Friday, February 2, 2007
Consumer Mags Online: Real Strategy or Band-Aid?
When Emap announced last December that it would shutter the U.S. version of FHM due to a perceived lack of future ad growth, it also said it would retain its Web presence, replacing companion Web site fhmus.com with fhmonline.com. “I think they’re seeing a lot of migration of ad revenue to online markets,” a source close to the company told Folio: at the time. “In this sector, those ad dollars are at a premium and they’re going elsewhere.”The source said the FHM Web site has nearly double the number of users as the magazine does subscribers (1.25 million print subscribers as of June 2006, according to the publisher’s statement with the Audit Bureau of Circulations).More consumer publishers are closing their magazines in favor of Web sites—from the teen category to men’s magazines and possibly newsweeklies next—but just how committed are they to an Internet strategy? According to a 2006 Folio: survey of consumer magazine CEOs, 77 percent of those with revenue under $10 million and 57 percent of those with revenue over $10 million expected new print advertisers to be their fastest growing revenue stream. “We folded a couple new magazines and we’re not embracing technology as fast as we could,” said one executive. While some b-to-b publishers are starting to see online revenue gains exceed print losses, consumer publishers may have a steeper hill to climb.Small Fish in a Big PondPart of the problem is that magazine publishers need to cope with the new experience of being a small fish in a big pond. Sites such as TeenPeople.com and ElleGirl.com post impressive traffic relative to print circulations but lag far behind other sites that cater to their audience, such as MySpace. Sports Illustrated is the dominant print sports brand and SI.com is an extremely successful Web entity, yet it is about the fifth largest sports Web site by traffic.A recent study from The Bivings Report, called “Analyzing the Presence of Magazines on the Internet” (www.bivingsreport.com/2006/the-presence-of-magazines-on-the-Internet/), finds that some of the most popular print magazines continue to lag behind the adoption of cutting-edge features (RSS feeds, RSS feeds that include ads, tags, mobile versions, video, podcasts, reporter blogs, reporter blog comments, blogrolls, comments on articles, registration required, book marking, message boards, and RSS feeds for different sections). Only three magazines—Newsweek, Popular Science and Time—used more than half of the features the study highlighted. The largest magazine according to the study’s definition—Reader’s Digest—possessed only podcasts, message boards and RSS feeds, while 10 of the magazine sites surveyed possessed none of the features. To be fair, the study assumes that all these features are a benefit to the magazines’ audiences—one of the challenges of Web 2.0 is not falling into the trap of doing something just because you can, rather than because it makes business sense.Taking the First StepLast April, Hachette Filipacchi shuttered ElleGirl in favor of ElleGirl.com. In December, the publisher folded French import Shock but plans to bolster the U.S. edition of the Web site. ElleGirl.com has enjoyed a 300 percent increase in traffic with very limited marketing and is setting the tone for the rest of the publisher’s online products. “What’s happened with ElleGirl.com has made us very confident about our brands having life beyond the magazine,” says vice president of digital media Marta Wohrle.The French version of Shock is undergoing its own repositioning by shifting to weekly and becoming more news-focused, and that could influence the U.S. Web site. “We’ll have to see whether that strategy will pan out,” says Wohrle. “In the next couple of months we’ll decide on what that strategy will be—do we do something like the French version or something more unique for American audiences?”As Hachette moves to a ratio where its Web sites feature 80 percent unique online content and 20 percent print content, ElleGirl.com is starting to influence some of the more mature brands as well. In the next few months, Hachette Filipacchi will redesign the Woman’s Day site (womansday.com) with blogs written by the magazine’s “name brand” writers as the centerpiece of the home page. “A year ago, if I had suggested that, the ad department would have walked out,” says Wohrle. “They would have said ‘we can’t sell this’—now they want to sell it.”But they’ll have to adjust their expectations. In 2005, ElleGirl generated $33 million in revenue, according to PIB. “ElleGirl.com will make money this year,” says Wohrle. “When you compare that to how long it takes a magazine to be profitable, especially in the teen market, we’re very happy. We’ve done five-year plans for every brand online and we think we can get 20 percent of our income from online/mobile company-wide. In terms of profitability, the proportions should be much higher, possibly 40 to 60 percent. Overall it’s going to be a smaller business but the margins overall may continue to be much, much higher.”
