Sunday, May 17, 2009
Posted by John Donovan at 5:46 AM
Sunday, May 3, 2009
The New York Times ran an obituary this morning for Encarta, Microsoft’s erstwhile multimedia encyclopedia. Since its introduction in 1993 for $395, Encarta was subsequently marked down to $99, $29.95 and most recently $22.95. Microsoft will soon cease selling and shut down its web site.
Yes, Encarta was done in by Wikipedia, but even more so by Google. As the Times observed, “Microsoft soon learned that the public would no longer pay for information once it was available free.”
During Encarta’s slow demise, Microsoft was started counting less on sales receipts and more on embedded advertising. You could read carefully researched articles but you had to endure vendor product pitches. Sound like your typical magazine or newspaper? They also rely heavily on ad revenues, since readers are increasingly disinclined to pay for subscriptions.
But a parallel logic, unfortunately, also applies to advertisers. Why pay a fortune for expensive print advertising when you can reach more people more cheaply with online ads? OK, you have a problem with metrics, but here you have a potentially interactive medium that can generate sales leads, something that’s hard to match in print. And it’s cheap.
That logic is killing print, both newspapers and trade magazines. Quite frankly, I don’t see a way around it. The problem then becomes, how do you make money online, where you’re essentially trading print advertising dollars for dimes? This is the $64,000 question that’s consuming everyone in the publishing industry. I don’t claim to have the answer, but I do have a provocative suggestion.
I think vendor-based magazines—whether print or online—are the future of trade publications.
The publishers who put out the trade mags you read have long made a bundle on “specialty publications,” or magazines they produce on contract for individual vendors. Their editors frequently contribute articles focusing on the vendor’s technology or even products, walking a fine line between editorial integrity and pushing marketing bullet points. The editors are never comfortable doing this, but it puts food on the table.
I think this is a growing trend, and an increasingly honorable one. Mentor Graphics puts out EDA Tech Journal, which is well read and well balanced—with kudos both to Mentor and my old colleague Paul Dempsey. Mike Santarini, since being laid off at EDN, has started publishing Xcell Journal for Xilinx—a very slick magazine. And Rich Goering didn’t stay unemployed long before being snatched up by Cadence to start an e-newsletter for them, which I’m sure will retain the same high standard for which Rich has always been known.
I hate to say it, but I think Rich Goering and Mike Santarini are the future of publishing, which will be vendor driven. The online world is full of new sources, very few of which are making money. Yes, a lot of them are dreck, but that's how it works. That also means that there's room for trusted gurus, if they can just figure out how to make a living.
I see a wide range of online tech news sources, with a smattering of guru blogs that people trust. The blogs will be well supported by advertising, but not enough to support the overhead of a big publisher. All the major semiconductor and EDA companies will have their own online magazines, employing the best editors.
Journalism will slide farther down the slippery slope toward marketing, with the best editors—with the blessing of the more enlightened vendors like Mentor—still having a lot of latitude to express their occasionally acerbic opinions.
They’ll just be working within a smaller box.
Posted by John Donovan at 12:39 PM
Friday, May 1, 2009
Well, all this talk about how print is hurting suddenly became more personal yesterday when the plug finally got pulled on Portable Design. That ends a 12-year run for the magazine, including four with me at the helm. I'm now, as they say, "looking to pursue other opportunities."
If a rising tide lifts all boats, an ebb tide can leave them high and dry--especially small boats like PD. With even big publishers like "The Company Formerly Known As CMP" downsizing their print books (read: laying off my friends), there's a limit to how long smaller outfits like the RTC Group can hang in there in a down market. Between a huge increase in competition in our space over the years; a strong move from print to online, with a corresponding sharp drop in ad revenues; and the current recession, it was time to pack it in. I give RTC a lot of credit for hanging in there with me and PD, but this was the right thing to do.
I don't have any plans at the moment, though starting online magazines or e-newsletters for clients is an interesting idea, as is doing some more in-depth research than is possible under deadline pressure. If you have any bright ideas, feel free to let me know. You can reach me at firstname.lastname@example.org. I'll keep the blog going, so posts here are also welcome.
UPDATE (5/4): I didn't at all mean to imply above that the RTC Group will have trouble "hanging in there"--I was referring to there being a limit to how long they could "hang in there" losing money on PD. To reiterate: I agree with John R's decision to pull the plug on PD, sad as that was. The RTC Group as a company is doing quite well despite the downturn, not the least for making intelligent, if difficult management decisions. -- JD
Posted by John Donovan at 12:36 PM