What is the Future of Trade Magazines?By John Honovich, Published on Mar 14, 2009
The publication industry is struggling. The recession and growth of the web is shrinking advertising revenues and increasing fears about the future of printed publications. On-line advertising such as craigslist continues to undermine the newspaper business. Similarly, we can ask what will happen to the trade magazines?
The best way to analyze this question is to understand how trade magazines make money. Manufacturers pay trade magazines to persuade buyers to consider manufacturer's products. Historically this has been very attractive to manufacturers as there were few other options (direct sales, channel sales and trade shows). Advertising and sponsorship of trade magazines was one of the most economical and inexpensive ways of reaching buyers.
Here's what I think is/will happen:
- The Internet provides many more options for manufacturers to reach buyers
- Increased alternatives (greater supply) will drop prices paid by manufacturers
- Lower prices will force some trade magazines out of business
- Remaining magazines will become larger and more global
- Magazines will offer less original content and limited social networking
Greater Supply Decreases Prices
Like in any market, the more suppliers, the lower prices will be. In the old days, trade magazines really only had to compete with other trade magazines. Today, trade magazines compete with Google, LinkedIn, doing your own press releases, etc. This is similar to the problem newspapers face with Craigslist.
Forcing Trade Magazines Out of Business
Because competition was constrained in the past, trade magazines really only competed with each other and then only within their own geographical regions. Now, with new competitors and lower prices on the web, total trade magazine revenues will decline. Becaue of this, some magazines will be forced out of the market.
Remaining Magazines Larger
I expect the remaining trade magazines to become larger. The global reach of the Internet will make that much easier as it eliminates the cost constraints of mailing publications and finding new subscribers around the world. Additionally, trade magazines will need to become larger to offset declining ad sales.
Instead of the few dozen security magazines currently, I would expect to see a fraction of them remain but of much larger size and global coverage.
Magazine Offer Less Original Content and Limited Social Networking
The three big trends in online content are:
- Lots of posts with short comments and links
- Investigative Reporting / unique analysis
- Social networking