edithhopegardenjournal

Single-copy magazine distribution is undergoing a remarkably unheralded transformation and it has enormous implications for both publishers and consumers.   Each year about 3 billion copies of magazines are distributed to 150,000 retail outlets within a large and complex distribution channel. This is extremely important to publishers because it produces about one quarter of circulation revenue and is used to promote subscription and introduce new titles.   In simple terms, the system operates by publishers selling copies to wholesalers and wholesalers reselling the copies to retailers. However, retailers return unsold copies to wholesalers for a full refund and wholesalers return them to publishers for a similar refund.   Because of the large number of titles, copies, and retailers involved, and the geographic scale of the country, publishers and retailers have sought to minimize their effort, create economies of scale, and reduce transaction costs.   Publishers contract with national

The markets of magazine and newspaper printing firms are undergoing significant changes, reflecting on-going transformations in the customers they serve. Some of the changes have been under way for 2 decades with traditional printing companies morphing into printing service companies offering more profitable value-added services and products.   These included high-end specialized printing capabilities and services, database printing, and wide-ranging distribution services. At the same time, the increasing number of magazine titles, accompanied by lower average press runs, pushed the companies toward higher efficiency and acquisition of presses and systems designed for lower press runs. In this environment, many printers could not effectively compete and consolidation began creating large regional players in the industry. Shorter-term trends have also played havoc with the printing industry by killing off some magazine and newspaper titles, lowering the average number of pages printed b

Netflix used to have a charmed life. This year, however, poorly thought out strategy and lurching decisions are stripping away many of its advantages and making it vulnerable to competitors. Established in 1997, its founders saw opportunities in creating an Internet-based DVD-by-mail distribution system. It was designed to be a competitor to physical video stores, making it more attractive by offering a larger selection and using a unique IT driven distribution system that combined distribution centers across the country to serve customers within 24 hours at highly attractive prices. The DVD-by-mail service became a hit, ultimately devastating the market of physical stores such as Blockbuster. By 2007 it had delivered more than 1 billion DVDs to customers. That same year it launched on-demand video streaming service so customers could also select a video and stream it to a PC (and later other platforms) for immediate viewing. The company allowed viewers a highly popular choice of physi

Newspaper publishers need to explore new methods of pricing content as they expand their digital portfolios because merely transferring the methods used in print can never bring the success publishers desire. Print newspaper publishers have traditionally tended to set prices based on production and distribution costs and not on value created. Unfortunately, this has made it impossible to possible to obtain a price premium for factors such as prestige, service, experience, and convenience. New digital operations, however, provide significant other pricing options because they differ in terms of whether they maintain the existing content bundle, whether non-payers can be excluded from use, the types of experience they deliver and how they are used. Digital media require significant new thinking because they tend to be joint and complementary products with print. These lend themselves to selling strategies of bundling and versioning that permit uses of bundle pricing, option pricing, mult

Commercial media have faced product and price challenges in 2-sided markets for more than a century, but are encountering greater difficulties in getting it right as they try to effectively monetize multi-sided markets. 2-sided and multi-sided markets are ones in which more than one set of consumers must be addressed and there is an interaction between strategies and choices for each set of customers. Prices for one group of consumers affects their consumption quantity and this, in turn, affects the prices for and consumption by the other groups. Optimal revenues can only be achieved by dealing with all groups of consumers simultaneously. Newspapers are a classic example of 2-sided platforms. The first product is the content sold to audiences and the second is access to audiences that is sold to advertisers. This has been the basis of the mass media business model since late 19th century and the strategy has been to keep circulation prices low to attract a mass audience and then to mak