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The Displacement of PrintThe Impact of Electronic Media on the Paper Industry, 2010-2020

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This report aims to gauge the extent to which print and paper are going to be displaced by some form of electronic media by 2020.


The Displacement of Printrichard romano

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table of contents


Executive Summary The changing Media landscape Drivers and Barriers for Electronic DisplacementEnabling and Disabling TechnologiesImpact on Paper: outlook to 2020 Displacement conclusions

Introduction and MethodologyIntroductionDo not Print objective and Scope Methodology

The Changing Media Landscape Introduction consumer Demographics advertising and Marketing Trends Social Media Mobile Publishing Trends corporate communications

Drivers and Barriers for Electronic Displacement Introduction consumer Technology adoption TrendsPublishing Trends 4Magazines 4newspapers 4catalogs Text to rich Media E-book Developments

Enabling and Disabling Technologies IntroductionEnablers 4Internet 4Search 4Broadband/wiFi 4cloud computing 4rFID Media Enablers 4web Sites 4E-Mail 4Blogs 4rSS 4Podcast 4Social Media 4Video 4Geolocation Electronic Device Enablers 4E-readers and E-books 4Smartphones 4Tablet computers Display Enablers 4Flexible Displays 43D Displays Disablers 4Print on Demand 4Printed Electronics 4Quick response (Qr) 4augmented reality (ar)

Impact on Paper: Outlook to 2020 Introduction Books catalogs Directories Magazines newspapers legal, Financial Manuals and Technical Documents advertising 4Signage 4Direct Mail commercial Printing office Stationery Security Printing Printed Packaging Printed labels conclusions

List of Tables and Figures

3 4 5

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paper > e-book > the displacement of print


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CHAPTER ES 1 2 3 4 5 TOC

Is there any traditional print application around that isnt threatened to be supplanted by an electronic alternative at any minute? Every day, it seems, a story hits the headlines extolling some new application of electronic media. For example, I recently read that an upscale restaurant in the U.S. has begun handing out its wine list on apple iPads. can the full menu be far behind?we often think of paper and printing in terms of obvious applicationsdirect mail, magazines and newspapers, and so on. The predicted electronic displacement of these items has been well documentedand will continue to be throughout this report. But what about smaller, stealth print and paper applications such as the aforementioned wine lists and menus?

Is paper as a medium for conveying content in danger of extinction? and if it does not become extinct, then how endangered might it get? what are the forces at work that make extinction a viable possibility to ponder, and, conversely, what are the forces that could keep print from falling over the brink? where will paper be in the year 2020?

Technology is obviously the major driver in the transition away from paper, though another important influence is peoples changing attitude toward paper itself. In fact, paper is often regarded as an unmitigated environmental evil. In the United States, for example, it is common to see appended to the signature files of e-mail messages the admonishment Please think about the environment before printing this message. and, a 2009 New York Times blog post that asked, are E-readers Greener than Books? cited a study that reported that e-book readers such as the amazon

Kindle have less of an environmental impact than printed books, as if electronic media didnt have a carbon cost. of course printed books require paper, which means that trees do get cut downbut trees are a renewable resource after all. conversely, electronic media run on electricity that is produced, often, from coal and other nonrenewable fossil fuels. and how many first- and second-generation Kindles (and their ilk) are going to end up in landfills in the next few years? and, unlike paper, there is no possibility of these electronic devices biodegrading. Depending on the batteries they contain, the devices may also leach toxins into the groundwater.

So the environmental impact of paper vs. pixels is hardly clear-cut, but it is one of the driving attitudes toward the displacement of print and paper.

This report, then, aimsin a hybrid quantitative/qualitative wayto gauge the extent to which print and paper are going to be displaced by some form of electronic media by 2020. There are, however, two ways that this displacement is occurring: The first is by direct replacement of content by that same content in a different form, such as a printed book being replaced by an electronic version. The second is by media consumers shifting their interest from one medium to another, such as preferring to watch television rather than read a book, or surf the Internet rather than leaf through magazines. Both forces are at work, but the second has been at work for generations.

So many completely unforeseen changes have occurred within

Executive Summary

Is there any traditional print

application around that isnt

threatened to be supplanted

by an electronic alternative at any

minute?



5


just the last five years that we know to expect even advances and changes in the next 5 to 10 years, though we may not be able today to say exactly what those will include. whether these advances and changes will aid or impede the displacement of print and paper remains to be seen, though we can make some educated predictions.

The Changing Media LandscapeIn the 500 years since the advent of printing, the media landscape has changed, slowly at first, but quite rapidly in the 19th century. The first real media competitor to print was the telegraph (1844), and since then, new media channels have emerged at a fairly steady clipfrom the telephone (1876) to the fax machine (1856), to radio, motion pictures, television, home video, and ultimately the Internet. The emergence of social media in the 00s wasnt anything truly revolutionary, but rather represented an evolution of basic Internet capabilities.

If there is anything we can say about todays changing media landscape versus previous changes, its that new things are evolving much more quickly. look at what has changed in just five years:

TABLE 0.1 2005 vs. 2010Social and mobile media

Even now, as many people are still trying to come to terms with old social media, new implementations are starting to gain tractiongeolocation services such as Foursquare, for example, are looming on the horizon.

The forces that are sweeping through and altering the media landscape can be categorized in a few basic ways:

Changing Consumer DemographicsThe first digital natives were born in 1990 and 1991 and grew up never knowing a world without the Internet, mobile phones, and other high-tech devices. More than 60 million people in the U.S. alone have been born since the Internet went into broad public use in 1995. with a population of 307 million today, that means that 19 percentalmost one fifthof the U.S. population has never known a life without the Internet.

Changing Trends in Advertising and Marketingone consistent data point of the past 15 years is that advertiser spending on old media (which includes print) is on the wane while spending on new media (Internet, search, mobile) is on the increase. as an example, media tracker eMarketer estimates that in the U.S. alone, online will account for just over 20 percent of all media spending by 2014.

Social Mediawhile blogs and YouTube can in some sense be considered social media, what we typically mean by social media is Twitter and Facebook. Media tracker eMarketer estimates that worldwide spending on social-media marketing in 2011 will be in excess of $2 billion.

Mobile (smartphones and tablets like the iPad)The line between social media and mobileor between the web and the mobile webis getting more and more blurred. Marketers and

CLICK TO VIEW TABLE

Executive Summary



6


advertisers have seized on mobile app developments as a way to help get the user to decide to be marketed to.

Publishing Trendsnewspaper circulation peaked in the 1970s, and started to level off in the 1980s. By the time the world wide web went public in 1991, the decline had already been starting, due in large part to the advent of cable news in 1980. Magazines have seen similar declines. according to data from the audit Bureau of circulation, between the years 2000 and 2010, U.S. magazine subscription circulation dropped about three percent, even as the population rose nearly 1 percent per year. E-books are the only book category experiencing double-digit growth rates (71 percent caGr between 2002 and 2009, according to the association of american Publishers), thanks to compelling new hardware devices such as the amazon Kindle and the apple iPad. 2010 saw the first million-selling e-book author(s): the late Stieg larsson, of the ubiquitous Millennium series, was the first author to sell one million Kindle e-books, while James Patterson was the first to sell one million e-books comprised of various formats.

Changing Trends in Corporate CommunicationsBusiness letters, forms, annual reports, etc., have been migrating in digital directions. E-mail, instant messaging, and the mobile phone have largely replaced other types of business communications, and forms are more often than not produced on an office printer, although PDF-based or online forms are quickly replacing printed forms. a 2008 study of annual report trends found that 28 percent of companies offer a link to their annual report (usually in PDF form) on their corporate web site, 13% of canadian and 24% of U.S. companies

offer an HTMl version of their annual report, and only 7% offer the entire report only in HTMl. annual reports are important investor and public-relations documents, and if the migration to sole electronic format has been slow, it will likely increase, especially as the slickest annual reports begin to incorporate rich media, such as animation and video. letters from company presidents and cEos have always been an important feature of annual reports, so it is not unreasonable to expect that video letters will gradually replace written ones.

