The Big Picture: July 2012

It is a tough and hectic time at the moment.

The publishing news is a whirlpool of acquisitions, launches, redundancies and sliding profits.  It is not all bad news – the first-half magazine launch activity shows some real creativity – but there is still plenty of bad news with the poor magazine retail sales trends for Q1 at the top of the list.  The pressures are also forcing regional newspapers into radical tweaks to their models.  And constantly flexing the financial variables is the order of the day for everyone.

Flick over to retail and there is massive change here too.  While the WHSmith story remains reassuringly yet bewilderingly consistent (profits up, sales down), the major retailers are moving focus away from “big box” and into convenience; away from the “race-for-space” and into store refits in order to improve the shopping experience.  And they too are going increasingly digital.  Just when you think that Tesco might be focusing simply on clawing back its market leading authority in bricks & mortar retailing, having lost its way in 2011, it goes and buys We7.  This may turn out to be one of the most significant moves that the grocer has made in growing its digital entertainment offer. It will bring it increasingly into competition with Apple and Amazon, with some knock-on implications for newspaper and magazine publishers.

Move on to digital itself.  Talk of “competition” links into Microsoft’s own tablet launch, the Surface, which brings it into conflict with its established hardware partners.  Mention of “Amazon” leads on to Waterstones’ who have decided to partner with the “devil” rather than compete head-on: they have started to sell Amazon’s Kindle in-store.  Partnering and competing at the same time with the same people is an unexpected feature of the new multi-channel model.  And as more and more consumer research is showing, “multi-channel” means what it says.  Consumers are not deserting print for digital, but want both together, at least for the foreseeable future.  As the US Retail Marketplace conference was repeatedly reminded, we all need to practice more “interruption marketing”, forcing our products into consumers’ increasingly crowded lives rather than sitting back and letting them search us out.

Then on to the middlemen.  While the media whirlpool swirls, the countdown to the wholesaler contracts has started.  Making the old print supply chain more efficient without making it crash is one of the biggest challenges of the next two years.  It is also more important financially than agonising how to get an app for the Surface out to market.

The “Big Picture” is an overview of the publishing business contained in the lastest issue of “Wessenden Briefing”. For a sample issue of the newsletter, click on the button on the right of this page.