Robert Downey Jr. is standing on the cover of a magazine, and he is talking to you.
At least, he is if you've picked up the December issue of Esquire, thanks to a technology called "augmented reality." The reader holds the magazine in front of a webcam. An encoded black-and-white square communicates with software, and the actor leaps from the page with a robust holler. "Boo-yah! In your face!" Mr. Downey Jr. then gives a tour of the issue's digital extras. This, he says, is "easily the most remarkable way to experience a magazine."
Esquire's editor-in-chief, David Granger, hopes so. "Whatever digital philosophy I have, that's it - to use technology to actually get people excited about things that are in the magazine," he says. Without a print copy of Esquire and the square icons on its pages, the technology won't come to life.
Magazines are hardly leaping out at media buyers these days. The industry has been walloped by falling sales: In the first nine months of 2009, magazine ad pages in the U.S. dropped 27 per cent from the same period last year, and revenues were down 20 per cent, according to the Publishers Information Bureau. The Canadian magazine industry fared slightly better, but ad pages still dropped 21 per cent from January to September of this year, according to Nielsen LNA.
The decline in ads, which represented about 60 per cent of U.S. magazine revenues in 2007, leaves publishers more reliant on subscriptions and newsstand sales. But in a climate where many recession-weary readers would rather troll the Internet for free than curl up with yet another discretionary expense, magazines have to reckon with the digital age, and make it profitable.
Last week, five of the largest magazine publishers in the U.S. announced they were joining forces to create a "digital storefront" to make it easier for consumers to buy issues of their magazines for download onto laptop computers, smart phones and e-readers. The venture includes Condé Nast, Meredith Corp., News Corp., Time Inc. and Hearst Corp., which publishes Esquire. As part of the announcement, Time Warner's magazine Sports Illustrated released a video showing what its issue might look like on a full colour e-reader tablet, such as the one that is rumoured to be in the works at Apple.
It is the latest example of the flurry of experimentation going on in the magazine trade, as publishing companies try to figure out what works and what doesn't. At Esquire, Mr. Granger attends meetings every week to discuss the next big thing to bring in readers.
"Yeah, they're gimmicks," Mr. Granger says. "But when Vanity Fair put Demi Moore naked and pregnant on the cover, that was a gimmick as well. What gimmicks do is they cause people to come and experience your magazine. The last thing I want to do is create a magazine that nobody looks at or reads."
Magazine readership is far from dead. But circulation numbers tell a discouraging story. In the first six months of 2009, of the nearly 600 consumer magazines in U.S. and Canada to report such figures, 67 per cent saw their paid circulation drop from the same period last year, according to the Audit Bureau of Circulations.
Even the most successful magazines are struggling. Of the top 25 U.S. titles, 60 per cent were down this year. A similar proportion of top Canadian magazines saw declines.
"The market is so much more fragmented," says Kaan Yigit, a Toronto-based new-media analyst. "The Internet is this vast sea of free content. What used to be the domain of magazines is already there."
In a study just released by Mr. Yigit's company, Solutions Research Group Inc., less than one in five of the Canadians polled said they would pay for magazine content online. Still, magazines have to go digital, or risk losing their relevance. There are 78 per cent more consumer magazine websites in existence now than there were in 2005, according to Magazine Publishers of America.
"It's difficult to find any magazine publisher across North America that would say their print product is the only thing that is really part of their stable," says Claude Galipeau, senior vice-president of Rogers Digital Media, part of the media group that publishes 70 magazines, including Maclean's, Chatelaine and Flare. "It's no longer just the glossy print product à la Anna Wintour."
Rogers won't disclose the revenue from its magazine websites, which are all free to access, but it's unlikely online sales account for much, says Edward Atorino, an analyst with Benchmark Co. in New York. Some magazines have succeeded at charging for online content. But at Meredith Corp. for example, which publishes popular U.S. titles Better Homes and Gardens and Ladies' Home Journal, that revenue "pales in comparison to what they get from the magazines," he says. The industry faces the same question as most print media: Not "Can we go digital?" but "Can we make money doing it?"
Reeling in digital revenue
Her brown hair is tousled and shiny. Her bee-stung lips are in full pout. And she's wearing nothing but a leather bustier and heels. For $3 (U.S.), any presumably dapper GQ reader with an iPhone or iPod Touch can have TV Gossip Girl star Leighton Meester at his fingertips - along with the rest of the December issue of the magazine.
GQ launched its iPhone application in November, the first such attempt by publisher Condé Nast to sell a magazine through Apple Inc.'s popular device. "It's a young male readership. They're very tech-comfortable, they're very aesthetically oriented," says Sarah Chubb, president of Condé Nast Digital.
The app copies the magazine aesthetic. When the user holds the device horizontally, it displays an exact replica of the printed product to flip through - ads included. Because the digital issue is so close to the original, ABC made GQ the first consumer magazine to include digital sales in its rate base (the minimum circulation a magazine guarantees to advertisers).
Advertisers can pay extra for digital features, such as a tag the user taps to go to the product website or to watch a video ad. Out of approximately 180 ad pages in the December GQ, more than three-quarters included one of these extras.
Condé Nast's strategy is for broad digital expansion - with one notable exception. Amazon.com Inc's Kindle e-reader, with its white plastic nubbins and its inky screen, is without glamour. That is, without Glamour. That magazine will not appear on the Kindle or the Sony Reader, and neither will any Condé Nast title except the New Yorker.No Details. No Vogue. No Vanity Fair or Wired.
"There's no colour, and there's no advertising. We want to have our magazines replicated." Mr. Wallace wants every title eventually to have a digital version counted in the rate base.
The GQ app gives Condé Nast an Apple-compatible reader; the company also inked a deal with Adobe Systems Inc. to get Wired Magazine ready for tablets that run on Windows, Linux and other programs. Mr. Wallace expects such e-reader tablets to come out by late 2010.
The e-reader offers one option for making the digital magazine pay. Another is a payment site similar to what iTunes did for music that allows readers to buy individual magazines or articles.
Still, many magazines are not counting on a pay model. Instead, they have been aggressive about hiring bloggers and pushing their brands online to drive subscriptions and online advertising.
"Not only do you have to become a daily, you have to become an hourly or a minutely if you're going to get the kind of traffic that's going to make you competitive," says Sarah Fulford, editor-in-chief of Toronto Life. The magazine maintains a local focus online with restaurant listings, shopping tips and neighbourhood guides to attract "a huge amount of traffic," Ms. Fulford said, which has translated into a 23-per-cent rise in online revenue this year.
And even though most magazines say their business is depth and insight, not breaking news, gossip rags use their websites to drive juicy celebrity news between issues. When the Tiger Woods scandal broke, Us Weekly got its hands on the audio of an alleged voice mail Mr. Woods left for a mistress. The content was reported by major news organizations, which helped promote the title and encourage visits to the Us Weekly site.
Magazines are trying to integrate technology, without losing the spirit of what makes them unique - including the heavy emphasis on colour photography and design.
"I don't think any other medium has marshalled the forces of art and design to entice people into the experience and keep them there," Esquire editor David Granger says. "It's missing from any other digital experience ... There's something momentous about magazines."