The State of Knife Magazines & the Web, Part II

Winds a blowing

In Part I of this series, we established our traditional print knife mags are primarily using their websites to generate new subscriptions for their print mags. Then we introduced potential problems they face if they give Web users what they want, while trying to maintain their content for their print editions.

Today, we want to look at the some other winds that are blowing against these print magazines and how they will be forced to change their business models, if they are to survive in today’s Web-oriented society.

Magazines Revenue Hit Hard

As reported in the New York Times, American magazines lost ad revenue- significant revenue, 58,340 pages worth of ad pages in 2009. Between 08 & 09, magazines lost, on average, one-quarter of their ad pages.

Is this decline a function of advertisers shifting their marketing dollars elsewhere or simply a result of their cutting back due to the economy? Don’t know, but it hit magazines hard either way.

Even the famous Sports Illustrated Magazine’s Swim Suit Edition has been impacted by all this-

The 2009 swim suit edition had 1.1 million readers, which is down from 1.5 million. The magazine had 70 print ads, which is 1/3 of the ad pages it usually runs. The President of the firm is talking about how they are using “new” channels (READ: THE WEB) for this edition’s “content.”

Many magazines also lowered their per-copy subscription prices to offset the loss in circulation.

Nate Ives in AdvertisingAge Magazine February 5, 2010 edition states,

“Nearly two-thirds of 344 magazines analyzed dropped their per-copy subscription prices between 2002 and the first half of 2009, but nearly 75% of those price-choppers also saw individually paid subscriptions decline anyway, according to an analysis of Audit Bureau of Circulations reports by Jack Hanrahan, the media-agency veteran who’s now an industry consultant and publisher of the CircMatters newsletter.”

Before we simply assume, “It’s the Economy, Stupid!” We must ask- “Are we witnessing a shift in what consumers want today?”

We Develop New Habits-

There is no doubt consumers’ habits are changing. More folks get their news and information online today than ever before. And I am certain the younger generations are already accustomed to using the Web as their primary source of information & entertainment.

We are in the Instant Information Age. We want news real-time, as it’s happening. We want information when we, the consumers, want it. The Web provides for both of these demands. Waiting on a monthly magazine to come out can be frustrating if the information is time sensitive. If it is not, and the articles are simply informational, then it is a function of if that information is exclusive, or is it provided elsewhere, like on the Web.

Form, Function and Place

MRI (Mediamark Research & Intelligence) MEDIA CONSUMPTION PATHWAYS IN AN EVOLVING WORLD reports-

“Ritual and current day passion for new media aside, there are some pragmatic reasons that arose within all of the generational groups that determine a reader’s choice of online versus offline. Much of print’s strength comes from the obvious portability and practicality in the commute as well as in the bathroom. Many talked about reading in bed. On the other hand, many of our participants spend a portion of their day in front of a computer, for work, school and recreation. Grabbing a few headlines in a short break at work is far less conspicuous than reading a newspaper or magazine.”

New Technology Helps Creates New Habits

How many folks subscribe to RSS Feeds or surf the Web on their phones today? I think you’d be surprised actually and the invention of Apple’s iPhone catapulted us into mobile computing unlike any other technology gadget.

So what does all this mean? It means it is becoming the norm to access the web everywhere, so the argument of “taking a pub to the bathroom because it is portable” is not as relevant.

Don’t like to stare at a small screen?- I hear ya. Pretty hard to see that Johnny Stout custom starting at it on your blackberry or iPhone isn’t it? So, isn’t that screen-size limitation going to deter folks from reading Web-content and will end up keeping the print mags safe for a while longer? Hold on there. Not so fast-

New Generation of Web Readers

Fast forward to portable media devices, like Amazon’s Kindle. The Kindle is a handheld device for reading e-books bought from Amazon. My 14-year-old daughter loves hers.

Apple's iPad

Last month, Apple announced the iPad for mobile websufing and its screen is the size of a regular print magazine. It is not targeting power uses either, but the folks who are computer users by virtue of their phones.

That’s right. Web content is mobile now, even without the smartphones.

In fact, an article on Seeking Alpha came out today showing that the website of the New York Times, the nation’s most popular newspaper, received 75 million page views from smartphones and the iPod just in the month of December 2009 and how the iPad is better than for reading the nytimes.com. Their website is already as popular as their print edition.

