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October 30, 2014

Publishing News

The Atlantic Partners with 'PBS NewsHour'
The Atlantic is partnering with PBS’ NewsHour to produce broadcast adaptation’s of the magazine’s work. The series began last night, with NewsHour co-anchor Judy Woodruff and The Atlantic’s Hanna Rosindiscussing Rosin’s cover story on teens and sexting. “We’re excited to see our stories brought to broadcast, and honored to be working with the NewsHour to make it happen,” said James Bennet, The Atlantic’s president and editor-in-chief. “No one in the business cares more about journalistic integrity and depth.” The Atlantic and PBS deal will last for the next six months.

Apple's Cook Comes Out as Gay in Businessweek...And Other Buzz From Current Magazine Issues
Apple CEO Tim Cook has come out as gay in an essay in Bloomberg BusinessWeek (Fishbowl NY item)...Daphne Oz, 28--daughter of Dr. Oz and co-host of ABC's "The Chew"--is the cover and profile subject in Fitness magazine's current issue (Access Hollywood excerpts the article)...Actress Julianne Moore is the cover and profile subject in More's November issue (NY Daily News excerpts the article)...Fishbowl NY asks which cover is better: Details' featuring Brad Pitt, or Billboard's featuring Usher...a National Geographic Instagram video shows why sherpas climb Mount Everest (Adweek).
MediaBistro Fishbowl NY (Bloomberg Businessweek)
Access Hollywood (Fitness magazine)
NY Daily News (More magazine)
MediaBistro Fishbowl NY (Details vs. Billboard covers)
Adweek (Nat Geo Instagram video)

Renowned Publishing Agent Andrew Wylie Backs Hachette in Dispute Vs. 'ISIS-Like' Amazon
In a keynote address at Toronto’s International Festival of Authors, renowned agent Andrew Wylie praised Hachette’s decision to battle Amazon and encouraged publishers to “stand firm” in their negotiations with the giant e-retailer. Wylie suggested it was a mistake for publishers to have ever agreed to give Amazon--which he accused of having “taken the business and distorted it radically” --30% of digital profits , as the music industry had given Apple. He noted that John Eastman, the lawyer who made a favorable Apple deal for the Beatles, said that publishers could in theory have offered Amazon a zero cut, because without their content, Amazon's devices are "useless pieces of high-grade plastic." However, at this point, Wylie warned that with Amazon finally under some pressure to “show the prospect of making a profit," it might want that 30% to become 50%. “The publishing industry up until now has cowered and whined and moaned and groaned and given Amazon pretty much everything they want," he said. "Now, I think that’s going to stop…Hachette to their great credit drew a line in the sand.” The deal that Simon & Schuster made with Amazon, which “no one is allowed to know anything about…basically is back to the agency model, and it’s pretty good for authors,” he said. Wylie added that he thinks there is a strong chance that in the end “Amazon will be told you either do business on our terms, or we are going to develop other channels of distribution.” He acknowledged that developing other channels might be costly for publishers, but “the brutality...of Amazon’s negotiating tactics” has made the necessity clear. “If you lose 25% of your sales in developing that other channel, the system gets restored to health after a period of time,” he said (adding with a cutting aside, "as far as I’m concerned, there are at least 25% too many books being published"). As long as publishers “don’t blink” at this crucial time, Wylie asserted, they will return to a situation in which the extra margin they make from digital publishing can continue to sustain their less profitable print publishing. “I believe with the restored health of the publishing industry and having some sense of where this sort of ISIS-like distribution channel, Amazon, is going to be buried and in which plot of sand they will be stuck, [publishers] will be able to raise the author’s digital royalty to 40% or 50%,” he said. “Writers will begin to make enough money to live.”

