Partnerships can help publishers ride information highway: CARF

While the information highway means magazines can expand their modes of delivery, there is not a lot of money to be made by publishers right now.The most attractive new media opportunities for publishers - floppy disk programs, cd-rom and CD-Interactive (cd-i),...

While the information highway means magazines can expand their modes of delivery, there is not a lot of money to be made by publishers right now.

The most attractive new media opportunities for publishers – floppy disk programs, cd-rom and CD-Interactive (cd-i), and on-line services – are still not profitable.

Maureen Cavan, vice-president, business development for Telemedia Publishing of Toronto, says partnerships could be the answer.

Cavan, speaking in Toronto recently at a seminar sponsored by the Canadian Advertising Research Foundation, pointed to a recent Telemedia partnership with KAO-Didak, the maker of kao floppy disks.

Telemedia’s Canadian Living magazine distributed 25,000 demo disks of Canadian Living Cooks, recipe management software, along with a questionnaire in kao disk boxes, 80% of which are bought by women.

2,000 responses

The company got 2,000 responses, and, because it was too expensive to go to market alone, formed another marketing partnership with a small software company called Foodware.

Today, seven Canadian Living cookbooks-on-disk are now offered individually or as part of the cookbook collection on the Foodware program.

Cavan says while some u.s. publications such as Time, Business Week and Better Homes & Gardens are putting back issues or annual issues on compact disk, production of a good cd-rom product takes about 18 months to develop and a minimum of $250,000 to produce.

While online services could be one of the largest industries of the future, at present, there is still little advertising opportunity.

Advertising will be needed for such a venture to be profitable because, as Cavan points out, using the u.s. as an example, magazine royalties from online services are about 15% of the consumer rate.

On average, the usage fee is $3.50 an hour, netting the publisher $0.525 per hour for each user.

Revenue rate

That translates to 33,000 user hours per issue for a magazine to recoup revenue of $17,325.

Cavan does not expect full introduction of the information highway for a couple of decades, 2007 at the earliest, nor the demise of the publishing industry.

‘If we’ve learned anything from the communications history of the 20th century, it’s that new media does not kill old media, and that consumers have been taught to expect `free’ or low-cost access to in-home media that has had the real bills paid by advertisers,’ she said. PS