The Big Picture – December 2012

A turbulent year ends in uncertainty.

A turbulent year ends with great uncertainty about what lies ahead in the New Year as all the key indicators continue to wobble.  Yet there are still some recurring themes running through the activities this month…..

Consolidation is clearly seen in the launch of Local World and the merger of Random House and Penguin.  Scale is clearly one way to face up to the challenges of the digital world, but not the only one; and size alone does not guarantee success as the spectacular failure of the all-digital The Daily demonstrates.

Bolting down what is stable and understood rather than taking unnecessary risks – that seems to be very much the thinking behind Marketforce’s long-term commitment to the current wholesale players in its recent contract negotiations.  For publishers, there are simply too many digital plates to keep spinning to be taking unnecessary risks with a supply chain which is far from perfect, but which works passably well, even though it still needs ongoing tweaks to squeeze more economies as retail sales continue to slide.

Yet change is evident at every turn elsewhere….the impact of digital in every aspect of everyone’s business; rapidly shifting market shares; the imperative to think more internationally and reducing lifecycles, with the death of the print versions of The Dandy and Newsweek being high profile examples of the need to stay relevant as consumer tastes and practices change.

At the core of the “New Austerity” lies the issue of price, for publishers through to retailers.  As the YouGov research on magazine consumption demonstrates, it is the cost of magazines more than anything else which is hitting print sales rather than digital competition.  There is also the massive issue of getting the pricing architecture right in balancing print against digital and single copies against subscriptions.  The pricing decisions made in 2013 will have to be lived with forever after.

With so many things to juggle at the same time, there is a real need to focus.  HIM warn that the retail multiples’ enthusiasm for convenience and Click & Collect has led to a lack of focus on small supermarkets and CTNs, even though they remain valid and robust channels.  Maintaining focus is a real issue for everyone in 2013.

“Positive disruption” is an expression being used by Asda a lot at the moment.  What they mean is the need to interrupt the settled shopping patterns of their consumers in order to drive up their basket size: whether that is through better in-store displays or interactive smartphone apps.  Simply getting in the face of the consumer more.

With so much digital static, getting in readers’ faces must be a real aim and challenge for the coming year.

A Merry Christmas and a happy and prosperous (if slightly austere!) New Year.