Drivers and Barriers for Electronic Displacementwhat are those factors that are driving the changing media landscape we saw in the last section? and what are those factors that impede those changes? we can identify a few areas:

Consumer Technology Adoption TrendsFuturist and inventor ray Kurzweil has often written about the exponential rate of technological change. For example, it took about fifty years for the telephone to achieve a significant level of usage, yet it took only about ten years for the mobile phone to achieve similar levels. as for other consumer technologies:

TABLE 0.2 Adoption rates of selected consumer technologiesYears to Reach 10% Adoption

Years to Reach 50% Adop-tion

Video cassette recorder 10 14compact Disc Player 4.5 10.5color TV 12 18Mobile phone 8 15Personal computer 4 18

Source: Ray Kurzweil, The Singularity is Near, Viking, 2005, pp. 48-49

Executive Summary



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note that none of these are print-based, and yet every new nonprint consumer technology that has achieved any degree of adoption is one more driver for the displacement of print.

an even bigger force is broadband adoption. Dr. Joe webb, of whatTheyThinks Economics and research center, has calculated that for every additional hour of broadband time spent online at home, U.S. commercial printing volume declines by $2.

Publishing Trendsone deadly mistake that newspaper and magazine publishers made early on was fail to charge for online content from Day one. The problem today isnt so much that readers dont want to pay for content; its that they got inured to the fact that online content was free. Publishers didnt assign any value to their online content at the outset, and as a result, neither did the marketplace. Branded apps for the iPad have been viewed as a potential salvation for the publishing industry, but it remains to be seen what the value proposition for the reading public is. Its difficult to imagine how branded magazine apps can compete with the breadth of information that exists for free online. For instance, in technology journalism, how can a traditional print vehicle like Popular Science compete with the Gizmodos, BoingBoings, and Engadgets of the Internet, all of which are blog-like in format and have achieved enough recognition that they are granted the same (if not better) access to primary industry sources that so-called real journalists enjoy.

Text to Rich MediaThe history of media changes in western culture has been a steady migration from static to dynamic content.

That is, from text and images to rich media such as animation, video, audio. The biggest growth area for rich media is online video. In September 2010 alone, more than 175 million U.S. users watched online video. and more and more businesses are starting to incorporate online video, and not just for delivering ads. new developments in print could help bridge this gap between static and dynamic media. Printable electronics or the ability to add small displays to printed materials can make print rich, adding a visual component that is only a short leap away from those greeting cards that play songs when you open them. other interactive print elements such as Qr codes and augmented reality use print as a jumping-off point for rich media experiences.

Growth of Electronic BooksSince 2006, e-books have become more mainstream, and while they represent a very small percentage of overall book sales, they are growing steadily and strongly. E-books have gone from one-half percent of all U.S. book sales in 2008 to one percent in 2009. Still a drop in the bucket, but if you accumulate enough drops, eventually you get a pretty full bucket. There are several barriers to e-books displacing printed books. The first is the variety of formats and devices available, which is often frustrating for consumers, as well as emerging price wars in which it is not unusual to find a title in hardcover that is less expensive than its corresponding e-book version.

Executive Summary



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Enabling and Disabling TechnologiesThe following items are some basic technologies that provide the foundation for the displacement of print and paper: Internet Search Broadband/wiFi cloud computing rFID

The following are media enablers that use some of the above technology enablers to further displace print and paper in specific niches: web sites E-mail Blogs rSS Podcasts Social media Video Geolocation

The following are some hardware devices and technologies that are enablers of the displacement of print in that the Internet, social media, e-mail, video, and all the media enablers cited above can be accessed on these devices. E-readers and e-books Smartphones Tablet computers

The following are some display enablers, or new display technologies and developments that are making electronic reading more comfortable and viable, offering yet another way that print and paper can be displaced: Flexible displays 3D displays

The following are some disablers, or technologies that can help print and paper compete with electronic media, particularly when it comes to the twin issues of timeliness and relevance, which have largely been the forces driving the adoption of electronic dissemination of content. Print on demand Printed electronics Quick response (Qr) codes augmented reality (ar)

Impact on Paper: Outlook to 2020what does the future hold for paper? Print and paper applications will be affected in different ways. The applications that will be most heavily displaced by electronic media include: Directories Financial statements/bills Manuals/technical documentation Transpromotional Flyers letterhead/envelopes

Executive Summary



9


Those applications that will be moderately displaced by electronic media include: Books catalogs Magazines newspapers checks legal documents Signage Direct mail Brochures retail labels

Those applications that will be minimally or negligibly displaced by electronic media include: Business cards Passports/licenses/personal ID credit cards Folding cartons Flexible packaging adhesive labels

Displacement Conclusionswhile its true that there is a tremendous paper-to-pixel shift happening, which will only intensify in the coming decade and beyond, it will forever remain a multichannel, multimedia world, and print will need to complement and supplement these other media. It behooves printers and their universe of suppliers and vendors to help them assist communicatorswho are, after all, printers

customersto integrate and effectively use all of these (and future) media in tandem. That is where the real opportunity for the paper industry lies.

Executive Summary



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Introductionas I was finishing this report on the displacement of paper and print by electronic media, I happened to readelectronicallya review of a new biography of al Jaffe, a U.S. cartoonist and longtime contributor to Mad, a humor/satire magazine that was somewhat of a staple of the typical american childhood in the 1970s. Jaffe invented what is known as the cover fold-in, which works like this: The inside back cover of the printed magazine asks a question and, below it, features a single drawing and a paragraph of text. There are two arrows labeled a and B, and when the page is folded so that a and B meet, the remaining unobscured text underneath the picture becomes a satirical answer to the question, while the picture morphs into a new image illustrating the new text.

My initial thought was, a-ha! Thats an application of print/paper that couldnt really be replaced by electronic media. curious, I did a search and found that The New York Times has an interactive Flash-based archive of Mad magazine cover fold-ins that lets users virtually fold digital magazine covers. Sigh.

Trying to think of a print application that cant be supplanted by an electronic alternative is becoming more and more difficult. Every day, it seems, some new story hits the papers (the term papers being more metaphor than anything, as these stories usually appear on web sites) about some new application of electronic media. Such as, say, this story from the new York Times:

At Bones, Atlantas most venerable steakhouse, a clubby place

of oak paneling and white tablecloths, the gold-jacketed waiters now greet diners by handing them an iPad. It is loaded with the restaurants extensive wine list, holding detailed descriptions and ratings of 1,350 labels.

call it novelty perhaps, but the restaurant has seen wine sales per diner increase 11 percent. Some people still prefer to question the sommelier about wine choices, obviously, but others find that an electronic wine list provides an ostensibly unbiased opinion. For the restaurant, the e-wine list is linked to the inventory system, facilitating reordering and stock management.

we often think of paper and printing in terms of obvious applications: direct mail, magazines and newspapers, etc., and the electronic displacement of these items has been well-documented, and will continue to be throughout this report. But what about smaller stealth print and paper applicationslike wine lists?Is paper as a medium for conveying content in danger of extinction? and if it does not become extinct, then how endangered might it get? what are the forces at work that make extinction a viable possibility to ponder, and, conversely, what are the forces that could keep print from falling over the brink? where will paper be in the year 2020?

we will explore this topic in this report.we will find that technology is spearheading this transition, but at the same time peoples attitudes toward paper are changing. In fact, paper use is often seen as an unmitigated environmental evil.