Amazon’s Impact on Publishing? It’s Complicated
A panel called “Will Amazon Lead Us to the Golden Age of Books?” at the New America Foundation in New York City offered an encompassing picture of the publishing industry’s conflicted--perhaps even tortured--responses to Amazon. Sarah McNally, owner of McNally Jackson bookstore in SoHo, said, “I don’t know what impact Amazon has had on my store.” This comment came, though, after she criticized the retailer and vowed to never to shop there. Her store is celebrating its 10th anniversary with plans to open another location. Despite her feelings about Amazon, McNally acknowledged that when she opened her store, “B&N had already crippled indie bookstores.” And despite her animosity towards Amazon, McNally acknowledged something other indie bookstore owners have also conceded: “I don’t compete with Amazon. People buy as many books as they think they need. Because of the nature of the book business, it’s not a zero sum game.” Asked by moderator Nick Thompson, editor of, why publishers fear Amazon, Manoush Zomorodi, host of NPR’s New Tech City (and an author who self-published a book on Amazon), said that “people are torn over Amazon,” but added: "Publishers are right to fear Amazon." Howey, a supporter of Amazon and a former bookseller for B&N, said it's not surprising that so many people who work in book publishing express animosity toward Amazon. "Publishers have always hated their biggest account," he noted. "They hated B&N when I worked there.” Challenging the notion that Amazon is “crushing” indie bookstores, he cited an “8% growth” in the number of indie stores in recent years, and reminded the audience that “all retailers have been hurt by online retailers" but that "the big book chains seem to be closing fastest.”

Kraft Rejects 75%-85% of Digital Ad Impressions Due to Quality Concerns
Concerns over ad fraud, viewability and overall inventory murkiness are causing Kraft to reject up to 85% of all impressions offered via real-time ad marketplaces, Kraft's Julie Fleischer said at the Ad Age Data Conference in New York. The massive number reveals that talk of digital advertising supply-chain corruption is indeed leading to action among top brands. Kraft, one of Ad Age's 100 leading national advertisers, spent $35.9M on digital advertising in 2013, according to Ad Age Datacenter. "That 75% to 85% is either deemed to be fraudulent, unsafe or non-viewable or unknown,"  Fleischer, the company's director of data, content and media, said, referring to the rejected impressions. "Think about what this means for us as an industry. When we're rejecting 75% to 85% of the impressions available, that's a problem." Fleischer said Kraft only dug into this analysis last month, and called the number "remarkable" in a video interview embedded in this article. She also discussed whether the rejection of so much inventory leads to higher prices.
Ad Age 

Guardian Exec: Print Newspapers' Decline Driven by Advertising Shift, Not Circulation Problems
Aron Pilhofer, The Guardian's new executive editor for digital (previously in digital at the NY Times), asserts that the decline of print editions of newspapers is inevitable, and newspapers need to make the shift to all digital quickly. "Circulation isn't the problem, the NY Times has never had a circulation problem, circulation there is as good as it's ever been. It's ad revenues that are the problem, that's the big hole they are trying to fill." The danger, he says, is that ad revenue "isn't going to just decline gradually"--he believes it will happen much more abruptly than some in the industry expect. However, he also points out that newspapers are transforming themselves to succeed in the digital arena. Audience fragmentation, accelerated by social media, provides both a challenge and an opportunity for newspapers who once thought of their audience as one solid block of readers, largely because they had little data on what different kinds of readers actually wanted from their newspaper, he said. He has established centralized teams to help the whole operation handle data, visuals, video and interactive storytelling, and social and audience teams to help understand who is interested in different topics and how best to reach them. "Instead of doing things the way we do it now, which is some variation of publish and pray, we want to be a little more data driven about the way we do pretty much everything from structure of the newsroom to content itself," he said. "There's an enormous amount of data. It's just there's nobody in the newsrooms really dedicated to just focusing on editorial questions...The goal of this is to find ways of being a lot smarter about how we publish, when we publish, what we publish, the formats we publish, what tools we use. So we may want to do something creative online around a particular event, and looking at the audience we are trying to target, it might dictate a completely different strategy than it would an investigative piece."

