To Read or Not To Read

November 24, 2007

My last blog entry referred to a groundbreaking report just issued by IBM on the future of advertising. Also issued this week was a long-awaited report from the National Endowment for the Arts (NEA), To Read or Not To Read, “the most complete and up-to-date report of the nation’s reading trends and — perhaps most important — their considerable consequences.”

This is a follow-up report to Reading at Risk, a ground-breaking study from the NEA issued in 2004. I cover this report extensively in my section on book publishing.

Quoting from the new report, “The story the data tell is simple, consistent, and alarming. Although there has been measurable progress in recent years in reading ability at the elementary school level, all progress appears to halt as children enter their teenage years. There is a general decline in reading among teenage and adult Americans. Most alarming, both reading ability and the habit of regular reading have greatly declined among college graduates.”

The two reports taken together will change your view of the future of publishing generally, and more specifically of the future of book publishing.

A few key data points:

– Nearly half of all Americans ages 18 to 24 read no books for pleasure.

– The percentage of 18- to 44-year-olds who read a book fell 7 points from 1992 to 2002.

– The percentage of 17-year-olds who read nothing at all for pleasure has doubled over a 20-year period.

– 20% of the reading time of middle and high school students is shared by TV-watching, video/computer game playing, instant messaging, e-mailing or Web surfing.

– Although nominal spending on books grew from 1985 to 2005, average annual household spending on books dropped 14% when adjusted for inflation.

The report is 100-pages long, too long to properly summarize here. It is however available to download without charge. Much of the report covers what the NEA views as the consequences in the decline in reading, including lower levels of academic achievement, decreased performance in the job market and the reduced likelihood to become active in civic and cultural life, most notably in volunteerism and voting. This is outside the direct scope of the future of publishing, although nonetheless provocative. When the most positive expression contained within a report is a prayer that officials will be moved to take action because they’re so upset by the completely bleak implications of the data, you’ve got some troubling information within. Essential reading, assuming you still can!

Note 1: There’s additional data, less alarming in a 2005 Gallup survey noting that “about half of Americans also say they have read more than five books in the past year, not much different from the number reported a decade and a half ago.”

Note 2: In 2012 Pew Internet published a survey called “Younger Americans’ Reading and Library Habits.” It notes that “high schoolers (ages 16-17) and college-aged adults (ages 18-24), along with adults in their thirties, are especially likely to have read a book in the past year, while adults ages 65 and older are the least likely to have read a book in that time span.”

The End of Advertising as We Know It

November 23, 2007

An extraordinary monograph has just been published by, of all the unlikely sources, the IBM Institute for Business Value. The End of Advertising as We Know It (PDF) is a publication that is everything you would not expect from a large corporation’s public information efforts: it’s informative, well-researched and well-written, and often provocative, all the while portraying no bias towards IBM, nor making even the slightest attempt to sell IBM services.

The four well-qualified authors base many of their observations and conclusions on a series of surveys and interviews with both consumers and a range of advertising executives (both from the agencies, and from within large corporations). The result is must-reading for anyone interested in the impact of changing technologies and media on the future of advertising.

The text is 21-pages long, so I won’t attempt an extensive recap here: just read the original. Here are several reasons why you must; mostly just direct quotations from the report:

– “Our analysis shows that the actual growth of Internet advertising has outpaced forecasts by 25 to 40 percent over the past two years.”

– “This is the first study I’ve read that intelligently challenges what the future role of advertising agencies will be, and, even more directly, asks “Will advertisers still need a traditional agency?”

– “Amateurs and semi-professionals are now creating lower-cost advertising content that is arguably as appealing to consumers as versions created by agencies.”

– “Advertising inventory is increasingly bought and sold through efficient open exchanges, bypassing traditional intermediaries.”

– “Relevancy outweighs creativity in TV commercials. The ads least likely to be skipped were well-tailored to their audience.”

– “Will consumers reject outright the concept of interruption marketing in the future?”

This is the first advertising report I’ve read that dares to ask the really tough questions about the future of advertising. As they say, you may agree or disagree, but you’re guaranteed to be challenged and provoked.

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Newspapers at a Crossroad

November 18, 2007

The New York Times announced recently that it would shift away from its partially subscriber-based model to solely an ad-based model. Here is one of the most valuable media properties in publishing changing its tune, and perhaps signaling a new tune for all newpapers. As reported in InformationToday, “All the News That’s Fit to Print” became “All the News That’s Fit to Give Away.”

The number of subscribers was growing steadily. The total readership was 787,400, of which 227,000 were $50/year paying subscribers with the rest a combination of college students with free access (89,200) and home delivery subscribers to the print edition who chose to add TimesSelect at no extra charge (471,200). The service earned $10 million annually in subscription fees.

Then on November 13th, although Rupert Murdoch has yet to take formal ownership of Dow Jones and The Wall Street Journal, he told reporters: “We are studying it and we expect to make that free, and instead of having one million, having at least 10 million-15 million in every corner of the earth.” The New York Times reported that “the Web site, one of the few news sites globally to successfully introduce a subscription model, currently has around one million subscribers, which generates about $50 million in user fees.” (Apparently an understated number, as the minimum price for an online-only subscription is $79/year, with renewals at $99/year.)

Reactions to both announcements have been mixed. There’s an emerging group of hardcore believers determibed that the future of the Internet lies solely in the success of advertising programs.

Others, like commentator Barry Ritholtz make some compelling points: “Thumb through either the print or online Journal, and you will see many high end, luxe advertisers. They are not attracted by the sheer volume of readers, but rather by the very appealing reader demographics: They pay a huge premium in ad rates to reach the highly educated, high income, tech savvy, free spending readers of the WSJ.”

Meanwhile on November 1, Tom Curley, president and CEO of The Associated Press, in a speech to the annual Knight-Bagehot Dinner, offered several trenchant observations. “The portals are running off with our best stuff, and we’re afraid or unable to make or enforce deals that drive fair value,” he remarked. And later: “We must change how we charge for content. In the financial marketplace, hot news is the most valuable of all. Hedge funds pay premiums, add spiders and link to trading programs. One-size-fits-all on the business side has to evolve…”

As Mr. Ritholtz concluded, “Mr. Murdoch has shown over the years that he is a crafty businessman with a good feel for what the reading/viewing public wants. We’ll find out soon enough what the fate of the firewalled WSJ.com will be…”

Exactly.