Introduction and Methodology

1Trying to think of

a print application that cant be

supplanted by an electronic alternative is

becoming more and more difficult.

Every day, it seems, some new story

hits the papers...



11


For example:

Do Not Print In the United States it is common to see, appended to the signature files of many peoples e-mails, the admonishment Please think about the environment before printing this message. The implication is that paper is an unspeakably evil environmental scourge and that pixels and the electronics that power them are sacred and holy, the salvation for the planets environmental woes. In august 2009, a New York Times blog post asked, are E-readers Greener than Books? and cited a study that reported that e-book readers such as the amazon Kindle have less of an environmental impact than printed books do: The report indicates that, on average, the carbon

emitted in the lifecycle of a Kindle is fully offset after the first year of use.

The report, authored by Emma ritch, states: any additional years of use result in net carbon savings, equivalent to an average of 168 kg of co

2 per year (the

emissions produced in the manufacture and distribution of 22.5 books).

But lets be perfectly clear: Electronic media do have a carbon cost. In fact, in early 2009, a Harvard physicist made headlines when he managed to calculate the carbon cost of a Google search. The BBc, among others, reported: U.S. physicist alex wissner-Gross claims that a typical Google

search on a desktop computer produces about 7 g co2.

The Harvard academic argues that these carbon emissions stem from the electricity used by the computer

terminal and by the power consumed by the large data centers operated by Google around the world.

Though wissner-Gross subsequently corrected his data (seems he overestimated slightly), the fact remained that electronic media do have a carbon cost.

Meanwhile, a 2007 Gartner Group report warned about the carbon cost of all the servers that comprise companies intranets and the Internet in general: The intense power requirements needed to run and

cool data centers now account for almost a quarter of global carbon dioxide emissions from information and communications technology.

and lets not forget all the discarded computers, peripherals, mobile phones, PDas, iPods, and so on.

Its becoming increasingly common for print-based media to come under fire for being environmentally irresponsible, although the argument doesnt quite hold up under close examination: Yes, the use of paper cuts down trees, but trees are a renewable resource, and the U.S. paper industry plants 1.7 million new trees each day, for a total of 621 million new trees planted per year, for a net gain of 521 million trees annually. and, yes, discarded paper ends up in landfills, but how many first- and second-generation Kindles are going to end up in landfills in the next few years where, unlike paper, there is no possibility of their biodegrading? and depending on the batteries they contain, they may also leach toxins into the groundwater.




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There nonetheless appears to be a movement afoot to essentially ban paper (there is Do not Mail legislature coursing through various state governments that would make it illegal to mail materials to people who specifically ask not to receive unsolicited matter. It is rather obvious, however, that we dont actually need legislation, or any kind of encouragement, to reduce the use of paper.

Therefore, the major theme of this report will be: where does our increasingly electronic media-based culture leave paper and, ultimately, the entire paper industry?

Objective and ScopeThis report, then, aimsin a hybrid quantitative/qualitative wayto gauge the extent to which print and paper are going to be displaced by some form of electronic media by 2020. There are, however, two ways that this displacement is occurring: The first is by direct replacement of content by that same content in a different form, such as a printed book being replaced by an electronic version. The second is by media consumers shifting their interest from one medium to another, such as preferring to watch television rather than read a book, or surf the Internet rather than leaf through magazines. Both forces are at work, but the second has been at work for generations.

chapter 2 of this report, following this Introduction, looks at the changing media landscapewhat are the demographic, advertising, publishing, social-media, mobile, and corporate communications trends that are affecting any displacement of print and paper?

chapter 3 looks at the drivers and barriers of electronic displacement in the context of consumer technology adoption, technology shifts in publishing (especially e-books), a gradual transition to rich media, and other related topics.

chapter 4 lays out the roster of displacement enablersthe Internet, wiFi, social media, e-books, iPads, etc.and gauges each ones potential to displace print and paper in addition to revealing any flaws in these enablers. This section also provides some disablersnew developments in printing that can help deter the displacement of print and paper.

chapter 5 provides a look at each category of printed material, and an estimate of how much each will likely be displaced in the next 10 years.

MethodologyThe bulk of the research for this project was the result of the authors experience covering the emergence and proliferation of electronic media for the past 15 years. This report includes the results of studies and analyses of government and industry data (many of which the author has participated in) that look at the growth of electronic media at the expense of print and paper. There has been much trawling through secondary research, as well as a great number of conversations (and even formal interviews) with people inside and outside the industry over the past decade. a prior Pira study published in 2008 called The Electronic Displacement of Print: Forecasts to 2018, was also a good source of information.Much of the information and data have a U.S. spin, but the same




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forces are at work pretty much all over the world, and in some surprising places. In many ways, the U.S. lags behind some other countries in the ubiquity of electronic media and, in particular, reliable Internet access everywhere. asian cities such as Seoul and Tokyo are the most wired cities in the world, and even in parts of africa (Kenya, for example) actual printed money has been replaced by mobile-phone-based financial transactions. In Section II we look at how much has happened just since 2005 that was completely unforeseen, so we should expect that things will likely appear in the next 5 to 10 years that no one has any idea about right now. whether these advancements and changes will aid or impede the displacement of print and paper remains to be seen, though some basic conclusions on the issue can be drawn.




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IntroductionThe invention of printing in the mid-fifteenth century displaced the predominant method of disseminating content that had been in place since the days of charlemagne: scribes. That is, monks used to hand-copy books and other documents. By the 1490s, the scribe was well on his way to obsolescence, which distressed a German abbot named Johann Trithemius. Back then, one of the side benefits of hand-copying manuscripts was that the effort left ample time for prayer. So Trithemius wrote a treatise called In Praise of Scribes, in which he urged scribes not to abandon manuscript copying. and then, in one of the great ironic moments of history, Trithemius had In Praise of Scribes printed on a printing press so that he could get it produced and distributed quickly. So the next time you see a commercial printer marketing his services via e-mail or other electronic media, think of Trithemius and how he embraced new media to promote old media.

In the 500 years since, the media landscape has quite obviously changed, albeit slowly at first. It wasnt until the mid-nineteenth century that the first real media competitor to print emergedthe telegraph, in 1844. Since then, new media channels have emerged fairly steadily, from the telephone (1876) to radio, motion pictures, television, home video, and ultimately the Internet, which began its domination of the media landscape in the 1990s. The emergence of social media in the 00s wasnt anything truly revolutionary, but rather represented an evolution of basic Internet capabilities, much like, say, the postcard (developed in the 1860s) wasnt a revolutionary printing application, but rather evolved out of lithographic printing as well as changes in the postal system.

If there is anything we can say about todays changing media landscape versus previous changes, its that new things are moving much more quickly. How quickly? The table below gives a snapshot of what has changed in just five years:

TABLE 2.1 2005 vs. 2010Social and mobile media2005 2010no Twitter (launched 2006) 106 million-plus Twitter users

no amazon Kindle (launched 2007)

3 million=plus Kindles sold; first million-e-book-selling Kindle author (the late Stieg larsson)

Facebook an obscure student site

500 million-plus active Facebook users

no iPhone (launched 2007) 50 million-plus iPhones sold; 100,000-plus apps developed; 3 billion-plus apps downloaded

no iPad (launched 2010) 3 million iPads sold in 80 days

Source: Pira International Ltd

Even now, as many people are still trying to come to terms with old social media, new implementations are starting to gain tractiongeolocation services such as Foursquare, for example, are looming on the horizon.

and now, at the beginning of the second decade of this century, there are already a multitude of media channels that, say, any marketing professional would be remiss not to consider when crafting a message.

