Thursday, July 08, 2021

Please, Won't You Be My Member?

Content owners are fascinated with memberships. Faced with eroding subscription revenue, many legacy publishers plan membership programs in a well-intentioned attempt to turn around their revenue declines, but do no more than confuse their core customers. “Membership” programs - offering more frequent content such as topic-specific newsletters, earlier access to the magazine, database content and a branded mug are nothing more than a tiered subscription offer. But when memberships are differentiated from subscriptions, they offer “members” reciprocity in the purpose and function of the publication and deeper engagement for the mutual benefit of both the member and the publication.

After conducting some market research for an enthusiast publisher recently, I found that an important component of their subscriber base was the large number of long-time subscribers who kept physical copies of the title going back many years. While these subscribers exhibited a propensity for deep engagement with the content, packaging a ‘membership’ program to sell them more stuff was not going to result in more engaged and connected partners. Past management teams had attempted to leverage this ‘loyalty’ to create a vendor “marketplace” which only exacerbated the company’s financial problems as subscriber numbers continued to decline and no one bought the knick knacks.

Subscriptions represent a financial transaction; well-designed membership programs facilitate a two-way conversation between the publication and its members to produce something unique – such as fresh content, new products, ideas and engagement. What makes a membership program different is that it may not have a well-defined objective whereas a subscription is always defined by its payment status and is, by nature, a short-term proposition – renewals notwithstanding. Once membership conversations start, they should yield a wealth of new ideas and initiatives, bringing a vitality to the business that may not have existed before. And that can help split new content and business models. But it is the openness of the members give and take which is the primary objective, not revenue growth per se.

Building effective subscription plans and models is not straightforward - it requires careful planning and a lot of experimentation. Without that, subscription programs become stale and routine particularly when supporting a predominately print-based audience. The development of a membership program will be more complex, multi-dimensional and evolutionary, and will require new staff capabilities, experience and thinking. But base subscription programs should not be ignored and should work in tandem with the new membership program.

Below I’ve framed some ideas for expanding your existing subscription program and building a new membership program:

Subscription Program
Membership Benefit
Purpose is to raise average subscription revenue per subscriber. The following benefits could be an up-sell to the existing subscription or new (higher) tier
Build a two-way connection between the magazine and members that results in deeper engagement and mutual benefits
·   Early digital access to the print publication
·   Free digital subscriptions
·   Archive and legacy content access – via website
·   Discounted gift subscription rates
·   Early and preferential access to webinars and events
·   Multi-year subscription options and, if available, cross-sell subscriptions with other magazines
·   Advertiser and partner discounts
·   Don’t promise to engage but then fail to do so. Build a program of active engagement first before launching the program
·   Invite existing subscribers into the organization to help plan the membership program
·   Build exclusivity with limited member invites to events each year
·   Launch a “badging” for members to use via interaction with the community – suggests exclusivity
·   Establish dedicated staff and special member events designed for close interaction and exchange
·   Consider topic-based focus groups: Potentially live and broadcast to members
·   Allow members to report on events such as conferences and shows for publication
·   Enable members to build interest groups around specific topic and subject areas

One of the biggest objectives the publisher may seek through the development of a membership program is to improve the positioning and viability of the magazine thereby improving long-term financial success. That’s not immodest if the membership program is designed to truly engage key constituents in a conversation. A more engaged member will help guide the publication and this will, in turn, help maintain and even expand your core subscription base. With this objective, the publisher may decide to charge only a modest fee for the membership program.

The high level and directional ideas above will help you differentiate between subscription models and memberships programs - each represents different value propositions to the organization. Confusing the two will confound your subscribers and infuriate your more loyal customers. A membership program can be a powerful strategic tactic leading to a range of new ideas and option ...   just don’t forget to diligently maintain your subscriber base. 
 
(Article originally published Nov, 2019)


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Michael Cairns is a publishing and media executive with over 25 years experience in business strategy, operations and technology implementation.  He has served on several boards and advisory groups including the Association of American Publishers, Book Industry Study Group and the International ISBN organization.   Additionally, he has public and private company board experience.   He can be reached at michael.cairns@infomediapartners.com

Read more articles on my Flipboard magazine:

Monday, June 28, 2021

Media Week (Vol 14, No 6) Using Fiction to Forecast, TikTok Book Clubs, Journal Quality Improves, Either the Flag Goes?

 ‘At first I thought, this is crazy’: the real-life plan to use novels to predict the next war (Guardian)

His favorite example of literature’s ability to identify a social mood and cast it into the future is a retelling of the Cassandra myth by the East German novelist Christa Wolf. Kassandra, published in 1983, casts Troy as a state not unlike the late-stage German Democratic Republic, succumbing to the paranoia of a Stasi-like secret police as it veers towards a not-so-cold war. Kassandra, cursed with the gift of prophecy, is also a cipher for the author’s own predicament: she foresees the decline her society is heading for, but her warnings are ignored by the military patriarchy.