And you know what? Your wrist won’t hurt cause there isn’t a mouse. It’s a touch screen instead. And curling up on the couch? No prob. These babies are highly portable.

The Hearst Corp just announced its electronic device for reading newspapers and magazines. It’s called the Skiff Reader.

If this new electronic platform is too George Jetson and you have doubts if they will ever take off? Consider this-

Magazine Publishing Biggies- Conde’ Nast, Hearst, Meredith, News Corp and Time announced in Dec. 09 a joint venture to develop a digital storefront for consumers to enjoy their favorite magazine content on portable digital devices.

“For the consumer, this digital initiative will provide access to an extraordinary selection of engaging content products, all customized for easy download on the device of their choice, including smartphones, e-readers and laptops,” explained John Squires, the venture’s interim managing director.

The digital initiatives underway by the leading publishers are staggering. The Atlantic Magazine, for example, announced in December 09, it was joining with Amazon for its magazine to be downloaded and read on the Kindle. And yet, the biggest buzz for the print media industry is the development of iPhone and iPad apps for content delivery.

Are consumers now using a new medium for content delivery because they want to or is the invention of web readers an attempt by a handful of companies to change our reading habits to online vs print?

The Skiff Web Reader- Not only highly portable, but also flexible.

The way I see it the answer doesn’t matter because in the end- we will change our habits and at some point- sooner or later- we’ll all be reading online as the norm.

Bottom-line

So, what does all this mean for our traditional print knife magazines? Your guess is as good as mine, but I say the publishing industry is changing, either out of necessity, or survival, or in anticipation of future demand. Many are now trying to get ahead of the curve as we speak.

And if you think knife pictures don’t look as good on the Web as they do in the glossy mags, then you haven’t check out SharpByCoop.com lately.

All I have to say is our knife magazines better take heed cause it is not a matter of if, only when.

The State of Knife Magazines & the Web Part I

A recent editorial by Mark Zalesky in Knife World Magazine caused me to stop and think about the state of our Knife Magazines and the Web today.

Mark writes Irons in the Fire each month and in the February 2010 edition he shares with their readers the reasons for not publishing current, or past editions, articles or features online. I would link to the editorial so you can read it for yourself, but…

One of Mark’s reasons, among many, for KW not going digital is a concern about sustaining their revenue.

“But once one factors in the cost of material, preparation, setting it up and maintaining it online….generating enough income to make the effort pay for itself is one hard row to hoe.”

OK, that’s Knife World’s position for not publishing online, so what about our other Knife Magazines? We can tell a lot about their business models by looking at how they are using their websites today.

Knife magazines and their websites

What about Blade Magazine? When you visit their website, you quickly get the impression Blade is stuck between publishing fresh content for their website and selling print magazine subscriptions. In fact, the moment you hit their site a “subscribe” window pops up and won’t go away until you click it closed, or subscribe. Clearly their business model is to use their website to sell magazine subscriptions, or CDs of back editions. To their credit the site does include some articles and a blog.

Then take Tactical Knives Magazine, part of the Tactical-Life family- Tactical Knives publishes its traditional print magazine every other month. Their website is also used to sell subscriptions or back editions but they take a different approach. Once each edition comes out, they will put up the contents. I’m not sure of the lag time between when each print edition hits the street and when they add it to their website, but why subscribe if each edition is published online?

“Stuck in the middle with you…”

The traditional print magazines are stuck-not just our knife magazines, but the whole print magazine industry. Their business model is to generate ad revenue and sell subscriptions. If they go online with their content, folks will probably quit subscribing to their print magazine. Then their circulation drops and advertisers quit running ads. On the other hand, web users today want content- substantive content. The trend is clearly going that direction. Sure some folks may want to curl up on the couch with a print edition, but more folks are comfortable reading online than ever before, and that trend will continue too (more on this in Part II).

Flip the switch?

You’d think traditional print magazines could just flip a switch and go totally online. Think of the huge cost savings- no more printing, paper, or postage. Sell online advertising and move on without a hitch. Well, it’s a bit more complicated than that. The challenge our print knife magazines face is the continual operating expenses during the time to get the new online business model up and running. And they may not be able to have the same amount of ad space in their digital magazine as they do in their print editions, which are very ad heavy.

Plus, another challenge is most content online today is FREE. While there are a few online magazines that charge for access to their articles, it is too early to see if the other content providers are going that way. A publication must have an extremely strong brand or exclusive content to pull it off right now. If the others follow, then the norm becomes for consumers to pay for content, if they don’t follow, then it will be difficult to be in the minority.