The Changing Media Landscape

2Even now, as many

people are still trying to come to

terms with old social media, new implementations

are starting to gain traction

geolocation services such as Foursquare,

for example, are looming on the

horizon.



15


The following is just a partial listing: Print advertising Postcard/direct mail Periodicals (magazine/newspaper) E-zines/e-newspapers (like Zinio, newsstand) Printed newsletter Printed catalog web site online ad Search (paid) advertising Search engine optimization (SEo) E-newsletters/direct e-mail Telephone marketing SMS/MMS marketing (aka texting) Electronic displays aTMs Gas pumps appliances cars Store checkout lines Sporting eventsevery available surface T-shirts Banners outdoor graphics Vehicle wraps Transactional/transpromotional Blimps Blogging/vlogging Podcasting

rSS Viral marketing wallpaper ringtones Social media (Twitter, Facebook, etc.) YouTube Mobile marketing Smartphone apps Social bookmarking/folksonomy (Digg, Delicious) Geolocation services (Foursquare)

There are three dominant issues that anyone involved with the printing and paper industries needs to understand:

The proliferation of media and channels means that any given marketing budget pie must now be cut into more slices. and, at the same time, it is rather unlikely that a marketing budget will increase enoughif at allto cover the expense of those new slices.

Media choice is a personal consumer preference, and companies that focus exclusively on just one or two channels run the risk of bypassing everyone else entirely.

Marketing requires a strategy vis--vis media choice to ensure that the individual or company crafting a message reaches the appropriate people in the appropriate way.




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In the case of publishing, there may be fewer channels, but the ability to disseminate content in multiple media simultaneouslyand somehow monetize ithas never been a greater challenge. Publishers are by necessity starting to become if not kings, then perhaps at the very least dauphins of all media, as they spin out the same basic content in print, on the web, via e-newsletters, Twitter posts, Facebook, and/or as mobile-phone apps, etc. The publishers goal is to get content to as many consumers as possible in whatever way they prefer it; that consumers prefer content for free has been a perennial problem.

The forces that are sweeping through and altering the media landscape can be categorized in a few basic ways: changing consumer demographics changing trends in advertising and marketing The emergence and proliferation of social media and its

gradual evolution changing trends in corporate communications The emergence of mobile (via smartphones and tablets

like the iPad) and the increasing portability of internet content

Consumer DemographicsThe first digital natives were born in 1990 and 1991; they grew up never knowing a world without the Internet, mobile phones, and other high-tech devices. These folksone can scarcely call them kids anymoreare now in university, and if theyre not already in the workforce, they will be shortly.

The next batch are the so-called millennials, kids who were born circa 2000 and are now their tween and preteen years, and have grown up thus far with an even greater relationship to new technology. Dr. Joe webb, director of whatTheyThinks Economics and research center, has estimated that more than 60 million people in the U.S. alone have been born since the Internet went into public use in 1995. with a population of 307 million today, that means that 19% of the U.S. population has never known life without the Internet.

Take this USa Today article from four years ago:

A.J. Hunter cant start the day without first pulling out his laptop. Each morning, the 21-year-old Ball State University junior downloads his schedule onto his Mac Powerbook G4, whichalong with his iPod and cell phoneis always close at hand.

Hunter, of Uniondale, Indiana, is a typical tech-savvy college student. He can access the social networking site Facebook from his cell phone. He uses e-mail and instant messaging anywhere on the wireless campus. He downloads music to his laptop and his iPod, and he uses a 1-gigabyte flash drive provided by the university to transfer files and songs and to access his digital portfolio.

An elementary-education major with a concentration in technology, he says the portfolio includes lesson plans and other documents illustrating his progress in his field. He transfers files to his folder on the universitys iLocker to save storage space on his computer.




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Technology is so second-nature, I cant even think of when I use it and when I dont. Its such a part of life, he says.Hunter isnt a techno-geek. Hes just a digital native a term that has been used to describe millennials, the first generation who grew up in a world filled with computers, cell phones and cable TV.

and this was before there were Kindles, iPhones, or iPadsand even before Facebook and Twitter.

The people growing up in a completely wired/wireless world obviously have a much different relationship to print and paper than their forebears. This is not to say that everyone under 30 is a digital nativejust as not everyone who grew up in the 1970s was glued to the televisionbut a fair proportion are, simply because theres no real reason not to be.

any displacement of print and paper will largely be driven by young people who, obviously, grow older, and bring their media consumption habits and preferences into adulthood with them. and just as older people continue toputting it euphemisticallyexit the market, obviously that original 20 percent of digital natives will only continue to grow.

Advertising and Marketing Trendsone of the consistent data points of the past ten to fifteen years is that advertiser spending on old media (which includes print, television, and radioso-called offline media) is on the wane while spending on new media (Internet, search, mobile) is on the increase. The numbers and projections vary according to who is

providing them, but there are general trends.as an example, Kantar Media (www.KantarMediana.com) is one company that tracks advertising spending and makes periodic announcements about past and prospective spending. In September 2010, Kantar released their data on U.S. advertising spending in the first half of 2010. The chart below provides some top-level spending data, while the table that follows drills down a bit deeper.

FIGURE 2.1 U.S. advertising expenditure increase/decrease, January to June 2010 (%)

TABLE 2.2 U.S. advertising expenditure increase/decrease, January to June 2010 (%)

another U.S. media tracker, eMarketer, also releases estimates and projections of advertising and marketing spending by media channel. In June 2010, they issued revised numbers of online advertising (see below figure). Individual media growth numbers alone are not especially helpful; in the case of online and other new media, double-digit growth is easy when youre starting from a very low base. what is more telling in the figure below is the growth in online as a percentage of all media advertising spending. according to eMarketer estimates, in the U.S. alone, online will account for just over 20 percent of all media spending by 2014.

FIGURE 2.2 U.S. online advertising spending, 2008-2014

Its a bit amusing to look even as far ahead as 2014, given how quickly things change and channels appear. after all, how many

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five-year forecasts in 2005 said anything about mobile or social media dominating in 2010?

Social MediaSocial media encompasses a variety of formatsblogs and YouTube can in some sense be considered social media. Forecasters and estimators tend to use the term social media almost exclusively in reference to Twitter (microblogging) and Facebook (social networking). Spending on these channels can include not only display ads (such as in Facebook) but also on social-media managementthat is, allocating resources to monitor social-media mentions, and tweeting about ones company or brand.

eMarketer estimates on social-media spending are shown in Table 2.3

TABLE 2.3 Social-media marketing spending, U.S. vs. non-U.S., 2009-2011 ($ billion)

2009 2010 2011U.S. 1.40 1.68 2.09

non-U.S. 1.13 1.62 2.17

Source: eMarketer

More than a decade ago publication editors used to be barraged by printed press releases and press kits. By the middle of the 2000s, the number of snail-mailed press releases/kits received in the course of a year could be counted on the fingers of one hand while the corresponding number of e-mailed press releases increased exponentially. now, the number of e-mailed press releases seems to be slowing while the number of Pr-related tweets and Facebook updates seems to be on the rise.

Advertising Age magazine had an editorial in the September 2010 issue in which theyperhaps prematurelydeclared the press release officially dead. Today most press kits are distributed via e-mail, and even at shows, cD- or DVD-related press kits are more and more the norm. Since 2008, tweets have functioned much like mini-press releases, and social media management is an increasingly large part of public relations. while it is likely to not replace the press release as we know it, social media do supplement and complement more or less traditional Pr functions.

Say what you want about social media, but it is quickly displacing traditional information sourcesand traditional here can even include formats like web sites and blogs which, having been around for more than a decade, can already be considered old media. Indeed, blogs and other online information sites can be programmed to autotweet.