If states could learn to read novels as a kind of literary seismograph, Wertheimer argues, they could perhaps identify which conflicts are on the verge of exploding into violence, and intervene to save maybe millions of lives.
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All this raw information is fed into Watson, IBM’s artificial intelligence platform, which helps convert it into maps highlighting potential trouble spots: green indicates stability, orange highlights instability, red warns of a conflict on the verge of escalation. One German official says the AI prediction system had already given Angela Merkel’s government a few months’ warning of the rebel insurgency in Mozambique’s northern Cabo Delgado province, where security forces are battling with militants trying to set up an Islamic state. But the early warning system is still in development: the aim is to eventually be able to predict conflicts 12-18 months in advance.

The rise of BookTok: meet the teen influencers pushing books up the charts (Guardian)

These posts can attract millions of views, and rekindle an appreciation of books in young readers. “I started reading again after six years when I came across BookTok for the first time last October,” says Mireille Lee, 15, who, with her 13-year-old sister Elodie, now runs the high-profile @alifeofliterature account on TikTok.

....

Publishers are watching with interest. “The pool of people who are guaranteed to buy young adult books is limited to a few thousand dedicated lovers of the genre, but BookTok is exciting, with its short, entertaining videos bringing a new, powerful opportunity to reach and engage non-readers, to create more book lovers,” says Kat McKenna, a marketing and brand consultant specialising in children’s and young adult books. “These ‘snapshot’ visual trailers are making books cinematic in a way that publishers have been trying to do with marketing book trailers for a really long time. But the way TikTok users are creating imagery inspired by what they are reading is so simple, and so clever. It’s that thing of bringing the pages to life, showing what you get from a book beyond words.”

Quality shines when scientists use publishing tactic known as registered reports, study finds (Science)

The trio of journals thought registered reports offered a better way. The approach turns the normal publishing timeline on its head: Authors write manuscripts laying out only their hypotheses, research methods, and analysis plans, and referees decide whether to accept them before anyone knows the study’s results. The innovation is that this guarantees publication for even the most mundane findings. Unlike standard papers, “the decision [to publish] … is based on the importance of the question, and the quality of the methodology you’re applying,” says Brian Nosek, a psychologist at the University of Virginia and an advocate of registered reports.

But until recently, concrete data to support the benefits of this publishing model have been thin. Today, Nosek and his colleagues published a paper in Nature Human Behaviour reporting that reviewers rate registered reports as more rigorous, and their methods as higher in quality, than similar papers published in the standard format. And despite concerns that the approach could stifle research creativity, the reviewers considered registered reports to be as creative and novel as the comparison papers. The findings join the first small wave of studies exploring whether the publishing format—now offered by at least 295 journals—lives up to its promise.

IDG Acquired by Blackstone in $1.3B Deal (Techcrunch)

With IDG, Blackstone gets tech analyst firm IDC along with a collection of tech publications that includes CIO, Computerworld, InfoWorld, Macworld, Network World, PCWorld and Tech Hive. The media publishing arm was once a powerhouse in the 1990s tech publishing world, although its shine has faded in recent years as the publishing industry in general has come under intense pressure.

The company has also been making some additions to the platform more recently with a stronger focus on data and analytics. Last year it bought Triblio, a marketing data platform to help companies deliver more personalized customer experiences. Last month it acquired Metri, an IT pricing service, which can help with IT budgeting and procurement. The latter could dovetail nicely with IDC’s consulting services.

Axel Springer: Mathias Doepfner tells pro-Palestinian staff to quit (ME)

Several staff reportedly complained when the company raised an Israeli flag at its Berlin headquarters during 11 days of deadly violence between the Israeli army and the Palestinian Hamas movement in May, which killed 248 Palestinians, including 66 children, in the besieged Gaza Strip and 13 people in Israel, including two children.

According to a report from Israel Hayom, CEO Mathias Doepfner said in a video call with staff worldwide on Monday: "I think, and I'm being very frank with you, a person who has an issue with an Israeli flag being raised for one week here, after antisemitic demonstrations, should look for a new job.

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See more headlines from past MediaWeek posts - going back to 2006.


Tuesday, June 15, 2021

Mediaweek (Vol 14, No 5): B&N and Paper Source, Modern Econ, Wiley Annual Report, McGraw Hill Sells +More

econtopia.gr
Efforts to modernize the teaching of economics (The Economist- subscription)

Students say that inequality is the most pressing economic problem of the day, according to a paper by Samuel Bowles of the Santa Fe Institute and Wendy Carlin of University College, London. But in many textbooks, they argue, the topic is merely appended to the core curriculum. In 1993 a study found race and gender bias in introductory textbooks.

