Time to Tweak Your Business Model?
The recession/depression has changed everything
Vol. 5, Issue No. 8 | April 21, 2009 By Denny Hatch
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IN THE NEWS
More Layoffs at Condé Nast TodayMultiple sources tell us that 20 or more employees were laid off at Condé Nast Digital today. Designers and product management types were among the casualties. The Condé crumble continues.
—Hamilton Nolan, Gawker.com, April 1, 2009; 10,790 views and counting
On Tuesday, March 31, my daily Web prowl came across the mention of a major story about The New York Times Publisher Arthur O. Sulzberger Jr. in the upcoming May issue of Vanity Fair.
I hied over to VanityFair.com and found the story, which I downloaded into my archive. The tedious, 11,415-word piece could be compressed into a four-word sentence: “Pinch is a weenie.”
But Pinch is not the story here. While I was at it, I downloaded articles about Rush Limbaugh; hottie cover girl Gisele Bündchen; Christopher Hitchens’ piece on Lebanon; a long story about the rich, conservative and powerful who attend summer blowouts in Northern California’s Bohemian Grove; and James Walcott’s “What’s Wrong with Washington.” I also swiped some terrific illustrations. Whereupon, I went away to ponder my loot—33,339 words plus pictures, the entire worthwhile contents of the issue.
All this was free from Vanity Fair. I paid nothing—nada, zip, niente. Were any advertisers on the scene hoping for a clickthrough? I didn’t notice.
What’s more, this material was in my computer and in my head a good week and a half before the May issue of VF hit the newsstands and two weeks before subscribers received it in their mailboxes. Meanwhile, VF’s insecure publisher and editors are so desperate for affirmation and buzz that they're happy to screw paying customers, causing them to be one-upped at cocktail parties by computer geeks like me.
Which takes us back to the lede from IN THE NEWS elsewhere on this page:
Multiple sources tell us that 20 or more employees were laid off at Condé Nast Digital today.
What’s wrong with this picture?
How Much Do Up-market Magazines Pay Writers?
As I recall, Calvin Trillin once wrote that The Nation publisher Victor Navasky paid "in the high two figures" for an article. Writers for The New York Times Magazine and Vanity Fair do a bit better. From New York Times Editor Gerry Marzorati’s keynote address at the 2009 CASE Editors Forum:
A typical cover story in the Times Magazine, when you add up what we pay the author and what the expenses for travel are—and this leaves out the editing and fact-checking costs, the photography, and so on—the tally is north of $40,000, and often, if a war zone is involved, considerably more.
Takeaways to Consider
“Management Strategies for Guiding Your Company Through Turbulent Times”This was the title of an invaluable presentation by Thomas Woll, president of Cross River Consultants at the Publishing Business Conference and Expo last month—a checklist of business model tweaks for book publishers that can be applied to many other industries. The takeaways that follow are my notes from Woll’s presentation.
- Peter Drucker advised focusing on financials in turbulent times.
- Focus on assets: accounts receivable, inventory and cash. Will they cover expenses?
- Focus on key customers.
- Focus on your core business—in the case of book publishing, the backlist. This is not glamorous, but represents 60-70 percent of sales.
- Track sales and markets closely. Who’s buying what? What's turning over fast and what isn't?
- Keep inventory lean. Don’t send out everything that's ordered. Instead, send what you want to send.
- Can you license products and go to outside sales channels?
- Find partners to work with you.
- Know industry benchmarks, and try to beat them to conserve cash.
- Market on the cheap. Use publicity and PR. Don’t spend on print ads.
- Keep overhead low. Renegotiate rents and anything else you can.
- Stretch payments—say 30 days to 45 or 60 days. Even 90 days. Then stick to that schedule.
- Stay on top of accounts receivable.
- Don’t take on debt. Pay salaries, rent and taxes.
- When buying commodities, send out bid requests and cc 50 others.
- Keep staff informed.
- Get expert advice.
- Offer time- or job share, flextime, unpaid vacations.
- Be careful about cutting people, which are the most important assets. They can help you through tough times; they know your history. If you lose people now, when things pick up, you’ll have to hire new people and train them, which will impact productivity.
- Survival comes first.
- P.S. "The only bank that takes eyeballs is the eye bank."
—Bill Bonner, Agora Publishing
Web Sites Related to Today’s Edition
How Much Magazine Writers Get Paid
http://tinyurl.com/czuoot
http://tinyurl.com/dzbaab
http://gangrey.com/2035
Vanity Fair
www.vanityfair.com
The New Yorker
www.newyorker.com/
Huffington Post a Charity
http://tinyurl.com/cwvgkf
Tina Brown’s Vanity Play
http://tinyurl.com/c6z9sx
“Orchestras Need to Program a New Business Model”
http://tinyurl.com/dgzhub
Book Returns, the Dark Side of the Business
http://tinyurl.com/dfhj27
“Some Calif. Farmers See Water as a Cash Crop”
http://www.msnbc.msn.com/id/22846668
Gates Hopes to Change DOD Business Model
http://tinyurl.com/clzspy
Companies Mentioned:
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