Bloomberg released an interesting video on Monday, Oct. 18. Margaret Brennan, of Bloomberg, interviewed Reed Philips, co-founder of the media investment bank DeSilva & Phillips LLC, about how the magazine industry has been changing.
The magazine industry “has been in an epic downturn for the past 18 months,” said Phillips, but “magazines are not dead.” As has been the common trend in the industry, magazines are searching for new mediums in which to stay afloat.
“Magazines are embracing technology,” said Phillips. Popular new technologies like the Apple iPad and Amazon’s Kindle are changing the way consumers get their news.
The magazine industry has found that “readers will pay more for iPad content than for print,” said Phillips. Readers seem to prefer reading articles over an iPad or Kindle than in person off a newsstand because they offer things that print media cannot.
Apple released the iPad in April 2010 and it is marketed specifically for audio and visual media. The Kindle was released by Amazon in November 2007 and it is a wireless reading device. The magazine industry has found that it is in its best interest to harness these technologies.
“The magazine industry has developed a coalition of the top publishers,” emphasized Phillips. These are the companies that are growing and changing to adapt to the new media world.
This is not to say that through this embracing of technology, the magazine industry is not struggling. Revenue has been down as much as 30 percent, said Phillips, and there has been a decline in the value of media properties. TV Guide, BusinessWeek and Newsweek, once worth over $2 billion, have all sold for a combined $10 million in the past two years.
Yet this decline was “an industry wake-up call,” said Phillips. There have been changes in leadership along with adapting to new technology to survive this struggling industry. It is becoming obvious that technology is the root to the survival of the magazine industry.