Please I need this by Wednesday thank you

(Student Name)

(Date of assignment)

EBM Assignment 2: Trends, PEST Analysis

The Magazine Publishing industry

Carol Wonsavage, instructor – Entertainment Business Models

Why I Chose This Industry

Before the internet, the main forms of communication to the public were newspapers, radio, TV and magazines. The first three were more immediate and covered the news and events of that day. Magazines offered a second look at news and events, published a week or so later with time to add context and analysis, with a more developed stories and color photos. They were great reading when I was growing up; my first career jobs were in publishing.

Background Magazines:

The business model of magazines in 1999 was based on hard-copy sales, with initial revenues from either paid subscriptions or news stand sales. (MPA 2010) Magazines had strong circulation and subscription bases through most of the last century. That attracted the second major revenue source, advertising. Magazines, with beautiful color photographs, were the main distribution system for in-depth articles about recent news, politics, music, fashion, sports, celebrities, musicians, food, travel, cars, art, TV, movies and more. Their main competition was newspapers. Magazines dominated in the entertainment industries with Rolling Stone, People, Billboard, Hollywood Reporter, Daily Variety as well as tabloids. Some were niche, targeted to specific audiences – news, sports, beauty, fashion, food, homes, health, Hollywood. “Life” or “Saturday Evening Post”, featured general content and were in living rooms for half a century.

According to the Association of Magazine Media (MPA) ‘Trends and Data’, the 2000 average monthly circulation of the top 100 magazines was 249 million subscribers total. A major magazine, TV Guide had 10.3 million subscribers. (MPA 2012) However, printing hard copies, labeling them and mailing them to subscribers, or delivering them to news stands, was labor-intensive and required extensive equipment and infrastructure. Photography was done on film and required chemical processing. Postage, paper and printing equipment were major costs.

Two Companies:

1. Newsweek magazine, owned by The Washington Post Company: Newsweek magazine, along with Time, was the dominant weekly news magazine for decades. In 2000 it had advertising revenues of $150 million and circulation of 2.9 subscriptions. But by 2011 it has shrunk by half to 1.5 million subscribers and revenues of $66.8 million. (MPA 2012) January 2013 Newsweek ended print publication and became online only. (Newsweek, n.d.)

2. Life Magazine, owned by Time Inc., founded in 1883, was the dominant weekly photo journalism magazine in the U.S. from the 1920s through 1960s.It was one of the first magazines to feature color photographs and sum up main features of the week. Its circulation dropped from 10 million to 5.5 million in 1972, when it ceased weekly publication, but did monthly editions until 2000. (Time Inc.)

PEST ANALYSIS

Political

· Government Aid: The federal government took notice of the declining state of the industry. In 2009, federal, state, and local governments contributed more than “$1 billion to the new media via tax policy, postal subsidies, and legal requirements to disseminate public notices in print,” hoping to bolster the effects of declining circulation and thus advertising revenues. According to the CRS Congressional Report, Senator Benjamin Cardin introduced S.673 to help newspapers and magazines reorganize as nonprofit organizations. (Kirchhoff, 2010).

· Approval of Corporate Mergers: Mergers of magazine owners with other companies holding cable and TV properties meant magazines could be part of a media mix of revenue sources. In late 2017, Meredith Corporation, owner of newspapers and some TV stations, was approved by the Federal Trade Commission to purchase Time Inc., major magazine publisher of Time Inc., Fortune, People, Sports Illustrated and more. The financing was provided by billionaire investors and conservatives the Koch brothers. (CNN Money 2017).

Economic:

· Subscriptions: Declining circulation, a major revenue stream, is an ongoing threat to the magazine industry. Paid subscriptions had dropped from 249 million in 2000 to 229 million in 2011, with some magazines affected more than others. TV Guide had dropped almost 80% to only 2 million. (MPA 2012) That meant lost revenue because fewer readers generate less advertising. Advertising was largest source of revenue and was based on circulation; if circulation decreased, so did advertising. (eHow. How Does a Magazine Make Money. n.d.)

· Staff/Workers: Hard-copy publishing is labor-intensive. There was a recession in 2000 (the dot.com bust) and again in 2008. In each recession, there were major layoffs and companies tried to become more efficient with less staff. (NY Times, 2009). Magazine employment dropped over 10% in 2008 alone (State of the Media 2012). Many publications replaced permanent staff with freelancers, paid by the article.

Social

· Millennial Generation: According the U.S. Chamber of Commerce Foundation, the are some 80-million Millennials, born between 1982 and 2000. The oldest are now in their early 30s, with families and careers. The youngest are about to graduate from college. This large group began coming of age in the early 2000s as the internet came into its own, just in time for audio streaming and the migration of publications online. They do remember parents having magazines in their childhood. (U.S. Chamber of Commerce Foundation 2017)

· Gen Z: Generation Z, essentially preteens to age 20, have used devices since they were toddlers, mostly mobile, and before they could read. Their relationship to their mobile phones is strong and they do not distinguish between screens, like TV, computer or game consoles. Content is content and it is mobile, leaving less distinction between thoughtful magazine content, You Tube, twitter posts or social media. (U.S. Chamber of Commerce Foundation 2017)

Technological

· Internet Speeds: Readers could access magazines via the internet in the late 1990s, but slow dial-up phone modems, ranging from 33-64 kbits, limited the experience to text and a photo. A hard copy was still better. Broadband, available by about 2006, had speeds of at least 256 kbits, allowing for streaming of multiple photos and videos in an article, creating a better online experience. (CNET 2012) Magazines began adding video to photos and articles.

· Mobile Devices: Mobile devices freed users from desktops and even laptops to access magazine content anywhere on demand. Amazon introduced the Kindle in 2007, especially designed for book and article reading online (Gizmodo 2014). Apple followed with the more sophisticated iPad in 2010. The smartphone, which could access the internet, debuted in 2007. (Apple 2010). Limited data plans made accessing content by phone initially expensive, but data plan pricing has come down dramatically since 2014, making the phone the go-to device for accessing any content.

Conclusion

The forces that changed the magazine industry were the same as those affecting much of media as hard copy publishers migrated to online distribution platforms. The technological impact was felt the most as internet speeds increased to first make possible music streaming by 1998, then the transition from slow phone modems to digital modems that allowed for long-form video streaming by 2006. Apple launched first smartphone (with full web access) by 2007. Mobile devices were improved (phones, iPads, Kindles). By 2014 the cost of data plans began to come down, allowing mobile streaming of content, video and photos more economically.

While magazines, like newspapers, were migrating their content to online by the early 2000s, hard-copy sales and subscriptions declined, along with display advertising revenue. The volume of advertising proportionately was not made up in digital ads sales; staff layoffs were the result and free-lance writers were used instead. Today some respected magazines have disappeared as regular publications (Newsweek, Life, Saturday Evening Post) while niche magazines for specialized audiences have thrived online. Magazines have become online enterprises that spread their content over multiple social media platforms instead of just their own sites, but revenues have not recovered to previous highs and content piracy continues to be a threat.

References