Opinion: Some Publishers Tiring of the App Game
Thanks to constantly changing software, many developers spend an inordinate amount of time fixing perfectly good apps, broken by software updates--and some publishers are starting to question the whole ecosystem, writes D.B. Hebbard. “We waste more time fixing something that wasn’t broken in the first place,” one digital publishing professional told Hebbard this week (wanting to stay anonymous in order to not incur the wrath of Apple). “Worse, readers blame us when suddenly the app doesn’t work. We didn’t do anything, Apple did!” Moreover, "recent circulation reports seem to suggest that both newspapers and magazines are starting to see their digital edition sales fall--not stop growing, actually decrease," Hebbard writes. "There are many reasons for this--the poor state of the Newsstand, the lack of promotion of both digital editions and the Newsstand by Apple, the failure of the other platforms to provide a good sales environment--but buggy apps are right at the top of the list." He notes that Sports Illustrated, which was among the most enthusiastic early developers for the iPad, is currently still awaiting its first iOS 8 update. "Why hasn’t SI’s app been updated? Has the magazine lost interest in digital editions? If so, they can’t be blamed," he writes. "Four years after the release of the original iPad, SI’s digital subscriptions are at 21,561, amounting to less than 1% of the magazine’s total circulation (if you add in single copy sales of digital editions, it adds up to 1%)." This is common, he adds. "Fortune magazine, another Time Inc. title, has only a tad more than 11K in digital subscribers, according to their June publisher’s statement. Combined with their digital single copy sales, their total digital circulation is at about 2%. Luckily, the modest growth in digital has been enough to maintain the magazine’s rate base of 830,000. Today, the app for Fortune received its first update since the release of iOS 8. The app, which uses the Adobe DPS, was suddenly not allowing issue downloads. 'What happened guys?' one reader wrote in an iTunes review...What happened, of course, was the release of iOS 8."

Opinion: 'The Karaoke State of Native Advertising'
Hearst Magazines Digital Media VP Lee Sosin writes: "Unfortunately, karaoke is the state of much native advertising today. It’s no wonder. Ask someone to define native, and you’ll get the usual talk about advertising or content that is designed to LOOK like other content on the page. Focusing on form misses the point. It also misses the audience...[Advertisers] choose to partner with media brands because of the relationship those brands have with a target audience...The power of these relationships is crucial to native advertising -- and yet surprisingly, marketers sometimes fight to dilute the very thing that they valued in the first place. I’m referencing the frequent scenario where advertisers and agencies try to override the very editorial experts that they’ve partnered with on a native content project. They rewrite headlines, force language and imagery; add in cumbersome product-speak, and more. That’s OK, some will argue, because the advertiser is the one footing the bill. True, but it is the media company who is held responsible for the performance of the content. When voice is lost, the audience can tell." He also argues that: "Many publishers are also to blame. They create separate teams and separate processes for branded content, assuring their clients that separate is somehow equal. Without bringing that content back through the editorial process, it loses the site’s authentic voice. Consumers expect a single level of quality, a single voice from a media brand...Voice matters. For native advertising to work well, it can’t just look like the rest of the content on the page. It has to feel like it, too. This requires a deeper partnership between the advertiser and media partner, and it requires a deeper trust. And trust is exactly why media brands matter."

Exec Who Built Amazon's Ad Sales Organization to Exit
Amazon's VP of global advertising sales, Lisa Utzschneider, who is largely responsible for building Amazon's ad sales organization into an almost billion-dollar business, is stepping down at the end of the month. Amazon VP-North American advertising sales Seth Dallaire will take over Utzschneider's position.
Ad Age 


Retail News

Ham Named Food Lion President as Campbell Resigns
Food Lion said Thursday that Meg Ham has been named president effective Nov. 1, succeeding Beth Newlands Campbell, who is leaving the company for personal and professional reasons. “We are extremely pleased to tap into internal talent to ensure a seamless transition of Food Lion operations to Meg Ham,” said Kevin Holt, CEO of Food Lion’s Salisbury, N.C.-based parent, Delhaize America. Ham will lead all Food Lion banner operations, including strategic direction, financial performance, product assortment, pricing, customer service and marketing. She will continue to report to Holt. Previously, Ham served as president of Delhaize’s Bottom Dollar Food discount division. She joined Delhaize America in 1988 and has held a wide range of leadership roles at both Food Lion and Hannaford. Delhaize has not commented on widespread industry speculation that it has been seeking a buyer for its Bottom Dollar stores. Newlands Campbell was named president at Food Lion in 2012 as part of an executive overhaul under CEO Roland Smith, who subsequently left his role in 2013. She previously served the same role at Delhaize’s Hannaford Bros. banner. “I want to thank Beth for her 27 years of service at both Food Lion and Hannaford,” said Holt. “She has led significant improvements at Food Lion during the past two years, with a strong focus on enhancing the customer shopping experience and ensuring that Food Lion’s communities can count on us through our Food Lion Feeds hunger relief efforts.