The evolution of social media will likely encompass so-called geolocation services or location-based applications. what are location-based applications? The three top names associated with location-based applications at the moment are Foursquare (http://foursquare.com), Gowalla (http://gowalla.com), and loopt (www.loopt.com). location-based applications are a new type of social-networking software that lets users update their physical location using mobile versions of location apps or text messaging. Essentially, a user checks in at a venue (like a coffee shop) using a mobile web site, text messaging, or specific application. S/he is then awarded points and sometimes badges. Users can find themselves appointed mayor of a particular location if they go




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there often enough. Some location-based services, such as Gowalla, award prizes to users, which can be thought of as a marketing tool for companies.

never heard of any of this? Youre not alone. a Forrester research study that came out in late July 2010 found that the user base of these services is very small, finding, for example, that only 4% of U.S. online adults have ever used location-based mobile apps, and a scant 1% update them more than once a week. Even more important, 84% of respondents said they arent familiar with them at all.

FIGURE 2.3 Extent of familiarity with geolocation applications (%)

location-based apps are less than two years old (some even younger), so its not surprising that their names arent household words for the majority of users. But that, of course, may change.

MobileThe line between social media and mobile is becoming more blurred. or, indeed, the line between the web and the mobile web. at present, there is a distinction, but it seems more than likely that in two years the term mobile web will be an anachronism, a relic of an obsolete technology, or a time when the Internet could not be readily accessed by mobile devices.

The term mobile conjures up images of iPhones, BlackBerrys, and other smartphones, but the apple iPad and other new tablet Pcs hitting the market also fall into the mobile category. The serious

challenge for print and paper isas we saw in the Introduction with the story about electronic wine liststhat the iPad makes Internet content exceedingly portable in the same way the iPhone did, but with a form factor that is more comfortable to read and interact with. The iPad and other devices such as the amazon Kindle are also usurping traditional publishing applications such as books, magazines, and newspapers away from print. (we will look at this in more detail in Section III.)

Mobile advertising and marketing is one of the older (more than ten years) forms of new media marketing, and yet the concept has evolved to become almost unrecognizable in practice from what it had been conceived as. In the late 1990s, when mobile phones began to proliferate, marketers seized on the idea of using them as an advertising and marketing vehicle. one early concept was to identify when a phone was near a particular location and then send targeted pitches to it. For instance, if someone was walking past a Starbucks, their mobile would ring, and theyd get an advertisement for coffee. For fairly obvious reasons, this never really took off; at the timeand in large measure stillmobile phone owners pay for incoming calls and the thought of paying to receive what would be essentially telemarketing calls would derail mobile marketing even before it started.

about five years later, the smartphone appeared. SMS and MMS messaging (i.e., texting), the mobile Internet, andwith the advent of the apple iPhone in 2007mobile apps have all helped to make mobile marketing and advertising a reality, albeit in ways no one expected. In fact, this very idea now forms the basis of location-

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based apps. Instead of your mobile ringing when you are outside a favorite coffee shop, you may get a notice via the Foursquare app on your phone that if you venture inside, a discount awaits you. The difference? Its the users decision. Getting an ad at randomespecially an intrusive one, like a call on your mobileput the power of the message in the hands of the advertiser. no one likes relinquishing power over their own devices, but when its the user who controls the relationship with the advertiser, thats a whole different story. This is one of the reasons that marketers are so keen on iPhone and iPad apps: They are vehicles to provide what are essentially marketing initiatives, but in a way that users find entertaining, useful, and/or informative. and downloading them is the users idea.

Thats an important distinction because it has been found that usersespecially younger ones, who are the prime users of mobilesalmost universally loathe the idea of ads on their personal devices, as eMarketer reported in mid-2010:

Fully 100% of college students in the U.S. have a mobile phone, and they use them constantly to communicate and connect. as such, mobile marketing becomes more difficult among this group because they see the devices as so personal.

a Ball State University study of a primarily female group of college students found that a majority of them had seen ads on their phones, including 51.2% of smartphone or touchscreen phone users and 61.3% of feature-phone

users. Text ads were most prevalent.

Their reactions to ads were highly negative. More than 40% were annoyed to get an ad, compared with just 1.2% who were pleased and 17.6% who were neutral. Even more dramatic, nearly three in 10 said they were less likely to purchase a product after seeing a mobile ad for it. Slightly fewer reported their purchase intent was unchanged, but only a small number said mobile ads encouraged them to purchase.

what this means for the apple iad platform remains to be seen.what is iad? The iad platform is basically a way to serve ads to iPhone and iPad users by allowing developers and marketers to embed interactive ads within apps.

one iteration of iad scheme has been developed by the online radio station Pandora, which has its own ad platform for the iPad:

Pandora, which lets people create personal stations based on their music tastes, said the in-app ads can be targeted to listeners based on their age, location, and the music they like.

The ads from coffee brewer Starbucks will let users build their own personal Frappuccino drinks online, which then generate a radio station that tries to pair the music with their taste in coffee. The spot from lexus revs up the engine of an lFa sports car until it shatters a champagne




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glass. and Budweisers promo will connect people with the various music festivals that the beer maker is sponsoring.Pandora founder Tim westergren is eyeing the iPad as a more powerful ad platform than the iPhone, according to a story in Advertising Age. He sees apples tablet as particularly exciting for Pandora, since consumers carry the device around with them and engage with it as they listen to music.

Pandora now has 50 million users, with 30 million of them accessing the service through mobile devices, according to Ad Age. westergren said the company is adding about 10,000 new mobile users each day and is looking to drive that number even further with the iPad.

Its hard to find a music fan who isnt impressed with Pandoras Music Genome Project, even if the ads are occasionally intrusive, although much less so than traditional radio. like traditional advertising, it will be a hit-or-miss proposition. Given that even general web-based click-through rates have been declining, its difficult to see how the iad model will work any better.

Publishing TrendsIt is no secret that the Internet has greatly affected traditional publishing markets. But then, every new medium before the Internet made its impact felt as well. For example, the following figure, showing U.S. newspaper circulation figures going back 60 years, superimposes the appearance of new media.

FIGURE 2.4 U.S. newspaper circulation, 1940 2008

note that U.S. newspaper circulation peaked in the 1970s, and started to level off in the 1980s. By the time the world wide web went public in 1991, the decline had already been starting, due in large part to the advent of cable news in 1980.

That is to say, earlier, nonprint sources of news were far more responsible than the Internet for the decline in newspaper circulation.

Media in general, radio, television, video, the Internet, etc., have all, over the decades, steadily chipped away at print readership. Magazines have been experiencing similar declines.

FIGURE 2.5 Magazine ad pages, indexed, 1999-2010 (1998 = 100)

according to data from the audit Bureau of circulation, between 2000 and 2010, U.S. magazine subscription circulation dropped about 3 percent, even as the population rose nearly 1 percent per year.

as for books, data from the association of american Publishers has found:

TABLE 2.4 Compound annual growth rate for selected book categories, 2002-2009 (%)

all books 1.8

adult hardcover books 1.3

adult paperback books 2.6

E-books 71

Source: Association of American Publishers

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E-books are a hot topic these days, thanks to compelling new hardware devices such as the amazon Kindle and the apple iPad. 2010 saw the first million-selling e-book author(s): the late Stieg larsson, of the ubiquitous Millennium series, was the first author to sell one million Kindle e-books, while James Patterson was the first to sell one million e-books across all formats.

