed Print

Using an international network of digital presses aboard cruise ships and luxury hotels, the PressReader service for years has sold same-day copies of daily newspapers and current issues of magazines in places that would be nearly impossible for the publishers to reach on their own. As the cost of full-color digital printing continues to drop, publishers may be able to build up their foreign circulation by printing in-country rather than using slow and expensive overseas freight.

5. Print-on-Demand

In the past few years, book publishers have cut down on the number of “just in case” copies they print, knowing that if they run out they can switch to digitally printed just-in-time copies. Although unit cost is more expensive than traditional offset-printed books, publishers can save money by printing fewer wasted copies and using less storage space. And they can make money on titles that would otherwise have gone out of print.

How many just-in-case copies does your magazine print? And how many times do you pass up opportunities – to capitalize on an issue that becomes a collectors’ item or to bolster the circulation of an issue with poor newsstand sales – because you don’t have enough copies?

With print-on-demand, bookazines and back issues could be sold on your web site with no upfront printing costs, inventory, or risk. You could offer commemorative books featuring compilations of your best articles on a particular topic, celebrity, athlete, or car. With a bit of programming, you could even let the buyer choose the cover photo or add a personal message to turn the book into a one-of-a-kind gift or keepsake.


Author: D. Eadward Tree

Source: pubexec.com URL: https://goo.gl/ihrpg3

Apple Launches iOS 11 with Redesigned App Store, Deals A Final Blow to Digital Edition Apps

By: D. B. Hebbard

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Already gone was the App Store inside iTunes, now Apple has eliminated the subcategories for publisher’s digital edition apps, and put the emphasis on the apps Apple wants to promote, or publishers are willing to pay to have promoted

It would have been hard to make the Apple App Store less useful for media app developers, but somehow, miraculously, Apple found a way to do it with the release of iOS 11.

The App Store has been a mess for a long time now, about four years actually.

To recap: in November 2011, Apple launched the Newsstand, its digital newsstand for publishers. It was an immediate hit with both readers and publishers, and everyone rushed in with an app. App vendors proliferated, many offering publishers a way to get their magazines or newspapers into the App Store for free, so long as they shared revenue with the vendors.

Some started to see a big problem pretty early on: readers who signed up for a monthly subscription, often to get a discount on a single issue, cancelled when given the chance each month when notified by Apple.

Apple, too, saw a problem: they are a multi-billion dollar company, and selling newspapers and magazines is penny-ante stuff. By 2013, Apple had simple quit on their publishing partners, and soon the App Store team stopped maintaining the subcategories — so important to publishers.

Apple did away with the Newsstand a couple of years ago and created the Magazines & Newspapers category. The advantage to publishers was that their subscription apps could now be in whatever category they wanted. The subcategories of Magazines & Newspapers, though, were not fixed and for the past four years, though the Newsstand and now the Magazines & Newspapers category, publishers have seen just how little Apple really cared about them.

Now, today, iOS 11 introduces a brand new App Store… and somehow Eddy Cue found a way to make the App Store worse.

The first thing you will notice with the new store is that it is divided into Today, Games, Apps, Updates and Search. I suppose separating out games from other apps is a good thing, simply a division that makes each section less large.

The Today section is all about Apple and what they want to promote. If you are lucky enough to have an app featured here you will see huge downloads.

In the Apps section, there are the same categories you’ve always seen, including the Magazines & Newspapers category. What about those subcategories, such as Arts & Photography, Automotive, Brides & Weddings, etc.? Well, they are gone. Completely gone. Now, the thousands of digital edition apps are all dumped into the master category. It is as if Barnes & Noble mixed all the magazines in their store randomly on the shelf.

But it is even worse than that.

Now, when the iPad or iPhone user opens up the Magazines & Newspapers category they are presented with a few apps promoted at the top (today it is the WSJ, The New Yorker Magazine and the NYT). Then below is a section called “Apps We Love” a collection of 17 apps selected by Apple. Below that is Top Paid and Top Free.

The only way a system like this could work would be if Apple had improved its search mechanism, so let’s test it out.

