Major Magazines Collude! And That's a Good Thing

(MoneyWatch)  Following on the stilettos of Conde Nast's decision to kick Gourmet (and a few other magazines) to the curb, there's news that major magazine publishers are colluding on two fronts in order to get more traction out of their digital businesses:

1. Ad Age's Nat Ives reports that some of the major magazine publishers have begun exploring the creation of their own online ad network, so they can compete more effectively with existing online ad networks.
2. The New York Post's Keith Kelly (seeming to expand on an earlier story by the aforementioned Ives about magazines creating "a digital storefront"), says that publishers including Time Inc., Hearst and Conde Nast are looking at coming up with their own e-reader that can show magazines in their colorful glory, unlike that frumpy, black-and-white Kindle. (OK, that was my description of a Kindle.) They are also looking at developing software.

While you could quibble, as some commenters to the Ad Age story did, that the magazine industry should have done this a long time ago, better late than never. Both ideas hold promise, one in the short-term and one in the long-term. (Yes, the magazines are aware that they have to be aware of anti-trust laws, but collusion is such a sexy term.)

First, pooling premium online ad inventory together will, one would hope, give major magazines sufficient scale to effectively compete with ad networks, and also make a better case for the value of premium inventory. Ad networks, which notoriously cull impressions based on user data, don't really value the context in which an ad runs -- in other media, context is a considerable factor. For instance, you might reach some of your target demo on "The Glenn Beck Show" but not want your ad associated with that show. Similarly, most blue-chip advertisers would probably prefer to see their ads appear at GQ.com instead of on some guy's blog.

The e-reader idea is more complex, but has to be dealt with. Ives has reported that major magazine publishers want to set up a storefront, within iTunes, so they can have access to the data of who is buying digital versions of their stuff -- something that the music industry botched when it gave itself over to iTunes. Kelly says magazine publishers are looking at developing both hardware and software, an idea that would give them even more control over their digital futures, if they could pull it off. Admittedly, given the track record of print media in getting with the digital program, that's a big "if."

Previous coverage of the magazine industry at BNET Media:

• Michael Jackson's Death Worth $67 Million to the Magazine Biz
• 'Conde Nast Portfolio' Was Never a Great Idea
• Look Beneath the Covers; Magazines' Distribution Model Is Broken, Too