Traditional magazines simply can’t make the shift to publishing exclusively online without additional risks. At face value it appears they will have to generate additional revenue streams, like charging fees to join their forums, putting up a paywall to access their magazine or even pay-per-click articles, like the New York Times does with their archives.

My opinion is they are right dead in the middle of a paradigm shift and the answers depend on how you look at it. However, there are clearly other strong forces blowing right now- we’ll look at what they are in the second installment.

Stay tuned for Part II–

Knife News on Twitter

Cutlery News Journal is micro-blogging knife news on Twitter.

That’s right, we are tweeting. That’s Twitter talk for instant messaging knife news through this fascinating social network. I can hear many of you now, “Scott, you’re just a nerd.” Well, you know what, that is true, but guess what- I found lots of knife folks there already. And of the tens of millions of Twitterers, I couldn’t find anyone tweeting knife collector news.

Now there’s knife “stuff” being tweeted, but a lot of it is folks promoting their knife products, much like they do on facebook. But others are using Tweeter to communicate with their fan base and other interested followers. I found W. R. Case, A. G. Russell, SOG Knives, Spyderco and several other knife companies and makers there. Found iKnifeCollector there too 🙂

There are many news organizations using Twitter to send out bite-sized news with links to the full story. I say bite-sized because a message (or tweet) is limited to 140 characters, like the status updates on iKnifeCollector and facebook.

So, if you are already a Twitterer then come follow CutleryNewsJournal http://twitter.com/knifenews, but if you aren’t, then add Twitter to your radar, because you’re going to see and hear a lot about it over the next few years. Twitter is more than just a hip new fad thing; it is a major business tool. I’ll report on my knife industry and collector related findings as I go.

The modern-day evolution of cutlery

Makes good sense to me

Image credit: geekologie.com

Social Networks Spawn Anti-Knife Groups

Social Networks are the hottest thing on the web these days and they continue to go mainstream. Last week, FaceBook, the granddaddy of SN’s, reported topping 300 million users. In fact, it added 50 million users in the last 75 days, according to Inside FaceBook. Historically, the 18-25 year olds dominated FB, however, eMarketer reports the social network is seeing significant growth in the 45 to 65-year-old category. While this social phenomenon is interesting to watch, the aspect relevant to the knife community is the significant presence of the Anti-Knife Crowd.

I went exploring earlier this week and ran up on several activist anti-knife groups there…..you should have seen me- it was like I walked into a den of bears awakening from hibernation. Fortunately, I saw them before they saw me, so I ever so quietly, and quickly, back stepped out of that place. And before you start hurling barbs at me for withdrawing from a fight, let me say- their numbers are huge!

While there are dozens of groups shouting anti-knife rhetoric, it is clear, compared to the few pro-knife groups, the anti’s dominate the place. In fact, one group- STOP KNIFE CRIME houses 109,399 fans! Another over 70,000.

If you are into FaceBook and are of the pro-knife persuasion, be warned- the place is crawling with folks who stand on the other side and their numbers are many.

Cutlery News Journal Makes History!

Cutlery News Journal (CNJ) is recognized by Krause Publications’ Knives 2010– The World’s Greatest Knife Book by making their Knife Publication list.  Cutlery News Journal is the first blog to make the list. All other knife publications shown are traditional print media.

CNJ began last year and is the first independent knife collector news blog. Blogs are web media outlets published electronically. All articles are stored for easy topic search by their subscribers.

Krause Publications is a subsidiary of F + W Media, the leading enthusiast content provider and marketer of magazines, including Blade, books, conferences, and interactive media properties.

Photo credit: Krause Publications

A Message to all Knife Clubs- Where’s your clubhouse?

Knife Clubs abound. Many are city and community clubs started back 20 and 30 years ago. Some are simply fan clubs of particular brands, but either way, anytime knife folks come together across the table at the local steak house in the name of knife collecting- it is a good thing. Through these activities our hobby is strengthened.

With today’s busy lifestyles it is difficult to go to club meetings. I know, I have never attended a meeting of our local club and yet I am involved in “knife collecting” everyday. I’ve thought about it…been invited to it…but for one reason or another it hasn’t made my priorities to go. My suspicion is this is the case for the majority of collectors who are members of local clubs too.