Video Gaming Industry Adapting to Internet Age
In the future, video games will be shorter in length. They will be easier to comprehend, and they will appeal to a wider audience. They will lack hefty instruction manuals and lengthy tutorials. Many will be downloadable. Some will contain advertisements.
These were some of the ideas tossed around Tuesday evening at a panel discussion on the booming video game business at New York University's Stern School.
With broadband Internet becoming more accessible, everyone wanted to talk about the future of digital distribution of video games. Online gaming sites are popular as ever, and all of the new consoles — Microsoft's XBox 360, Sony 's Playstation 3, and the Nintendo Wii — offer their own online marketplaces for downloading smaller games. The panelists, who included the Vice President of Business Development for Atari, Robert Stevenson, and an interactive entertainment analyst for Bear Stearns, Edward Urban, each had their own strategies and reasons for tapping in to the online market.
"It's kind of a tricky thing for publishers, because your bread and butter is the retail business," Mr. Stevenson said. "So you want to do the digital distribution, but you don't want to bypass or avoid Wal-Mart and Best Buy because it's still a valid business." Mr. Stevenson pointed out that online sales of the game Neverwinter Nights made up 5% of total sales. Although Atari was pleased with that figure, it obviously didn't compare to sales in stores. Still, Mr. Stevenson suggested that the online would strengthen over time.
The chief executive officer of the online game company Kuma Reality Games, Keith Halper, said digital distribution is more analogous to television than to Wal-Mart. His company offers free games over the Internet, distributed in small bursts, or "episodes," and forces players to watch advertisements. "As a startup, you don't want to find yourself competing against the likes of Atari or Vivendi," he said, adding that smaller companies need to find less traditional business models.
The vice president of Sierra Online Latin America, Esteban Sosnik, said there would be a change in the way video games are made as the Internet's role increases. He said that his company's awardwinning game, Assault Heroes, wouldn't have been possible without Live Arcade, Xbox 360's downloadable game service. He also implied that micro-transactions — the purchase of add-ons or upgrades through the Internet — would become more prominent.
Panelists agreed that shorterlength video games would be popular with consumers.
"I think it's happening because of a change in demographics," the coordinator of the New York City chapter of the International Game Developers Association, which helped organize the panel, Wade Tinney, said after the discussion. There are still kids who can play for hours on end, he said, but there are also older people, like himself, who grew up on games and don't have that kind of time anymore. "And I'm the one with the credit card and the income," he said.
"I personally don't think our players have any interest in the 40-hour experience," he said.
Mr. Halper found that his customers, many of whom are new to gaming, were unsatisfied with the company's longer offerings and preferred games to last an hour or less. "There's something about the mass market coming in that makes a difference in the kind of games you create," he said.
After the panel, Mr. Stevenson said that his business model isn't going to change much, but that the games Atari distributes probably will. In his words, video games in the future will simply be more "digestible."
The New York Sun
These were some of the ideas tossed around Tuesday evening at a panel discussion on the booming video game business at New York University's Stern School.
With broadband Internet becoming more accessible, everyone wanted to talk about the future of digital distribution of video games. Online gaming sites are popular as ever, and all of the new consoles — Microsoft's XBox 360, Sony 's Playstation 3, and the Nintendo Wii — offer their own online marketplaces for downloading smaller games. The panelists, who included the Vice President of Business Development for Atari, Robert Stevenson, and an interactive entertainment analyst for Bear Stearns, Edward Urban, each had their own strategies and reasons for tapping in to the online market.
"It's kind of a tricky thing for publishers, because your bread and butter is the retail business," Mr. Stevenson said. "So you want to do the digital distribution, but you don't want to bypass or avoid Wal-Mart and Best Buy because it's still a valid business." Mr. Stevenson pointed out that online sales of the game Neverwinter Nights made up 5% of total sales. Although Atari was pleased with that figure, it obviously didn't compare to sales in stores. Still, Mr. Stevenson suggested that the online would strengthen over time.
The chief executive officer of the online game company Kuma Reality Games, Keith Halper, said digital distribution is more analogous to television than to Wal-Mart. His company offers free games over the Internet, distributed in small bursts, or "episodes," and forces players to watch advertisements. "As a startup, you don't want to find yourself competing against the likes of Atari or Vivendi," he said, adding that smaller companies need to find less traditional business models.