McGraw Hill in $4.5B Deal (Reuters)

Platinum Equity would acquire textbook publishing and educational technology company McGraw Hill for $4.5 billion from Apollo Global Management Inc (APO.N), the companies said on Tuesday.

Founded in 1888, New York-based McGraw Hill generates over $1 billion in annual revenue from its digital products, which include learning tools and platforms for schools and colleges, the companies said in a joint statement.

Since Apollo acquired McGraw Hill in 2013, the company has grown its digital portfolio from less than a quarter of its total revenue to over 60% now, the companies said. It completed six digital-focused takeovers during this time.

The Training is Coming from Inside the CMS (NYTimes)

The work was exhaustive and time intensive. And, because the team spent so much time training reporters and editors on how to use Oak, that left less time to train them to master different story formats, move swiftly during breaking news, make stories more visual and other skills needed in the new tool.

To help make Oak training more efficient, the N.D.S. and Oak teams launched a project aimed at building guidance — such as tooltips, helper text and best practices — directly into Oak. The goal: Give reporters and editors the help they need, in the places where they work, at the moments they need it most.

Barnes & Noble owner to buy Paper Source out of bankruptcy (Trib)

The acquisition will let Paper Source “emerge from Chapter 11 with the support of a well-capitalized owner committed to the development and growth of the business,” Elliott said in a news release Tuesday.

The purchase price was more than $91.5 million, including $40 million in cash and $51.6 million in loans, according to bankruptcy court records.

The Thought Police Come for Individual Lines of Dialogue in Novels (National Review)

Tying an author to the views expressed by fictional characters represents a breathtaking new advance for the cause of asininity in our culture. Hilderbrand’s response should have been to remind all readers that Norman Lear is not Archie Bunker, and her publishing house Little, Brown should have clarified that it does not submit its published books for re-editing by the mob.

Wiley released 4thQ numbers (Wiley)

FISCAL YEAR 2021 SUMMARY

  • GAAP results: Revenue of $1,942 million, Operating Income of $186 million, EPS of $2.63, and Cash Flow from Operations of $360 million
  • Adjusted results (at constant currency): Revenue +4%, EBITDA +16%, and EPS +27%
  • Free Cash Flow of $257 million, up 48% from prior year
  • Digital products and tech-enabled services now at 82% of total revenue, up from 80% a year ago

 Four Myths about Building a Software Business (McKinsey)

The attraction is obvious: the value that leading companies have captured by shifting to digital business models. Moreover, nearly two-thirds of companies expect that the digitization of their core businesses will be (or already is) essential to remaining economically viable. Only about 8 percent of companies believe that their current business models will remain viable if they don’t digitize. But making the shift to digital requires not only upgrading your IT and tech infrastructure, but also transforming your entire business model through creating, or even becoming, a software business (in whole or part), scaling a software offering, or using software as the core of your competitive advantage.

But while getting software into the core of your business model—or launching entirely new software businesses—might seem an obvious play in the current business environment, that doesn’t mean it will be easy. In reality, there are few successful cases of nonsoftware companies building software businesses (Exhibit 2) and many notable failures, including from otherwise high-performing companies. Of the approximately $500 billion in total global software revenues in the year 2019, nonsoftware natives captured only 20 percent. Nontechnology players, for their part, brought in only 6 percent (Exhibit 3).

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See more headlines from past MediaWeek posts - going back to 2006.


Wednesday, June 09, 2021

Clarivate Report Proquest Financials: Raise $1Billion in Equity

On May 17, Clarivate announce a proposed deal to acquire Ann Arbor based Proquest.  (See here).  In the last few days, Clarivate has reported more details including 2020 full year financials for Proquest.

Here is a summary:

  • Assets of $1.3B with $629mm in goodwill
  • $1B in long term debt
  • Revenues of $862mm
  • Operating Income of $84mm
  • Net Income of $3.4mm (Includes unrealized loss of $31mm)
  • Cash provided by operations $199mm
  • Net cash expended on acquisitions of $225mm
  • During 2020, the Company distributed $168.3mm to ProQuest Holdings, primarily related to distributions to shareholders

Management fees of $7mm were fairly modest.

More to be found here.

In addition, Clarivate also reported details on a $1B equity raise which some portion of which will go to fund the acquisition of Proquest.

