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MAGAZINE PUBLISHING FROM PRINT TO DIGITAL:MAGAZINE PUBLISHING FROM PRINT TO DIGITAL: STRATEGY FOR AN INDUSTRY IN TRANSITION

Thomas R TrolandTRT AdvisoryTRT Advisory

Session #3O t b 20 2014October 20, 2014

US DIGITAL MARKETING FORECAST

2014 20192014-2019

TRANSFORMING MAGAZINE PUBLISHING IN CHINA

“TECHNOLOGY is miraculous because it allows us to do morewith less, ratcheting up our fundamental capabilities to a higher level.”

--Peter Thiel

Founder of PayPal

TRANSFORMING MAGAZINE PUBLISHING IN CHINA3

“Digital will soon greach half of all time spent on media [in China], up from just a third of time spent two years ago.”

--Zenith Optimedia September 2014


DEFINING THE PROBLEM OF PRINT

3. BUSINESS MODELSARE CHALLENGED AND

CHANGEDCHANGED

2. CONSUMERSADOPT AND

ADJUST

1. DIGITALREPLACESPHYSICAL


1 DIGITAL REPLACES PHYSICAL1. DIGITAL REPLACES PHYSICAL


2 CONSUMERS ADOPT AND ADJUST2. CONSUMERS ADOPT AND ADJUST

Source: Market RaDaR Analysis Forrester Research 2014http://blogs.forrester.com/xiaofeng_wang/14-05-09-introduce the marketing radar to china


_ _ g_ _ _

3 PRINT BUSINESS MODEL IS CHALLENGED3. PRINT BUSINESS MODEL IS CHALLENGED

•Creative•Manufacturing

•Distribution•Management

SubscriptionsSingle Copies

Ad Sales


DIGITAL’S GROWING DOMINANCE: NEARLY HALF OF CONTENT SPENDINGWILL BE FOR DIGITAL PRODUCTS BY 2017


WHAT MAKES A STRONG MAGAZINES MARKET?

URBAN

MOBILEAFFLUENT

& ASPIRING


CHINA GROWS IN URBAN POPULATIONCHINA GROWS IN URBAN POPULATION


AFFLUENCE RISING WITH URBAN GROWTHAFFLUENCE RISING WITH URBAN GROWTH

# / l 2013


Source: Women Power Money #% / July 2013Ipsos CT / Hearst Magazines / Fleisjman Hillard

CHINA WORLD’S MOST MOBILE POPULATIONCHINA: WORLD’S MOST MOBILE POPULATION


UTUT


CHINA ADOPTS AND ADJUSTS TO DIGITAL

TECHNOLOGY AT AVERY FAST PACETECHNOLOGY AT AVERY FAST PACE


MOBILE DEVICES PROLIFERATE IN CHINAMOBILE DEVICES PROLIFERATE IN CHINA

95%95%Own a Cellphone

37%Own a SmartPhoneOwn a SmartPhone

69% Age 18-29

Own a SmartPhone

h b


Source: Pew Research Center, February 2014

16

TRADITIONAL MEDIA ARE LOSING ATTENTIONTRADITIONAL MEDIA ARE LOSING ATTENTION


ADVERTISERS MOVE TO DIGITALADVERTISERS MOVE TO DIGITAL400,000

250 000

300,000

350,000

s) InternetSeptember 2014* Forecast

150 000

200,000

250,000

RM

B (M

illio

ns

te et

Outdoor

Cinema

Radio

50,000

100,000

150,000R Television

Magazines

Newspapers

-2005 2006 2007 2008 2009 2010 2011 2012 2013 2014* 2015* 2016*

Advertising Expenditures in China by Medium 2005-2016


“INEVITABLE SHIFT”INEVITABLE SHIFT


MCLUHAN’S LAW OF MEDIA DISRUPTIONMCLUHAN’S LAW OF MEDIA DISRUPTION

“A new medium is never an addition to an old one,

nor does it leave the oldnor does it leave the old one in peace. It never

ceases to oppress the older media until it finds

new shapes and positions for them.”

– Marshall McLuhan, 1964


THE MAGAZINE MODEL (SIMPLIFIED)THE MAGAZINE MODEL (SIMPLIFIED)

Create Manufacture Distribute


TEN BIGGEST US MAGAZINES: DEGREE OF

TRANSITION TO DIGITAL PLATFORMSTRANSITION TO DIGITAL PLATFORMS

90%

100%

60%

70%

80%

30%

40%

50%Video

Mobile Web

Web / Desktop - Laptop

0%

10%

20%p p p

Print / Digital EditionsSource: AMM 360°September 2014

Adult Readers of Magazine Brands by Platform


BETTER HOMES AND GARDENS: THE BUSINESS

OF CONSUMER COMMITMENT SUPPORTOF CONSUMER COMMITMENT SUPPORT

7 6 million7.6 million circulation

39 million adult readers


BH&G BRANDING MODELBH&G: BRANDING MODEL


TOP US MAGAZINE BRANDS FOR ACCESS BY

DIGITAL MEDIADIGITAL MEDIA85.4% 83.6% 82.8% 81.7% 81.5%

76.9%80%

90%

67.7%

61.9%59.4% 57.4% 56.6%

52.6% 50.5%46.3% 45.9%50%

60%

70%

20%

30%

40%

0%

10%

Share of Total Readers Accessing Brand on Digital Platforms


Source: AMM 360°September 2014

A COMPANY BUILDING ITS DIGITAL FUTUREA COMPANY BUILDING ITS DIGITAL FUTURE


BETTER HOMES AND GARDENS AND

ALLRECIPES CONTRAST IN MODELSALLRECIPES: CONTRAST IN MODELS

90%

100%

70%

80%

90%

40%

50%

60%

(000

) Video

Mobile Web

Web / Desktop - Laptop

10%

20%

30%

p p p

Print / Digital Editions

Source: AMM 360°September 2014

0%

10%

BH&G Allrecipes

Adult Readers of Magazine Brands by Platform


A MAGAZINE FOR THE DIGITAL ERAA MAGAZINE FOR THE DIGITAL ERA

Reader Contributors

900 00017 Million

b l

900,000Circulation

Mobile Users


STRATEGY FOR MAGAZINES IN THE DIGITAL

DOMINANT MEDIAWORLDDOMINANT MEDIAWORLD

1. Know the job the customer is “hiring” you to do2. See your magazine as a brand not a producty g p3. Extend and Experiment4 Be in love with what you do4. Be in love with what you do5. Don’t be in love with how you do it


THANKYOU!

Thomas R TrolandTRT Advisory

Tttroland@verizon [email protected]

20 October 2014

Getting the reliable insight you need.UNDERSTANDING MEDIA IN CHINA PREVIEWUNDERSTANDING MEDIA IN CHINA: PREVIEW

Datamonitor

EricssonWe Are Social

Boston Consulting Group

McKinsey

Zenith Optimedia

NielsenIpsos

Optimedia


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