Publishers are striving to find their place in an increasingly electronic world. Still, its important to bear in mind that their own landscape has been changing for decades, due in large part to long-term declines in reading in general. curiously, new technologies may actually reverse this trend. a study released in august 2010 by the U.S. childrens publisher Scholastic has found that the existence of e-books may stimulate more children to read books for enjoyment, something that (at least in the U.S.) has been in decline for decades (most people blame the TV for that one).

Corporate CommunicationsIts no secret to anyone that what we think of corporate communicationsbusiness letters at its most basic, forms, annual reports, etc.have been migrating in digital directions. E-mail, instant messaging, and the mobile phone have largely replaced other types of business communications, and forms are more often than not produced on an office printer, although PDF-based or online forms are replacing printed forms. one relative bright spot in printed corporate communications remains the annual report, which is still considered a company showcase; therefore, companies tend to spring for higher-end print-manufacturing capabilities that will help convey the rosiest picture of their vitality and financial

standing. a 2008 study of annual report trends found that 28 percent of companies offer a link to their annual report (usually in PDF form) on their corporate web site, 13 percent of canadian and 24 percent of U.S. companies offer an HTMl version of their annual report, and only 7 percent offer the entire report only in HTMl.

annual reports are important investor and public-relations documents, and if the migration to a total electronic format has been slow, it will likely pick up steam, especially as the slickest annual reports are starting to incorporate rich media, such as animation and video. letters from company presidents and cEos have always been an important feature of annual reports, so it is not unreasonable to expect that video letters will gradually replace written ones.




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Introductionwhat factors are driving the changing media landscape we saw in the last section? and what factors are impeding those changes? we can identify a few areas: consumer technology adoption trends Publishing trends Migration away from static text and images to rich

media Growth of electronic books

Consumer Technology Adoption Trendsanticipating what the consumer is going to latch onto has always been a fools errand at best and rife for retrospective embarrassment at worst. Take, for example, some of these hilariously misguided quotes, which always turn up in conversations about how forecasters, predictors, and prognosticators got it wrong:

Heavier-than-air flying machines are impossible.lord Kelvin, president of the British royal Society, 1895

Everything that can be invented has been invented. charles H. Duell, commissioner, U.S. office of Patents, 1899

Who the hell wants to hear actors talk? Harry M. warner, president of warner Brothers, 1927

There is not the slightest indication that [nuclear] energy will ever be obtainable. albert Einstein, 1932

There is no reason for any individual to have a computer in his home. Ken olsen, President, Digital Equipment corp., 1977

640K ought to be enough for anybody. attributed to Bill Gates, 1981

We dont like their sound. Groups of guitars are on the way out.Decca recording company executive, 1962, rejecting The Beatles

and this is nothing new. no one in the 1450s could have foreseen the impact that the invention of printing would have on the world, just as no one could have foreseen the impact of the telegraph or the telephone, and just as few foresaw the impact of the Internet. Sure, there are always a few visionaries, but they are few and far between.

and the situation is the same with some of the even newer technologies that are emerging. Mobile? Social media? location apps? were any of these on anyones radar five years ago? In 1999, did anyone expect the iPod and iTunes would decimate the record industry? In 1990, did anyone ever even utter the word Internet? In 1975, could anyone have anticipated that home video would completely disrupt the film industry? In 1935, were radio executives worried about something called television?

There is a sense now, though, that more and more disruption is happening much more quickly. Its not an illusion. writers and futurists point out that technological evolution happens exponentially. So we can look forward to new things emerging and

Drivers and Barriers for Electronic Displacement

3anticipating what

the consumer is going to latch onto

has always been a fools errand

at best and rife for retrospective

embarrassment at worst.



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taking over even faster. But just as the perception of the passage of time speeds up as we get older, so the reality of technological change speeds up as time goes on.

Futurist and inventor ray Kurzweil has often written about the exponential rate of technological change. For example, it took about fifty years for the telephone to achieve a significant level of usage, yet it took only about ten years for the mobile phone to achieve similar levels. as for other consumer technologies:

TABLE 3.1 Adoption rates of selected consumer technologiesYears to Reach 10% Adoption

Years to Reach 50% Adoption

Video cassette recorder 10 14

compact Disc Player 4.5 10.5

color TV 12 18

cell phone 8 15

Personal computer 4 18

Source: Ray Kurzweil, The Singularity is Near, Viking, 2005, pp. 48-49

note that none of these is print-based. In fact, every new nonprint consumer technology that has achieved any degree of adoption is one more driver for the displacement of print. after all, a Vcr (and later a DVD player), a TV, a Pcall of these things represent things that one can be doing instead of consuming print.

Take broadband. The increase in broadband Internet adoption has been exceedingly briskand has had an even bigger impact on the demand for print and paper. Dr. webb of whatTheyThinks Economics and research center has plotted the adoption of

broadband access against the value of printing shipments:

FIGURE 3.1 Billions of household broadband hours vs. billions of printing dollars, 2000-2009

regression analysis (r2 = 72 percent) finds that for every additional hour of broadband time spent online at home, U.S. commercial printing volume declines by $2.

and the Internet represents even more things that consumers can be doing than consuming print. In fact, broadband Internet has the potential to replace everything in Table 8, above. Video can be streamed online, TV programmes can be watched online, phone calls can be made using Skype or other VoIP services, and music can be streamed from online sources. and since all of these things can also be done on an iPad, or even a mobile phone, there will come a time when you wont even need a personal computer anymore.

So when the things that displaced print are themselves displaced, that doesnt bode especially well for print, does it?

TABLE 3.2 Consumer technology adoptiondrivers of and barriers to displacement of print

Publishing Trendswe looked at some of the statistics on the three major publishing markets (books, magazines, newspapers) in chapter 2, but here well look at some general qualitative publishing trends, confining our discussion to magazines, newspapers, and catalogs. Books will

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be discussed in a separate section below.

Magazines It has never been easier to physically produce and launch a magazine than it is today, and yet it has also never been harder to sell a magazine, either on the newsstand or by subscription. Most all industry datasets reveal print circulations declining and ad pages declining as well. Data from the postal service on weight of mail sent shows continuing declines. Does this signal the end of print magazines as viable content providers?Magazines took almost as long as newspapers to regard the Internet both as a threat and as an opportunity. Its a threat because it is a vast well of basically free content (and space), and magazine publishers early on did two things that came back to haunt them: They saw the web as the ugly stepchild of print and launched a bare-bones branded site merely to be able to say the brand had a web presence. They skimped on content, posting only a few select articles from the print edition, and over the years, they eventually added back issues.

More important is what they didnt do, which wasin generalcharge for online content. The problem today isnt so much that readers dont want to pay for content; its that they got inured to the fact that online content was free. Publishers didnt assign any value to their online content at the outset, and as a result, neither did the marketplace. and so, those digital natives mentioned in Section II, who grew up with the Internet, grew up thinking that the only reason you pay for content is that print is expensive to produce, that the content itself is valueless and wants to be free. Its difficult to say that content wants to be free; rather, it seems

more the case that people want content to be free.

now, what the appropriate price of online content should be is open to debate. Sure, publishers dont have the physical printing and mailing, but there are costs associated with generating online content: paying writers and editors (in theory anyway, if not always in practice), paying designers and web hosts, and paying for the basic publishing company infrastructure. This is not to say that magazine publishing heads need seven-figure incomes and swanky Midtown Manhattan offices, but there are costs associated with the physical process of journalism, especially if you believe that most writers and editors should be paid for their efforts.