Monday, June 07, 2021

Some Book Returns are Good: Managing Returns an Upcoming BISG Webinar

Book returns have long been the nemesis of warehouse and fulfillment managers and, sometimes conflict, when challenging the optimism of the sales team. Historically, it was the trade market where returns were (and remain) a significant component of the sales process to the exception of other publishing segments. However, this has changed significantly as the retail market – in education in particular – has become less structured. Whereas students used to purchase textbooks exclusively at the college store they are now as likely to buy their books ahead of time from Amazon for delivery to the dorm as they are to buy them at all.

As most publishing people know, managing returns and addressing the ‘returns problem’ is a perennial issue but it has been up to individual companies to act to improve their returns issues. In the US there has not been a direct industry led initiative to tackle returns but that is not the case in the UK. As far back as 1999, the industry began an initiative to understand the issue, identify the costs of returns and propose a set of progressive supply chain improvements in an industry led attempt to manage down the cost of returns. This initiative brought together all major players including publishers, retailers, wholesalers and other intermediaries, and gained traction approximately five years ago with the agreement on a set of resolutions or ‘rules of the road’ which govern interactions across the industry.

In the US, the UK initiative looks like an interesting model for us to study. The BISG has scheduled a webinar for July 20th to do just that and it is open to members and non-members.  In advance of the meeting, I have been asked to interview a group of supply chain participants (retailers, wholesalers, publishers) on behalf of BISG to determine how they have approached the returns issue(s) within their own businesses, their objectives in addressing returns and solicit their input on how BISG could support the industry to address returns.

At the webinar in July, we will tell the story of the UK experience and deliver the feedback I have gathered from our interviews. We will then solicit feedback from the attendees (and members) as to how BISG might support initiatives to improve the returns issue. So far, I can report that there are some interesting ideas and process improvement suggestions already being used by those addressing this issue and I expect we can discuss these at the meeting in July.  I hope you can join us.  If you would like to offer comments on this issue please do so below.

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Are you considering an investment in new technology?  Check out my report on software and services providers.  (PubTech Report)

Michael Cairns is a business strategy consultant and executive.  He can be reached at michael.cairns@infomediapartners.com or (908) 938 4889 for project work or executive roles.



Tuesday, June 01, 2021

Early Summer Newsletter: Accelerate Out of COVID (Bob Dylan is 80. The sun's not yellow, it's chicken).

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Our World

Over the past year, my colleagues and I have conducted multiple projects including back office technology implementations (Microsoft, NetSuite), due diligence support and a content development strategy. In addition, we conducted more than 25 interviews of publishing software companies to complete research for our annual Publishing Technology research report. You can read how these technologists see the impact of COVID via the link below. If your company is considering a business strategy or technology project, we want to help and are always happy to take a call (908 938 4889) or email to discuss your particular challenge.

Check out the following business articles of interest:
Taking the Temperature - How Publishing Technology Firms View the Future after COVID
 
Thinking about Selling your Publishing Business? Ensure a smooth process using this approach
Adobe Summit: Evangelists for Publishing. Check out the interesting new solutions relevant to publishers Adobe is bringing to market.
Consulting: Profiles of some of our consulting work from APA, WoltersKluwer, Wiley and others
Publishing & Industry News Clips
What if the hybrid office isn't real? - Strategy + Business
An Interactive Visualization of the Stanford Encyclopedia of Philosophy - Open Culture
How subscriptions took over our lives - Vox
A winning operating model for digital strategy - McKinsey
Publishers are using eBooks to extort schools and libraries - The Daily Beast Opinion
Digital skills and the future of work - New Statesman

Amazon Publishing, DPLA Ink Deal to Lend E-books in Libraries - Publishers Weekly
The Start-Up Disrupting University Textbooks - Management Today
Len Deighton Spy Novels - New Spectator
See more at Flipboard
Information Media Partners Consulting
Where we have been spending our consulting time recently...
  • We conducted a needs assessment, requirements gathering and project management for a prominent association publisher undergoing a finance system upgrade
  • For private equity clients, we completed due diligence reviews for several acquisitions. We contributed subject matter expertise, financial modelling and project management
  • Completed more than 25 interviews for our annual Publishing Technology report (see 2020 report) to be published in late summer
You can review more of our project citations by following this link

The coming year will be challenging and you will need help. Please get in touch to discuss a project and/or your long-term management needs.  (michael.cairns@infomediapartners.com)
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See previous newsletters: 

May 2021: Accelerate Out of Covid

February 2021: When New Models Don't Work 

December 2020: The Close of the Year 

Fall 2020: The Election Season: Vote! 

Spring 2020: You Are the Expert! Now Network. 

December 2019: 200 Million Students Await 

September 2019: Publishing News and Updates 

June 2019: Publishing News and Updates 

February 2019: Research Report Software Vendors for Publishing Companies