A search for “music magazines” gave me Tidal (which is music, but not a magazine) and Mormon Channel (no comment). A second search for “construction magazine” was much better in that it pulled up several familiar titles. It also pulled up the first ad I saw, for Fieldwire, a job-site app. A search for cooking magazines was similar, with familiar magazines found, plus an ad for Hello Fresh.

Did you notice that I did not link to any of the apps? That is because Apple has killed off the URL links for apps. You can search on your Mac or PC browser for, say, ‘New Yorker Magazine AND iTunes’ and the app will show up, but the link that was there to iTunes is now dead. Why? Because iTunes no longer supports apps.

(By the way, if you do not update iTunes the old App Store is still there, including the subcategories inside Magazines & Newspapers.)

So, what does this mean for publishers? It means that creating a digital edition app for Apple’s iOS no longer makes no sense. The platform that for years was the one developers looked to first when developing media apps should now be the last. I’ve completely flipped in favor of Google’s Android as the most important mobile platform for publishers.

Of course, one could still launch standalone iOS apps, but it will be terribly hard to promote them, you can’t link to them any longer, so your reader will have to know exactly what the name is and how to find it.

Many people have believed for a while that the digital edition app is dead, but I have held out hope that they were wrong. But because of the way the new APP Store is designed, launching a new iOS media app into any category will be like throwing a pebble into the sea, then trying to retrieve it.

Other changes effecting publishers:

Apple News in iOS 11 has a new tab called “Spotlight” where Apple selects news stories, picked by the Apple News editorial staff, each day. Readers using the feature will undoubtedly boost the readership of some stories.

Right now, TNM’s traffic through Apple News is like the heart beat of a very old person: peaks followed by long periods of silence. On good days, Apple News readership dwarfs that of the web, but that is because the Morning Brief tends to include political news, that is what Apple promotes. The posts that most TNM readers come to the site to find hardly are ever read through Apple News. No surprise, I suppose, Apple News is terrible for trade publishers.

Safari in iOS 11 places has a new feature that prevents websites from tracking readers across multiple sites. This doesn’t limit the ads, but it does limit the useful data marketers will receive.

“This could be a double edged sword for publishers,” Keith Sibson VP of Product & Marketing at PostUp told TNM. “The change in Safari will make programmatic advertising less effective with those users, and especially impactful to retargeting ads.”

The move is designed to be of benefit to web readers, but it will once again prove how unfriendly Apple is to marketers.

“This could help drive advertisers further into the arms of Google and Facebook, which do not rely as heavily on 3rd party cookies to track users and so will be less affected by this change,” Sibson said. “However, with this change programmatic ad technology firms deliver less value for advertisers, and ad-tech firms have been taking a larger and larger cut of advertising spend. So it could be beneficial to publishers in that advertisers may be more motivated to buy ad inventory directly from publishers, which is far more lucrative for the publisher.”

A few other impressions:

iOS 11 contains some good updates for device owners (if you forget about the new App Store). For instance, one can now view GIFs from within the Photos app, and other changes will be useful, especially for those with newer devices. But, let’s be honest, the Apple rumor sites are really struggling to make a big deal out of the changes in iOS 11, it just isn’t that big a difference.

I loaded iOS 11 onto my iPad mini 2, which will probably be the last time that device gets a major update (I didn’t want to load it on a device I use every day, at least not right away). I found the iPad no more sluggish than it was on iOS 10, which I suppose is a good thing.

Apple, though, better watch out with these updates. More and more, those with iPhones and iPads are choosing to hang on to their devices longer, and there are good reasons for this. First, Apple has raised the price on the newest models; and second, there is simply not a good reason to upgrade one’s device so frequently, the differences between models is getting smaller and smaller.

As far as speed of the update, this one may have been the fastest so far, so those that usually wait a day or two probably can go ahead and install iOS 11. Also, it is still best to do these updates by plugging your device into your Mac or PC and doing it through iTunes — it solves the issue of having a lack of storage space available on your device.


Author: D.B. Hebbard

Source: talkingnewmedia.com URL: https://goo.gl/28ALj7