“And yet, most all collectors spend time online participating in knife collecting.”

Knife Club Websites- little time and no money

In an effort to help maintain their sense of community and provide benefits to their members many of these local clubs have turned to the web to locate their clubhouses. Usually one of the club’s more geeky members sets up a website. Upgrading, updating and adding functionality to that site, while a desirable thing, oftentimes goes undone- it requires time and in most cases a cash investment from the club, like adding a forum or providing for its members to have their own email addresses, adding the ability for their members to upload knife pictures or a chat feature, even adding the functionality of embedding videos- these are luxury items and rarely seen on knife club websites.

How about a new FREE clubhouse?

To the knife clubs of America there is an answer. Yes, there is a place where they can have a highly functional community clubhouse- not just a static webpage- exclusively for their club.

Have the needs of knife collectors changed?

Many of us are members of different knife clubs and organizations- I am a dues-paying member in three myself. Knife organizations played a prominent role fostering our hobby for many years. They connected collectors, provided collectors a sense of belonging, provided news and organized knife shows, to name just a few examples of benefits offered to their membership.

There is an interesting editorial by Bruce Voyles in Knife Illustrated this month on the subject of knife organizations. It is entitled, “Are Knife Organizations Getting Left Behind?” and while he doesn’t delve too deeply into the subject, he does put it on the table for us to consider.

In it he recounts the history of how collector associations and clubs formed. Then he leads up to today and calls the leaders of these organizations to examine their mission and practices in order to appeal to today’s collectors.

And pertaining to these organizations meeting the needs of today’s collectors, he added-

“The future of knife organizations is only that of decline and eventual dissolution unless they discover some 21st-century relevance.”

*****

Now I must ask- “Did the needs of collectors change or were the organizations so busy working in the business of running the organization that they failed to work on the business- staying abreast of changes (technological advances/collector habits and lifestyles) that would benefit or negatively impact the organization?

Here is an interesting stat on this subject from a survey of the membership of iKnifeCollector.com, an online collector community.

In case someone wants to scoff at this stat as skewed data because “only young people use the web and online collector communities, and they aren’t members of associations anyway,” well, the average age of the iKC membership is 39.55 years old and that’s close to about half life.

If that statement is true, on the other hand, and “young people aren’t members of knife organizations anyway,” there may be a clue for these orgs to get back on track, wouldn’t you say?

If  today’s organizations do attempt to appeal to this younger collector profile- some things are gonna have to change- that much I can say.

Stats can be interpreted differently. So in fairness, the above data either means the majority of today’s collectors don’t feel the need to join these orgs (for whatever reason) or the iKnifeCollector community has successfully reached the next generation of knife collectors who have yet to join the traditional knife organizations.

This brings us back to our original question- “Have the needs of knife collectors changed?”

What do you say?

The survey data represented in the chart is from iKC’s membership as of 9.02.09.

Times change and knife companies’ sales methods must too

I’m intrigued with knife company history, as you probably know. While I wasn’t much of a student of history back in school, now that I can relate it to something, I love it!

History is not everyone’s cup of tea and I recognize that, but today we need to take a bird’s-eye view back regarding knife companies and their sales methods to see how things have changed….and continue to.

Quick Look Back

Union Cutlery Co saleman's case

In the mid to late 1800s knife companies used jobbers and traveling salesmen (drummers) to peddle their knives. Then large wholesalers and retailers came into the picture. These firms often promoted different knife brands in their catalogs- often boasting over a 1000 pages. Eventually, the traveling salesmen died out and then came the age of advertising & merchandising. Local hardware and general stores were also primary sales outlets for the knife companies.

Even today, you can still find the local general or hardware store scattered around the country. These retailers and dealers still represent, for several knife companies, their primary sales channel. Next time you travel and run through a small community stop in- you will often find several brands available, like Case, Old Timers, Buck and Gerber knives, to name a few.

Times changed

For many of the knife companies gone are the day of having thousands or tens of thousands of local sales outlets. Today Big Box Stores- the Wal-Mart, KMart, Home Depot, Target and Lowe’s- monopolize sales. These national chains have tremendous buying power too, providing them significant leverage when negotiating with the knife companies.

The speciality knife stores, like Smokey Mountain Knife Works, are the exception rather than the rule. There are very few stand alone knife stores out there today.