The vice president of Sierra Online Latin America, Esteban Sosnik, said there would be a change in the way video games are made as the Internet's role increases. He said that his company's awardwinning game, Assault Heroes, wouldn't have been possible without Live Arcade, Xbox 360's downloadable game service. He also implied that micro-transactions — the purchase of add-ons or upgrades through the Internet — would become more prominent.
Panelists agreed that shorterlength video games would be popular with consumers.
"I think it's happening because of a change in demographics," the coordinator of the New York City chapter of the International Game Developers Association, which helped organize the panel, Wade Tinney, said after the discussion. There are still kids who can play for hours on end, he said, but there are also older people, like himself, who grew up on games and don't have that kind of time anymore. "And I'm the one with the credit card and the income," he said.
"I personally don't think our players have any interest in the 40-hour experience," he said.
Mr. Halper found that his customers, many of whom are new to gaming, were unsatisfied with the company's longer offerings and preferred games to last an hour or less. "There's something about the mass market coming in that makes a difference in the kind of games you create," he said.
After the panel, Mr. Stevenson said that his business model isn't going to change much, but that the games Atari distributes probably will. In his words, video games in the future will simply be more "digestible."
The New York Sun
Disney sells 1.3m films on iTunes
Downloads of Walt Disney films on the iTunes platform have risen sharply to more than 1.3m after only three months on sale, putting pressure on other Hollywood studios to join Apple’s digital service.
Disney began selling its new movies on iTunes in October. But other studios have resisted its lead, partly because of fears that they will upset retailers such as Wal-Mart and Target, which are responsible for most DVD sales in the US.
Target has expressed concerns about the effect of downloading on DVD sales and pricing. But in an exclusive video interview on FT.com, Bob Iger, Disney’s chief executive, said digital distribution was “creating more consumption of media”. He added: “The message that we deliver to our traditional [retail] partners is that the pie is getting bigger.”
Video
Bob Iger talks to US Managing Editor Chrystia Freeland in an exclusive video interview
He dismissed fears that digital downloads would cannibalise DVD sales, pointing to record sales of Cars, a Disney animated movie, and of Pirates of the Caribbean: Dead Man’s Chest, which is on course to be the biggest selling DVD ever.
Mr Iger said retailers’ concerns were to be expected but Disney had to sell content on digital channels. “If we don’t put our content on these platforms, which the consumer has obviously embraced, other entities will create content and fill that void.”
The launch of Pirates of the Caribbean and Cars on iTunes helped push Disney download sales through the 1m barrier, with the total number of Disney downloads sold on iTunes doubling over the Christmas period.
Disney also put its TV programming on iTunes a year ago and has sold more than 20m downloads.
The company’s buoyant DVD sales come as the media industry braces itself for a DVD slowdown. After several years of growth, the market is maturing.
Pali Capital, a research firm, expects 2007 to be the first year that spending on DVDs in the US declines.
ft.com
Disney began selling its new movies on iTunes in October. But other studios have resisted its lead, partly because of fears that they will upset retailers such as Wal-Mart and Target, which are responsible for most DVD sales in the US.
Target has expressed concerns about the effect of downloading on DVD sales and pricing. But in an exclusive video interview on FT.com, Bob Iger, Disney’s chief executive, said digital distribution was “creating more consumption of media”. He added: “The message that we deliver to our traditional [retail] partners is that the pie is getting bigger.”
Video
Bob Iger talks to US Managing Editor Chrystia Freeland in an exclusive video interview
He dismissed fears that digital downloads would cannibalise DVD sales, pointing to record sales of Cars, a Disney animated movie, and of Pirates of the Caribbean: Dead Man’s Chest, which is on course to be the biggest selling DVD ever.
Mr Iger said retailers’ concerns were to be expected but Disney had to sell content on digital channels. “If we don’t put our content on these platforms, which the consumer has obviously embraced, other entities will create content and fill that void.”
The launch of Pirates of the Caribbean and Cars on iTunes helped push Disney download sales through the 1m barrier, with the total number of Disney downloads sold on iTunes doubling over the Christmas period.
Disney also put its TV programming on iTunes a year ago and has sold more than 20m downloads.
The company’s buoyant DVD sales come as the media industry braces itself for a DVD slowdown. After several years of growth, the market is maturing.
Pali Capital, a research firm, expects 2007 to be the first year that spending on DVDs in the US declines.
ft.com
Subscribe to:
Posts (Atom)
