Happy New Year 2020: Review of Popular Posts

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HAPPY HOLIDAYS - ALL THE BEST FOR 2020 View this email in your browser Looking forward to new and exciting challenges for 2020 A selection of articles from this year which generated a lot of traffic. During 2019, I completed business strategy projects for two education publishers, due diligence support for several acquisitions and market research for two associations.  Please reach out to discuss your projects or you have a C-Level search or board role I can help support.  - Michael Cairns Don't Subscribe to The Member Fallacy 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.   Five Strategic HigherEd Trends Perhaps the only surprise in the fact that major changes and dislocations are taking place in educational publishing is that they took so long to exhibit themselves.  The more recent change is the aggressive growth of all-access textbook deals sold to students – frequently via the institution – which provide students access to the entire content catalog published by a textbook publisher.   Cengage put the wind up most educational publishers two years ago when they launched their program, which they now claim has been sold to more than one million students.   Cengage announced this week that they have extended their “all you can eat” digital subscription package to the Amazon.com store.   Since the company launched this subscription model, students have been able to gain digital access to everything the company publishes, all for $119.99 a semester and $179.99 for the full year.   Get Caught Learning   The approach to education in prisons is improving and expanding Pell Grant eligibility will accelerate change but industry groups should do more.  Ask any prison-enlightened pol what metric is most important in determining the success or failure of incarceration and they are most likely to cite recidivism – how many released prisoners return to the system. It’s also the one they would most like to improve. America has one of the largest incarceration rates in the world (IHEP) and also one of the worst recidivism rates. More focused on warehousing inmates than on rehabilitation, the US prison system still takes no collective responsibility for a revolving door system which keeps hosting the same participants like a warped frequent-flyer program. Blockchain for Publishers: Last year I pulled together a post discussing how I thought blockchain could (and was) be used within the publishing industry.  (Publishing in the Age of Blockchain).   There is definitely still excitement about blockchain but my impression is less about the hype and more about actually doing stuff that works. I said last year the use of blockchain with the identification and management of intellectual works looks like a very viable business case.   After my post last year, I was approached by several organizations in the news and image management area seeking more discussion about how some of these initiatives could help support their business objectives. This  report identifies over 100 software and services providers and reviews in detail more than 30 providers serving publishers of all types and sizes. In this report, we list the leading providers of financial & accounting, rights, contracts and royalties, product information, editorial and production management and content management solutions. 2019 was also a milestone of sorts: A Stab in the Dark - A New York Story Copyright © 2018 Information Media Partners, All rights reserved. Our mailing address is: IMP Towers, 101 River Street, Hoboken Want to change how you receive these emails? You can update your preferences or unsubscribe from this list.

Federally Funded Research to be Set Free?

There are few things the Trump administration has in common with the Obama Administration but trump appears on the cusp of yet another executive order which will make all federally funded (tax payer) research immediately available. Generally, the Obama Administration established a set of  initiatives to open access to government information and one of the related policies underwritten by the Office of Science and Technology (OSTP) was to make tax payer funded research more available.  In 2013, OSTP released a policy memorandum which "directed Federal agencies with more than $100M in R&D expenditures to develop plans to make the published results of federally funded research freely available to the public within one year of publication and requiring researchers to better account for and manage the digital data resulting from federally funded scientific research."  At the time, the year embargo represented a compromise agreed between publishers and the government via a 'deliberative' process.

The current administration (which had initially appeared to discard and abandon many of the open government initiatives implementated under Obama), has circulated an executive order (EO) which will effectively eliminate the one year embargo period.   Naturally, publishers including associations and membership organizations which rely on publishing revenue to support their operations are intensively concerned about this initiative. Oddly, while some reports suggest this EO has been circulating for a while, the Association of American Publishers (AAP) are only formally responding now with their concerns.   If this order is made, it will likely fundamentally change they way many academic and scientific publishing companies operate especially those publishing programs which operate where the preponderance of research money is spent.  Some more forward thinking publishers, having seen the trends in Europe with respect to open access, may be protected but there are many publishers for which this is going to represent a real danger to their financial viability.  Or at the least, they are going to have to withstand a difficult transition period to a new open access model.

The AAP's response has been very direct and represents the views of more than 125 publishers:

“The American publishing industry invests billions of dollars financing, organizing, and executing the world’s leading peer-review process in order to ensure the quality, reliability, and integrity of the scientific record,” said Maria A. Pallante, President & CEO of the Association of American Publishers. “The result is a public-private partnership that advances America’s position as the global leader in research, innovation, and scientific discovery. If the proposed policy goes into effect, not only would it wipe out a significant sector of our economy, it would also cost the federal government billions of dollars, undermine our nation’s scientific research and innovation, and significantly weaken America’s trade position. Nationalizing this essential function—that our private, non-profit scientific societies and commercial publishers do exceedingly well—is a costly, ill-advised path.”

The letter notes that “publishers both support and enable ‘open access’ business models and ‘open data’ as important options within a larger framework that assumes critical publisher investments remain viable. Under a legacy regulation that is still in force today, proprietary journal articles that report on federally funded research must be made available for free within 12 months of publication. This mandate already amounts to a significant government intervention in the private market. Going below the current 12 month ‘embargo’ would make it very difficult for most American publishers to invest in publishing these articles. As a consequence, it would place increased financial responsibility on the government through diverted federal research grant funds or additional monies to underwrite the important value added by publishing. In the coming years, this cost shift would place billions of dollars of new and additional burden on taxpayers.”

As with many initiatives with this administration, motivations may not be as pure as to provide more access to science and information; rather some have suggested that this action is a massive favor to private industry.   It is difficult to believe that Trump has any knowledge or awareness of the nuances of research publishing, business models or purpose.  It would be illuminating to know who is influencing this significant policy change.

Sacha Baron Cohen's Keynote Address at ADL's 2019 Never Is Now Summit on Anti-Semitism and Hate

MediaWeek Report (Vol 12, No 1): Flipboard Magazine - America's Test Kitchen, NYPL & Instagram, Textbooks, Blockchain in Publishing

Check out more interesting articles from my flipboard magazine for publishing and media.

Here is an excerpt from one of the articles I've clipped about America's Test Kitchen (Digiday):

“America’s Test Kitchen made a strategic decision 20 years ago, and I think that that was atypical at the time but prescient because they built a stable business, not one that is dependent on episodic ad revenue,” said Peter Doucette, a managing director in the Telecom, Media & Technology practice at FTI Consulting.

America’s Test Kitchen’s subscriptions business, which currently has 1.3 million paid print subscribers between its Cook’s Illustrated and Cook’s Country magazines and 420,000 paid digital subscribers, makes up 60% of the company’s overall revenue, and CEO David Nussbaum said this area is experiencing double-digit growth year over year. That’s why on Jan. 2, Nussbaum said the company has a pretty good idea what the revenue will be that year, based on how many subscriptions they have. Recurring revenue is a helluva drug.

See more at Personanondata - The Magazine

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. 

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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:

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

PND: Get Caught Learning

PND: Exclusive Access Comes to Campus

PND: Questioning my Education

PND: The New McGraw-Hill: Where is Education Textbook Publishing Headed?