Wal-Mart Considers Online Price Matching
Wal-Mart is testing a program to match online prices in an effort to compete in the cutthroat holiday shopping season. While the company already has a price-matching program for local, in-store customers, executives are discussing whether or not to go ahead and make it available online, reported The Wall Street Journal. The potential is twofold: It could give the brand a leg-up on the competition, but could also cut profits. The company is taking into consideration how much Walmart might lose in profit if the program went nationwide. Deisha Barnett, a spokeswoman for W-M, said the company's focus is taking care of its customers and that store managers already have discretion to match some online prices. Best Buy and Target already have programs in place to match online prices. The idea is to keep customers from making purchases elsewhere, such as on Amazon.

Retailers' Competitor to Apple Pay Has Been Hacked During Test Phase
FierceRetail reports that CurrentC, the mobile payments system that is positioned to compete with Apple Pay, has already been hacked, even as it is being tested only in select Minnesota retailers. The Merchant Customer Exchange (MCX), the consortium behind CurrentC, released a statement that said, in part, "Within the last 36 hours, we learned that unauthorized third parties obtained the e-mail addresses of some of our CurrentC pilot program participants and individuals who had expressed interest in the app. Many of these email addresses are dummy accounts used for testing purposes only. The CurrentC app itself was not affected. We have notified our merchant partners about this incident and directly communicated with each of the individuals whose email addresses were involved. We take the security of our users' information extremely seriously. MCX is continuing to investigate this situation and will provide updates as necessary." At the same time, the NY Times reports that the backers of the Merchant Customer Exchange, which has been developing CurrentC, say they are open to adopting the same technology being used by Apple Pay. The focus at CurrentC to this point has been on QR code technology, while Apple Pay has used Near Field Communication technology. “I think there’s been a mistake made here, and that is focusing on the technology instead of what business or consumer problem you’re trying to solve,” Dekkers Davidson, CEO of the Merchant Customer Exchange, tells the Times. Meanwhile, Time has a piece about the growing battle between Apple Pay and CurrentC, which broke out into the open last week when several retailers involved with MCX decided to disable Apple Pay technology in their stores. CurrentC, the story says, is "seen by many as having been designed more to benefit merchants than consumers. It’s certainly less user-friendly and probably less secure than Apple Pay, but it will help merchants sidestep the much-hated fees they have to pay every time a customer swipes a credit card. CurrentC is also just less cool than Apple Pay--from a tech obsessive’s perspective, it looks like a budget sedan to Apple Pay’s Tesla Model S."

Kroger Execs Say Chain's Not Worried About Amazon
Kroger Co. is aggressively going after online supermarket sales and isn't worried about a battle looming with competitors like Amazon. That's what the Cincinnati-based supermarket operator's executives told analysts and investors on Wednesday during the company's annual investor conference. An analyst asked Kroger executives what they thought about AmazonFresh, especially since "they don't have to make money," as the analyst put it. "We're not fixated by it," Kevin Dougherty, Kroger's group VP of digital and Vitacost, said. "A decade ago, we decided we have to play our game and focus on our strengths. They may succeed, but what we do has worked for decades, and I'd want to bet on that being sustainable." Kroger is also about to launch an online click-and-collect service in Cincinnati. Harris Teeter, the North Carolina-based chain Kroger bought in January, has a similar system. Kroger is working to improve the system before it rolls it out to the public in Greater Cincinnati. "We're putting processes in place to make it more efficient," Dougherty said. "You'll be underwhelmed by the visual experience, but it's designed to help customers get through a big-basket shopping experience quickly and efficiently."

Kroger Answers Call for Simplicity to Gain Natural Market Share
Kroger’s share of natural and organic foods is growing faster than the category nationwide, company officials said Wednesday, citing responsiveness to changing consumer tastes and an expanding selection. Kroger supermarkets stock some 17,000 to 20,000 natural and organic SKUs (of 70,000 overall) today. As the category has gone “mainstream” Kroger has been changing shelf tags so as to point out product attributes like GMO Free and USDA Organic that are helping to drive the growth, Jill McIntosh, VP of natural foods for Kroger, said in a presentation at the retailer’s investor conference in Cincinnati, Wednesday. “It used to be that people looked at the nutritional panel to see if a product was good for them,” McIntosh said. “Now, more and more, consumers are looking at the ingredient list to see if its short, simple and actually inludes things they can pronounce before they want to eat it. This is a food revolution driven by the millennial customer.”

