THE business model for print media is broken and publishers should be looking to create their own equivalent of the iPod instead of misguidedly waiting for advertising spend to return, according to Maurice Levy, chief executive and chairman of Publicis Groupe.
Speaking to more than 600 delegates at the FIPP 2009 World Magazine Congress today, the head of one of the world's largest advertising and communications groups shared some sobering observations for both newspapers and magazines, which he labelled "analogue" media.
The chief executive did see a future for print media, but said it required "innovative thinking" and warned it would be necessary to "shatter common views, traditional sentiment and cliché" along the way.
"The end of the economic crisis will not be the end of the crisis for analogue media," he warned. "You are facing a deep, profound structural revolution and have to be prepared for a new world."
He urged publishers not to fall into the waiting-for-a-better-day-trap, in which the automotive sector finds itself, and realise they must adapt to survive.
"Circulation has been decreasing for years now and no stimulus package can stop this long-term trend," he said. "Moreover, who can believe, honestly, that young people, who we call the digital natives, are going to ditch their computers, their iPods, their mobile phones, and go back to print?"
Conference-goers, who had assembled from more than 50 publishing markets, were then told that, in the long term, magazines will not attract as much advertising.
Using forecasts from ZenithOptimedia, a Publicis Groupe agency, Levy said magazines' share of global ad spend is set to continue to contract right through to 2011, regardless of any financial recovery.
Publishers were also told not to expect a sudden "spurt of philanthropy" from advertisers, who are increasingly focused on digital opportunities, but to seize digital as an opportunity.
"Magazines own what is the most important thing to succeed in the world of media and particularly on the net: content," he said.
Citing Bill Gates' well-used mantra, the chief executive said content is still king, which means magazines are well-positioned to find new revenue streams online.
He noted that, although display advertising has proved disappointing for publishers and CPMs remain low, the internet is a very young media and its rules and framework are still being stabilised and finalised.
Using the music industry by way of example, he said it was possible to change free-content models into paid ones, but publishers will "need to think out of the box".
He confessed to being surprised by how little publishers take advantage of their brands and their already well-defined communities (readership).
Why, asked Levy, had magazine publishers not paved the way in user-generated content, performance-based advertising or social networking? And why could publishers not have invented the likes of Twitter and micro-blogging and the use of mobile applications?
Concluding, Levy warned there will not be one business model, no Holy Grail, no one-size fits all solution.
"Each company, each title, each media will have to find its own model," he said. "Do not stand still. Run and don't stop running, at least then your competitors will have to strive to catch you."