This then leads to the discussion of advertising and the ways that publishers have been trying to shift the financial burden of publishing (as B2B publishers do) on advertisers rather than subscribers. The problem publishers have found is that they have never been able to charge enough for online ads the way they do for their print ads. Is this because, as some have said, advertisers dont value online advertising as much as print advertising? That cant be the case, otherwise advertisers would hardly have been cutting their print spending in favour of online advertising, as study after study over the past decade or more has shown.

could it be, then, as others have said, that inventory in print is severely limited (you can only add so many pages or fractions of a page), while online inventory is nearly infinite? well, its not really infinite. and if youre, say, advertising in Newsweek magazine, there is still a pretty finite amount of space, whether youre advertising




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in the print edition or on their web site. In some ways, newsweek.com may have fewer pages than the Newsweek print edition; that is, a single feature story may jump to several physical pagesall of which can support advertisingbut only occupy one deep web page with perhaps less opportunity for advertising.

Fast-forward to 2010, and magazines are pinning their hopes for future growth on the iPad and, in particular, on apps that access magazine content. But it has not been easy, especially given apples walled garden approach to the app Store. The idea is to take the existing concept of the electronic magazine and improve upon it.

Electronic magazines are typified by the offerings of the likes of Zinio, an attempt to replicate the printed edition of a magazine in electronic form, usually via some kind of PDF-like download. This approach was taken often at the behest of the circulation auditors like the audit Bureau of circulations, who until recently mandated that electronic subscriptions can only be counted if the electronic edition was virtually the same as the printed edition.

In 2009, the audit Bureau of circulations announced that they were relaxing their requirements, allowing other types of electronic magazines to be counted as circulation. This was good news for those hoping to develop compelling iPad apps.

However, publishers soon ran up against another wall: apple. In some cases, users who want to subscribe to magazines on the iPad have to pay what is essentially the full newsstand

pricealthough some publishers (like Time Inc.) provide a free iPad subscription if you subscribe to the print edition, which rather defeats the purpose.

But apple actually prevents publishers from selling their own subscription plans. Time Inc. recently had a fight with apple over it. The Wall Street Journals all Things Digital in July 2010 commented:

The magazine giant has been unable to get Apple to let it sell and manage subscriptions for its iPad appsmuch to Time Inc.s surprise.

Last month, the publisher was set to launch a subscription version of its Sports Illustrated iPad app, where consumers would download the magazines via Apples iTunes, but would pay Time Inc. directly. But Apple rejected the app at the last minute, forcing the Time Warner unit to sell single copies, using iTunes as a middleman, multiple sources tell me.

Publishers prefer to control their own subscriptions. after all, subscription info is data, and data are power. Furthermore:

No other magazine publisher has approval to sell their own iTunes app subscriptions, either. But Apple and Steve Jobs had made a point of reaching out to Time Inc. executives and editors before the iPads launch, and encouraged them to build digital editions for the platform.




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Confusing the issue even more is that Apple already allows a handful of app makerslike Amazon and the Wall Street Journal, which, like this Web site, is owned by News Corp.to bill customers directly. Amazon itself, meanwhile, has been sparring with publishers over subscriptions for its Kindle platform. Jeff Bezos keeps most of the data and money that those transactions generate, too.

when you think about magazine subscriptions, you would think that you purchase the iPad app and new issues are automatically delivered to it, the same way the Zinio application works on a proper computer. not so: Sure, you get a notification of the issues availability, but the user still has to retrieve it manually.

Time Inc. and some other big publishers grumble, but others arent complaining too much. Bonnier launched their Popular Science+ for the iPad the day the iPad shipped, and, curiously, the digital version actually costs more for a year subscription than the print version. The app costs $2.99 and comes with one free issue; you then sign up for an account and can purchase additional issues for $2.99 a popthat works out to $35.88 a year for the iPad edition of Popular Science whereas the print version costs $12. likewise, Maxim magazine had originally charged a higher subscription rate for their iPhone app than for their print edition, until apple asked them to stop.

why the higher cost for the iPad version? In some ways, the publishers were doing something right. The digital version is not just an electronic version of the print edition; it has content

designed specifically for the medium. Bonnier sells Popular Science+ subscriptions as in-app purchases, so they can still glean the customer data they desire, but as long as publishers have to go through iTunes, they will largely be ceding control of their databases to apple.

as of this writing, there is no solution yet, which, interestingly enough, may help the Zinios of the world, who already sell subscriptions via their own apps, and charge for subscriptions more in line with print editions. But the idea is for publishers to develop their own iPad apps rather than outsource it to Zinio.

If magazine publishing is going to thrive in the digital environment, there needs to be some recapitulation of the old model of subscription salesafter all, this is any publishers bread and butter, and its unreasonable to expect readers to regularly buy single iPad copies at the single-copy rate. Few consumers buy print copies this way, and there is no reason to expect that they would purchase digital copies any differently.

on the other hand, it does open up the field to the various competitors to the iPad (such as, for example, research in Motion, makers of the venerable BlackBerry, whose PlayBook tablet Pc is due sometime in early 2011). If these competitors allow content creators more leeway in selling their content, apple may have to sit up and take notice.

The rules for magazines on the iPad are still being written (or at least fought over), and it will be some time before anything like a




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workable model emerges that suits everyone.

on a more macro leveland returning to the issue of electronic displacement of printits difficult to see how branded magazine apps can compete with the breadth of information that exists for free online. For instance, in technology journalism, how can a traditional print vehicle like Popular Science compete with the Gizmodos, BoingBoings, and Engadgets of the Internet, all of which are blog-like in format and have achieved enough recognition that they are granted the same (if not better) access to primary industry sources that so-called real journalists enjoy.

remember, too, that the digital natives are not wedded to traditional notions of publishing; to them a blog conveys just as much legitimacy as a century-old print publication. with the ability to post comments, corrections, arguments, cross-references, and flame wars, etc., in some ways free online media sources are more accurate and informative than traditional journalism.

TABLE 3.3 Magazine publishing trendsdrivers of and barriers toMagazine publishing trendsdrivers of and barriers to displacement of print

Drivers for displacement of print Barriers to displacement of printDecades-long trend away from print version

lower and lower cost of entry to pro-duce magazines

Porting of magazine content to branded apps

new print technologies (print-on-de-mand) can make print economically viable alternatives to nonprint

Portability of basic web content on smartphones, iPad

Strong legacy support for printed magazines


Newspapers The newspaper industry went through similar challenges as magazine publishers, but it is in even more desperate shape. like magazines, newspapers virtually ignored the Internet until it was too late. For instance, in March 1999, an American Journalism Review article titled State of The american newspaper: what Do readers really want? concluded that the biggest problem plaguing newspapers was news stories that jump to different pages. The Internet is barely mentioned at all. Its hard to imagine that no one saw the migration of eyeballs from print to pixels; especially whenas we saw in Section IIit had happened before. and most of us who lived through the 90s were already ahead of this transition.

like the magazine industry, newspaper publishers neglected to charge for their online content from the outset, virtually ensuring that no one would ever be able to charge for news content online ever again. after all, the idea of charging for something, especially something valuable, isnt really the issue. Its charging for something after it used to be free that causes resistance. If The New York Times had started charging for online access to its content the minute it went online, the discussion would be completely different here. But now, 15 years later, try as they might (and they have tried charging for various types of content periodically), they cant get a working paid-access model.

now there is a free war among all the providers of national news. If The New York Times starts charging, well, why not just go to The Washington Post? or even Yahoo! news or any of the other umpteen-million online news sites and aggregators. The existence




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of blogsespecially political onesalso precludes a pay-for-news model because highly partisan readers tend to gravitate toward their own pet blogs rather than mainstream news sites.

attempts at electronic editions la Zinio (via a service called newsStand) have met with some success. The major national newspapers have launched their own iPhone apps, and some have launched special iPad apps, as well, as they, like magazine publishers, are hoping that the iPad lends some of its luster to newspaper publishing.

one of the complaints leveled against newspapers on the iPad is publishers insistence on replicating a printed newspaper electronically, especially when it is clear that the best apps are those that play to the mediums strengths and put the emphasis on content, not layout.

another complaint is that some of the content-for-pay apps simply re-presented content that is already available for free on the papers web site. (The justification appears to be that youre paying for the presentation, which is a rather tough sell.)

