The Big Picture: Feb 2011

The Big Picture — By on 05/02/2011 10:00 pm

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.

It is a very wobbly start to an uncertain year… As the key indicators show, levels of consumer and business confidence look very fragile and sales trends are peaking and troughing with little pattern.

The detailed analysis of 2010 launches (page 11) shows that there is more life coming back into the magazine business, but that this is not yet feeding through into consistent growth. In addition, the market looks to have gone through a major structural change where the really big, mainstream launches have become few and far between in a welter of specialist products, brand extensions and retailer exclusives.

Circulation is not going to be as buoyant as advertising in 2011 and the whole digital route to market is throwing up more questions than answers at the moment. The pricing of digital editions (page 15) is currently being set now, slightly on the hoof, in a very young and immature market. Yet the decisions that the industry makes now will have to be lived with forever after, however good or bad they may be.

An important issue in the retail news centres on the differing fortunes of WHSmith and HMV retail chains. Both are beleaguered, legacy retailers managing difficult positions in the broad entertainment sector. HMV has won lots of plaudits for its bold attempts to reshape itself radically while WHS has been constantly criticised for focussing ruthlessly on the bottom line at the apparent expense of any creativity in strategic direction or boosting topline sales. Yet HMV now looks to be on the verge of collapse or acquisition while WHS has been cannily buying itself the time to change its product mix in a controlled way and to develop new travel formats. It has also just snapped up 22 new stores.

There are some obvious parallels with publishers at the moment. Many are reshaping their operations very quickly for a digital future, like an HMV. Others are focusing on trying to make what currently works work better, like a WHS; buying themselves the time to see what the shape of digital is really going to look like before committing to it. “Doing a WHS” looks (and is!) boring, but is it a more sensible option than “doing an HMV”?…..or even “doing a Spotify” (page 9) which has hit a real consumer demand with a first class service, but which still loses significant amounts of money.

And then along comes Rupert Murdoch again with The Daily. It cost $30m to launch, $500,000 a week to keep it going, but will it make any money?

Read all about it in the latest “Wessenden Briefing”. Subscribe to “Wessenden Briefing

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