Big Box vs. 20,000 dealers

With fewer mom and pop stores across American many knife companies are faced with the dilemma of courting these Big Box Stores

Last week, we saw a revealing article about Buck Knives in the Wall Street Journal. C. J. Buck was interviewed about his decision to relocate their company in 2004. The bottom-line was Buck’s move was an effort to lower operating costs, and thus allowing them to maintain their pricing (in other words, they were faced with potentially needing to raise their prices due to their costs).

Mr. Buck points out- “We (had gone) from having over 20,000 small cutlery dealers like Don’s Hardware store and some chains to a few big accounts like KMart, Wal-Mart, JCPenny and Montgomery Ward. We saw tremendous volume increases… But price became a big factor and our margins began to get squeezed.”

Knife companies like Buck, who use the big accounts as a way to volume sales are directly impacted by lower margins, while the companies still relying on the small dealer network have higher overhead to facilitate thousands of accounts and these dealers are being directly impacted by customers pulling in their spending reins. Many of these stores are now struggling to stay in business.

Online Knife Sales

Today, the World Wide Web plays an important component in knife sales too. Most every small retail and hardware store at least promotes their store online. The majority of them have some aspect of e-commerce too- allowing their customers to order direct from their site. Their challenge is, however, in order to command any measurable web sales they either have to have a very loyal customer base or continued marketing. Moreover, these stores simply can’t get the page rankings to compete online against the big boys- Amazon, Wal-Mart, etc. And at times their online stores compete with their physical location.

Here’s an example- Main St. Supply Company–  a 100 year old general store. Its web site offers hundreds of products, in addition to knives from Case, Buck and Old Timer.

Then what about each knife company’s own website? I can’t think of a single knife company without an online presence today. They realize the benefits of online promotion of their firm and their knives and yet, they are faced with the decision of whether to have direct online sales from their websites or to remain loyal to their existing distribution network- their dealers and retailers- by not competing directly against them.

Interestingly, a quick review of 16 top knife companies, nine offer direct online sales. Of the seven that don’t, they point buyers to their dealers list provided from their site.

Business Model Changes?

Are the knife companies in the middle of a paradigm shift (sorry to use that worn out phrase) from the tried and true dealer network of physical locations to more web oriented sales? The majority can’t count on landing a big box account or national retailer.

Wouldn’t you be interested in seeing the total number of online knife sales compared to the total sold for the last few years?

I would guess that number is going to increase to a point over time. Does that fact, coupled with higher profit margins for direct to the pubic sales, influence knife companies to increase their direct online sales efforts? And if they do, is that move helping or hurting their dealer network? Only time will tell, but the majority of knife companies already do. The question then becomes, will they keep their dealer networks?

Closing Point to Ponder

Recently I asked one of the most popular knife companies about whether they would allow a dealer to only have an online store. The answer was “No. We require our dealers to have a physical location.” … sounds like a bit of 1980s thinking, now doesn’t it?

Photo Credits: Buck Knife – The Wall Street Journal; Main Street Supply Co.

2009 Blade Show- everything I hoped for!

2009 Blade Show

The Blade Show is the real deal.

Very few things in life live up to my expectations (sad, but true), however, the 2009 Blade Show was everything I hoped.

I could feel the excitement the minute I stepped into the huge hall. Imagine standing in an indoor football coliseum-sized room crammed full of folks buying, selling and talking knives!

The room was totally high energy. Everywhere you looked was cutlery- from knives dating back to the Viking age, to cool customs and traditional pocket knives too, but the center of attention was the tactical knives. Thousands attended along with 700 exhibitors and most everyone had good traffic, and yet it was the knife companies displaying their hottest new tacticals that saw the throngs of consumers lined up three and four deep that dominated the show.

The tactical excitment was very contagious, and this coming from an old knife guy- pun intended- the latest hi-tech designs are off the charts. Needless to say, I heard the siren’s song too and bought my first-  from Mantis Knives. It is their just released Jyro. Way too cool.

After spending almost 20 hours in the exhibition room, I was overwhelmed with the friendliness of everyone there- from the executives of the major manufacturers, to the established custom maker and other attendees. It was close to a class reunion, even though the 2009 Blade Show was my first!

I’ll be reporting over the next week about other impressions and happenings, but wanted to provide you a high-level perspective of this killer show. The folks at Blade know how to run a show. It was perfect. I appreciate them allowing me to record the show from a collector’s and industry perspective.