Fatal Move From Print to Internet

While ad sales continue to fall across many newspapers and magazines, it occurred to me that big media companies have made a fatal mistake when they tried to run both print and web version of their content simultaneously.

The internet is a source of infinite information made accessible only by those who have permitted themselves to make it accessible for free.

Newspapers and magazines have made their revenues from advertisers for over a century before the internet came along. Whether it used to be $0.10 or $0.50 for a printed newspaper, to a few dollars for a glossy magazine, media companies made their money through ads, this is a given.

When the internet came along, though it was neat to be able to share information in one common world wide web, advertising on the web was, right from the get-go, very cheap. Pennies were made based on impressions, clicks, and leads. Then, when content was reproduced on the web, the print media followed. However, the fatal mistake from print media was to reproduce their content for free.

If I were a business person, who made their fortune by offering a service for a price in person, and then offering the same service for free on the internet, of course my client base will grow on the internet. But my internet clients aren’t paying for my services, they’re getting it for free. And everybody, and I mean everybody, loves the word “free”. So it’s only logical that you would attract more people online than you would in person. By the end of if, I wouldn’t be making any money at all since my in-person clients will flock to me indirectly and get my services for free rather than in person.

Thus, my question to the big print companies such as the New York Times, The Globe and Mail, and the thousands of other newspapers…why did they make their content online free? It’s like shooting yourself in the foot. The Wall Street Journal was smart, they limit their free content and still rely on paid subscriptions to generate some revenue and it isn’t free falling into a black hole like other newspapers. Women’s Wear Daily is also able to stay alive with their subscription base model, while offering just a trickle of free content. It’s content is still linked to from numerous websites despite it being mostly off limits to casual browsers. Newspapers could have still been afloat if they would’ve offered their news for the same subscription price online as their print version. The only foreseeable problem with that is having their content reproduced by users - however, with hundreds of articles being printed each week, I doubt all of the content would be made public.

Fashion magazines however are not entirely at fault. Fashion brands have established their own sites and thus can propagate their ad campaigns from their home base without the need to pay for space in a physical world. The internet allows them to reach a much wider audience than their print (and costly) versions ever could.  Combine that with viral marketing from blogs, and cheap web space, there’s little need for fashion magazines except for the fashion gurus to cherry pick the cream of the crop of products. I suppose a temporary solution for fashion magazines is to also privatize their content online and have users pay to read their fashion experts’ opinions.

If print media companies would’ve started out with privatized paid subscriptions online, then I doubt there would’ve been such a global meltdown in the print world, perhaps saving thousands of jobs. Of course, there are hundreds of thousands of sophisticated users who can pirate content, but quality content as the big medias were known for, wouldn’t have disintegrated so quickly if they did some planning and foreshadowing.

If print work does indeed die out in the next decade (and reduced to an art form), I expect online advertising prices to go up. With no ulterior source of income, I think coveted online fashion websites will have the opportunity to break out a new standard for online advertising. Of course, online fashion magazines will have to compete for attention with the very brands who are buying their ad space.

The Bay Slashes 1,000 jobs, Looks For Olympic Saviour

Only a day after reporting that Hudson Bay Company owner, Richard Baker, was in hot waters with his flailing retail purchases, The Bay announced a cut back of 1,000 jobs. This cut is part of a restructuring The Bay is undergoing, claiming it will refocus the department store. I’m not quite sure how you can offer better service if department staff are taking the axe though.

Today, the Globe and Mail reports that The Bay is relying heavily on the Vancouver 2010 Olympic Games to boost sales. The Bay is the official company  who will be dressing the Canadian Olympic team and will reveal their corporate logo for the Winter Games next week.

Exactly how patriotic will Canadians be about the Winter Games of 2010? The Bay had released official Olympic products for the Beijing Games last year, and failed to make any significant retail waves. Jeff Sherman, HBC’s CEO, acknowledged the shortcomings of last year’s fashion flop and promised to “not make those mistakes again.” They’re apparently working on “sought-after designs” that should have better retail longevity.

What HBC really hopes to accomplish is to reproduce Roots’ Olympic success. According to the Globe and Mail back in Oct:

The Olympics work had helped put Roots on the world map after its poor boy cap created a sensation - and a selling frenzy - at the 1998 Nagano Winter Games.

Since then, Roots had been the official outfitter for the U.S. Olympic team until last year when famed American designer Ralph Lauren designed the team’s jackets. The collaboration also proved fruitful as sales were still strong on the retail floor even after the Beijing Games were done.

Were HBC have made a collaboration with a Canadian fashion brands like Pink Tartan or DSquared, as Adidas made with Stella McCartney, that could help boost visibility for The Bay with their exclusive Olympic line.

Last year’s fashion flop - Who would actually wear these?

Another problem are the numerous licensees who are developing other Olympic products as listed by Vancouver Sun in February 2008. The list of products also include clothing apparel, which could place it in direct competition with The Bay’s designs. Although, Olympic Canadian fashion doesn’t really whip up my style senses into a frenzy.

With the news of the global recession, the implementation of Lord & Taylor into the Canadian market has been scraped for now. It will be a slow and painful process for Richard Baker to turn around two department store chains in 2 different countries.

Image credits: HBC, official Vancouver2010.com muk muk plush

Made in Canada, Tide’s Anti-Aging Detergent, Simons Pulls Catalogue

I had originally dismissed The Globe and Mail for not reporting any worthy news on fashion other than trends, but I realize that my mistake was that I was looking in the wrong section. If you want some significant news on fashion that excludes trends and top 10 must-haves, you’ll have to venture over to the business section of most newspapers. And there you can find some pretty good articles. Apologies to the Globe and Mail, now I can’t get enough of your Report on Business section!

Which brings me to these very interesting articles that popped up in the last couple of days.

Made in Canada - An in depth look at the advantages and some tips on how to keep a Canadian business going with some examples of some companies who have learned harsh lessons throughout the year. This also highlights that despite China and India’s cheap price, in the long run, it could become more costly to make things overseas as wages will increase over time.

Procter & Gamble links laundry to fashion - Tide, owned by P&G, has come up with a new type of laundry detergent that could be called as the “anti-aging solution” for clothing. Sure it’d be great to have a detergent that didn’t destroy your clothes…but how about buying clothes made of reliable, high quality material instead of the cheap kind if you want them to last?

Sick of Slow Service, Customers Walk -This is an ever growing problem in the retail business as Canadian consumers are fed up with the slow service being offered to them. And here’s another contributing factor of the ailing department store industry:

Department stores lose the greatest amount of business because of frustrated customers leaving empty-handed, with 78 per cent of survey respondents indicating that they have left a department store because of long waiting times.

It looks to me that HBC will really have to put customer service as a priority if they want to lure customers back. It will also need to significantly exceed the kind of service you get at Holt Renfrew (which is to say discriminatory and snooty).

The Gazette (shocking, I know)

Catalogue Yanked -La Maison Simons has decided to pull it’s Fall catalogue from the shelves after receiving numerous complaints of using too thin models on its pages. Although it’s been argued that images of very thin models do not cause anorexia, it has been proven to be one of the triggers that can lead to eating disorders. Montreal has especially been aware of the image it projects to its consumers in the fashion industry and Montreal Fashion Week fully supports the use of not-so thin models. However, from my observations when I’ve been to MFW, some of those girls seemed too thin in my opinion. But kudos to Simons for taking action.