Publishers seem to be of the opinion that the reading public will pay for trusted content. Though that is a logical assumption, they need to concede that consumers today dont place much trust in content (i.e., journalism) anymore.

another problem is that once newspaper publishers venture into media like the iPad, they are competing with news sources that

got their start in newer media, like broadcast or cable news and therefore already know how to develop content for multimedia rather than print-centric delivery. So while The New York Times Editors choice iPad app is nice, it has only a fraction of the content available on the actual Times web site (which can be accessed on the exact same device), and it isnt presented nearly as well as, say, the national Public radio (nPr) or BBc iPad apps.

TABLE 3.4 Newspaper publishing trendsdrivers of and barriers toNewspaper publishing trendsdrivers of and barriers to displacement of print

Drivers for displacement of print Barriers to displacement of printDecades-long trend away from print version thanks to competition from TV, cable news, Internet

lower cost of entry to produce news-papers

Porting of newspaper content to branded apps

new print technologies (print-on-de-mand) can make print economically viable alternatives to nonprint

Portability of basic web content on smartphones, iPad

Modest legacy support for printed magazines

competition from other news sources (e.g. cable) on same platform

local, alternative weekly, college papers still relatively strong


Catalogs The shift in the catalog publishing industry took place some time ago, and in many ways provides one of the great multichannel success stories. In fact, several years ago Catalog Age magazine changed its name to Multichannel Merchant, reflecting catalogers realization that they could no longer rely on a single channel to reach a fragmented market. So they now complement printed catalogs with e-mail blasts and e-newsletters, print direct mail, cable channel programming, blogs, social media, etc.




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a few catalog publishers also have iPad apps. Pottery Barn, for example, distributes their iPad catalogs through Pixel Mags. However, the first thing you notice about the Pottery Barn iPad catalog is that it takes about 15 minutes to download. In that time, you could use the iPad to go to the Pottery Barn web site, browse their latest products, and complete a purchase. In addition, the iPad catalog is slow and unresponsive, the navigation is less than intuitivebut worse, you cant actually order anything through it. You still have to go to potterybarn.com or call them.

IKEa also has an app, which is not optimized for the iPad, but rather the iPhone. like Pottery Barn, it downloads a very large catalog45 MB, which takes a while. However, IKEa does let you order items through the app.

Digital catalogs are nothing new; there were experiments with PDF-based catalogs back in the early 2000s, and they, for good reason, never caught on. Unless some more compelling and user-friendly iteration appears, its hard to imagine that the iPad apps will gain any traction. as in the aforementioned Pottery Barn example, theyre simply a more complex and time-consuming way of doing something that is actually very simple and fast to accomplish already.

The displacement of printed catalogs has already largely taken place, and will not likely continue much further. catalog publishing is a multichannel marketing strategy, and print will always play a large role in that. Still, online catalogswhether online-only or online as well as in printare playing an increasingly important

role, especially as e-commerce isnt an unfamiliar activity for consumers that it was a decade ago.

oxbridge communications publishes the annual National Directory of Catalogs, and in the 2010 edition, stated:

online-only catalogs today number 2000, up from 869 five years ago, reported MediaFinder.com, the largest online database of U.S. and canadian periodicals, including data on 12,431 catalogs. During the same time period, print catalogs declined from 3,836 to 1,158, while the number of catalogs appearing in both print and online formats increased from 6,661 to 8,640.

TABLE 3.5 Catalog publishing trendsdrivers of and barriersCatalog publishing trendsdrivers of and barriers to displacement of print

Drivers for displacement of print Barriers to displacement of printPrint catalog content displaced by e-commerce more than 10 years ago

Print catalogs will always be an important part of a larger multichannel marketing strategy

Increasing comfort with e-commerce Print direct mail also supplements and complements other media channels

E-mail and social media use by catalogers

Modest legacy support for printed catalogs

Increased comfort with e-commerce on mobile devices

lingering legacy fear of e-commerce


Text to Rich MediaThe history of media changes in western culture has been a steady migration from static to dynamic content; that is, from text and images to rich mediaanimation, video, audio. The telephone,




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moving pictures, radio, television, videoall of these progressions in the dissemination of content have worked steadily over the past century and a half to displace static, printed content. The Internet has been the first medium (or multimedia platform) that melded the old (text and graphics) with the new (rich media). Mobile devices such as e-books, smartphones, and tablet computers take this trend to its logical conclusion, and now a single devicean iPad, for examplecan serve as book, magazine, newspaper, catalog, letter-writing platform, video player, audio player, telephone.

when the printing press was invented in the 1450s, the population of Europe was approximately 50 million people, and the literacy rate at the time was estimated to be somewhere in the neighborhood of 1 percentor 500,000 people capable of reading a book. It took 100 years for the literacy rate to climb to 50 percent (driven, in large part, by the advent of the printed book). By then, the population had risen to 70 millionwhich means that it took 100 years for the number of people who could read what was printed to hit 35 million. Thus, it took more than 100 years for the users of print to reach 50 million. on the contrary, it took radio 38 years to reach 50 million users, and television 13 years to reach 50 million users. The Internet? Four years to reach 50 million users.

This goes back to the conversation earlier about the adoption rates for new technologies. and new technologies, new ways of disseminating content, inevitably take us farther away from print and paper.

The biggest growth area for rich media is online video. In September 2010 alone more than 175 million U.S. users watched

online video. and more and more businesses are starting to incorporate online video, and not just for ads. The figure below illustrates features being offered by multichannel retailers.

FIGURE 3.2 Rich media features offered by U.S. multichannel retailers, February 2010 (% of respondents)

new developments in print could help bridge this gap between static and dynamic media. That is, electronic paper may not be a metaphor; printable electronics or the ability to add small displays to printed materials can make print rich, adding a visual component that is only a short leap away from those greeting cards that play songs when you open them. where audio goes, video soon follows.

other interactive print elements such as Qr codes and augmented reality use print as a jumping-off point for rich media experiences; point a mobile phone camera at a printed code and launch a video, a web site, or some other interactive content.

TABLE 3.6 Text to rich mediadrivers of and barriers toText to rich mediadrivers of and barriers to displacement of print

E-book DevelopmentsElsewhere in this report, we have presented data on the sales of e-books as compared to printed books, but a curious data point came out from amazon at the end of July 2010:

over the past three months the company sold 143 Kindle books for every 100 hardback books. Kindle sales accelerated in the past month alone, when the online retailer said it sold 180 Kindle books for every 100

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hardbacks. The figures cover amazons U.S. book business and include hardback sales when there is no Kindle edition and exclude free Kindle books.

not bad for a technology that just five years ago was believed to be dead in the water. libraries, too, are almost universally adding e-books to their collections in response from what some say is overwhelming demand from patrons. The process is not without its challenges; competing e-book formats, draconian DrM (digital rights management), and library-unfriendly pricing and licensing schemes seem to be conspiring against them.

More and more bookstores, too, are adding e-books, as well as the e-readers. In the U.K., Foyles and waterstones offer Sony readers and compatible e-books. In the U.S., the two major chainsBarnes & noble and Bordersalso offer e-readers (Barnes & nobles sells its own nook, and Borders offers the Sony reader as well as a full line of low-cost e-readers). Then, of course, there is amazons Kindle and the apple iPad, the latter of which seamlessly interacts with the apple iBookstore.

Since 2006, e-books have leapt toward the mainstream, and while the