Consolidation Making Executive Jobs Harder to Find
With ongoing consolidation in a slow-growing industry, jobs for supermarket executives just aren’t as plentiful as they once were. And though e-commerce offers a promising alternative track, not all brick-and-mortar jobs are built for the virtual world. These realities are reflected in the annual survey of supermarket industry executive salaries prepared for SN by the executive search firm Austin-Michael LP. In an interview, the firm's managing partner, Jose Tamez, said he expects the pending combination of Cerberus/Albertsons and Safeway to result in some scaling back of the combined workforce but added that he’s unsure of how significant the changes will be or how rapidly they will arrive. This is because the one-time competitors have historically tended to manage their organizational charts differently, with the leaner, flatter Albertsons organization now absorbing a deeper, more hierarchal partner in Safeway. The companies, still awaiting the finalization of the deal, have not commented on specific synergy goals of their merger, but the opportunity to reduce operating costs through the combination was “a significant benefit and part of the rationale for doing the merger,” according to Safeway’s Robert Edwards, who will serve as president and CEO of the combined entities. Tamez said he advocates a measured approach to such cutbacks, saying that synergy savings should not come at the expense of unique knowledge and experience. The recent Spartan Stores-Nash Finch merger--in which Spartan overtook a counterpart with a military sales unit Spartan didn’t previously have--was a good example of a sensible approach, he said.
Supermarket News (sub req.)

FMI, Technomic Form Fresh Food Business Alliance
Food Marketing Institute (FMI) and market research firm Technomic have joined forces in a strategic business alliance to offer food retailers concrete information on growth opportunities for their prepared food sections. Slated to launch in November, the initiative will evaluate product sales, staffing, rates, space allocation, merchandising and other strategic measures. Additionally, the partnership will make available an interactive online tool enabling retailers to evaluate objectively the effectiveness of their prepared food program management, as well as providing access to whitepapers analyzing trends in the category.

Rouses Debuts Concept Store
Rouses Market is debuting a new concept with the opening of a new store in Lafayette, La. The store is designed with a modern open layout allowing customers to experience steaks, fish and fresh ingredients cut before them. The produce department is located in the middle of the store and not on the perimeter, and customers will be able to see and talk to the butchers, bakers, florists and chefs and cooks while they work. Workers will prepare fresh food all day for dining in-store or to go. The store will also grow its own fresh basil, parsley and thyme in aeroponic towers on the store’s balcony. A full-service deli, butcher shop, sausage kitchen, seafood department, cheese department, floral department and bakery are also among the store’s fresh food offerings.

'Health-Committed' Consumers Represent Major Opportunities For Brands, Retailers
A a new report from Dunnhumby that analyzes the value and behaviors of "health-committed" consumers — those who devote more than 70% of their grocery purchasing to healthy products. Dunnhumby reports that improvements in economic conditions and increased concerns around health — 70% of consumers globally believe that they are less healthy than previous generations— have led to a 38% increase in the number of health-committed consumers since 2009. In fact, about 25% of consumers globally are now committed to health, the study found. Importantly, these consumers are 24% more valuable than the average customer. They tend to be more affluent (a trend consistently reflected in the data for all countries studied by Dunnhumby); they spend more; and they shop more frequently than low health-committed consumers. At the same time, health-committed consumers are willing to spend more on healthier products regardless of affluence. These purchase behaviors make them more valuable to brands and retailers than more affluent consumers who may have less of a health commitment, according to the researchers. Furthermore, while these consumers take responsibility for their own health, nearly two-thirds (62%) want guidance from food brands on health and wellness, and 53% say they believe a retailer can have a significant role in supporting their commitment to health. In comparison, just 37% say they look to their governments for guidance. The overriding conclusion is that for food brands and retailers, focusing on health should be recognized as a good business strategy, not just a corporate social responsibility issue.

N.C. Publix Opening Creates 'Frenzy'
The opening of a Publix in Cary, North Carolina on Wednesday was greeted by throngs of customers, and a major shortage of parking spaces. ABC11 reports that the opening has started a supermarket war, as a Harris Teeter with a very similar customer base is located just a short drive away.


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