The writing's on the wall for 'dead-tree' publishers

Computer magazines were first to go. But no sector is safe from online competition
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The Independent Online

The image on the computer screen asked: "Have you ever clicked your mouse right HERE? YOU WILL," it insisted. And so the first online advert appeared in October 1994, when there were just two million computers connected to the network.

The image on the computer screen asked: "Have you ever clicked your mouse right HERE? YOU WILL," it insisted. And so the first online advert appeared in October 1994, when there were just two million computers connected to the network.

It seemed so innocent. But the new advertising medium quickly wreaked havoc among certain sectors of the print market - specifically among the magazines aimed at people most likely to use computers. Those surviving are slimmer now than a decade ago - and quite a few have closed.

But that was only the beginning. In the next 10 years of online advertising, other sectors - particularly music, financial, entertainment and listings magazines - have looked threatened, as a new generation of readers have come along and decided they can find it more easily online than in "dead-tree" format.

One of the casualties in the UK was PC Direct, which used to have hundreds of pages of advertising from companies offering mail-order computers. "The ads began vanishing overnight," recalls one former staffer. "It got thinner and then it was gone." The advertisers had realised that they could reach their audience online - and moved their spending there.

Magazine publishers watched helplessly as classified advertising, especially recruitment, vanished into the ether, because computer-savvy readers realised they could find jobs or products online, and sites sprang up to satisfy them. Pages were dropped. And then whole magazines were dropped. Computer magazines were obvious first targets, because their readers were sure to be the "early adopters" of any new technology. But the same process lies in wait for other sectors, says Fru Hazlitt, managing director of Yahoo! UK, the search engine and news portal.

She points out it's easy to forget how rapidly the internet grew. By the end of 1996, there were 50 million connections - the number traditionally used to define a "mass market". In three years, the internet had reached as many people as television had in 15 and radio 37. "We haven't seen anything yet," she says. "The kids who have grown up familiar with the internet aren't in business yet. But already they wouldn't think of reading a magazine or ringing up a travel agent."

Recent statistics show that the early growth is continuing apace. More than half the UK population is online, and on an average day at least two-thirds of them use the net. And among 16 to 34 year olds - the advertisers' holy grail - 78 per cent are online and half access the internet each day.

For that reason, Ms Hazlitt thinks that music, entertainment and listings are the most likely publishing sectors to face problems in the next few years, because those are the youth-oriented sectors. And financial publications could also be in line for an online Waterloo, she suggests.

"Kids these days are used to getting stuff directly from the net," Ms Hazlitt says. "They don't see why older people bother struggling around going out for stuff. If they want to watch a film trailer, they can get it on the net. Cinema listings? Restaurants? On the net or on their phone."

Finance magazines also suffer from the problem of inflexibility, she suggests. "Online, you can get interactive mortgage quotes; real-time stock quotes. Why would you bother looking at a stock price in a paper? Computer games too - those magazines must be facing some threat because there are millions of sites where you can get cheats, tips and news."

Certainly that was the instinct of Rob Fahey, who, until about three years ago, was deputy editor on CTW magazine, one of the UK games industry's biggest trade publications. "Ad income [on the print magazine] was plummeting because people were going online for their news," he says. "And they were telling us, 'Your news is five days old'. So I thought if you can't beat them..."

His website, gamesindustry.biz, runs news for the authors and publishers of computer games, and is funded by recruitment and display advertising. "We don't have the overheads of print, which would be £40,000 to print the magazine, and postage, plus the fact that, though it was subscription, we had to give complimentary subscriptions to a lot of people in the trade," Mr Fahey explains. Additionally, he can put a news story up within minutes of writing it - although he admits a nostalgia for the days when he could take three days to investigate a story in depth. The site is profitable, he says.

For advertisers, too, online offers advantages that print cannot: precise tracking of adverts, including which stories they are linked to. Ms Hazlitt says: "It's so much more precise than magazines, where you get biannual ABC [circulation] figures that are out of date before you see them."

Patrick Barwise, the professor of management and marketing at London Business School, says that long-term trends all favour the internet - and that older media looks sure to struggle. "Old media never die," he said, "but there's a long-term trend heading away from traditional media to the internet. It's particularly noticeable in the US and UK [where internet adoption has been faster] but slower in Japan and France. Internet advertising is growing very fast, although it's still only a small percentage of overall advertising spend.

"I'm surprised that classified advertising hasn't shifted online faster than it has. If I owned a print medium with a good lot of ads, I would go bimedia [print and internet] and offer bundles on both to any advertiser."

Of course, many magazines already do that: it's impossible to find one that hasn't got its own website. But some are simple advertising husks, without any of the content that younger consumers demand when online. And while older readers might not worry too much that there aren't any forums to go with the magazine they're reading, younger readers will - and may turn to the magazine which does offer them.

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