The skeptics chant that the future of publishing is bleak and publishers are not making money. Their comments are loud, vocal and sadly lacking in fact, according to Greg Satell of the Harvard Business Review.
“These sentiments are common, but they are not based in fact. In truth, publishing is flourishing, creating massive new fortunes for entrepreneurs and more choices for consumers. It’s also attracting large investments by established companies and venture capitalists. Though not everyone prospers, there has never been a better time for publishers,” Satell writes.
He goes on to elucidate with examples of digital publishing that has succeeded wildly, citing Huffington Post and Buzzfeed among other. At this point we might expect the punch line to be that yes, digital publishers are thriving, but print is another story, right?
Not so, claims Satell, who notes that magazine publishers are showing profits at about the same rate as most big businesses.
“It’s true that magazines in the U.S. were more profitable in the pre-digital age because of the fragmented broadcasting market, but they do make money today,” Satell explains. “Magazine consultant Jay McGill estimates that profit margins in the industry have dropped off from a stellar 20–25% to a more earthly, but still healthy, range of 12–15%, which is pretty close to the average for the S&P 500.”
He cites publishing giant Hearst’s record-setting September as plenty of evidence that print publishers are thriving.
“The reason why many publishing businesses continue to make money is simple: they’re selling a product that people want and need. As long as people want to be informed, entertained, and inspired, there will be profitable opportunities in publishing,” Satell notes. Still, he does concede that it takes a new mind set in this time of rapid change.
“Yes, some old-line publishers are faltering and clearly there are challenges ahead, but that can be said about any incumbent industry. We live in an age of disruption, and in order to compete, everyone must adapt. You simply can’t run a business—any business—the way you did 10 or 20 years ago,” says Satell.
The bottom line is that publishers can and do make a good profit when probably managed, and we agree with Satell that “there is no intrinsic problem with publishing. There is still enormous value in uncovering stories and telling them well. That publishers need to innovate their business models just puts them in the same place as every other industry.”