Kalmbach, Time to Grow Up, Digitally

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I found my Model Railroader e-mail newsletter in my “in” box a few minutes ago and had the same reaction I’ve always had. But this time I’m going to say something about it here.

Kalmbach doesn’t get it. Neither does Taunton Press , publisher of my other favorite magazine, Fine Cooking. Not too long ago both publishers derived all of their revenues from advertising, subscriptions and newsstand sales. With the advent of the Web, both companies claimed the opportunity to drive subscription sales by building a wall into their respective Web sites. The Web hates walls, i.e. the Web users who want to rely on these sites for added value for the magazine. Or, as MIT’s Nicholas Negroponte argues, in the digital world “information wants to be free.”

I buy Model Railroader at my favorite hobby shop, Riverdale Station, in metro Atlanta, and Fine Cooking at the Publix near my home. That way I have a pristine copy unmutilated by the USPS and a more comfortable cash flow. Magazine publishers are under accounting rules that don’t allow them to book subscription revenue all at once. They can book revenue only incrementally as each issue covered by a subscription is actually published. But that doesn’t prevent them from earning interest off a subscription in the meantime.

There are sober and successful business models in operation these days that work because you make more money by giving away for free services that people really want. I’m working on one now. I had a four hour meeting with colleagues today to finalize structural issues. We’re creating a marketplace for a certain profession to freely exchange resources. Free! Oh, by the way, members can also sell resources for modest amounts and the enterprise collects a fee for each for-profit transaction. After all, it costs time and money to create and maintain the market place.

The Model Railroader Web site should be entirely free. It would drive more sales of the magazine, more subscriptions by people who find extensive resources on the Web site, and… it might even attract more people to the hobby! How about that, Kalmbach? You prosper by growing the business.

Now, one more thing. I have a collection of every issue of MR over the past 30 years. I can access an index and find anything I want to support a modeling project, etc. But new “arrivals” to the hobby don’t have that advantage. I recently had the opportunity to have lunch with a corporate vice president of Apple who acknowledged some hesitancy in getting into the music business. But, what it meant was the company built a global distribution platform for digital media. Kalmbach, give away the current issues of the newsletter without a wall. Build a site for back issues, searchable by topics, and charge $0.99 per download. I bet you’d increase revenues substantially and build a franchise that’s really open to the future. If you need help, Kalmbach, let me know.

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One Response to “Kalmbach, Time to Grow Up, Digitally”

  1. Riley Says:

    I think that a lot of the print publishers are having a hard time in the new era. What was it that A. H. Maslow said about giving things away? You give something away and it comes back to you in kind, and more. In any case, a lot of money has been spent on electronic media by a lot of print companies, and there is still not a resolution to the costs issue.

    Back in the old days, I used to urge the export manager of a model train manufacturer to give their starter sets away for free, on the premise that you would make it up on add-on track sales, extra cars, command control components and locomotives, along with a general stimulus to the model railroad hobby. Needless to say, he didn’t care for that idea.

    There has to be a middle ground somewhere. To a degree, Kalmbach does get it because you can buy photocopy reprints of old articles from their magazines, but you can’t get them in electronic form (such as PDF). In part, this is a realistic understanding of their typical reader; the polite term is “value-oriented consumer”. I’ll leave it to you to come up with an alternative, more colorful, term. In any case, once a PDF has been issued, they lose control of the document to a degree.

    At the same time, digital rights management (such as with music online) is a cumbersome thing. And, with Kindle and the likes, you’re only getting a license to the book; you can’t pass along the copy to a friend as you can with tree-ware.

    Going back to the last Century, I remember going to Comdex and seeing the Encyclopedia Britannica booth. It was a free standing structure, that had an internal office, with a door. The display area of the booth, for those who might be interested in the electronic version of the EB, was just a small end table with a couple of chairs and a table lamp. There was nothing on the table and there were no brochures. Behind the closed door of the office, the EB show staff was hiding from the electronic excitement of the Comdex show, a wild and wooly show. This was EB’s approach to electronic information retrieval? Hide. Now, for better or worse, Wikipedia dominates. The electronic encyclopedias on CD-Roms are largely gone.

    The market will eventually come up with an acceptable approach, but we’re not there yet.

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