Knee-jerk reactions to the onset of digital have been a problem to print publishers since the dawn of cyberspace. The cries of ink-on-paper being swallowed up by the “Digital Black Hole” could, and still can be heard resoundingly throughout the media world. But rather than reacting to the uncertainty of the moment, Manuel Yáñez Herrero, Director General of the Asociación Mexicana de Revistas, A.C., believes that magazine publishers should be creators of change, not Chicken Little running from the Digital sky that is about to fall upon their heads. And while content is vital to the success of your magazine; the engagement of that content is nothing without passion and emotion motivating each and every facet of the publication, from design to writing, to the ads placed within the pages.
Last week I was honored to be asked by the Revistas Mexico to be the keynote speaker at their annual breakfast meeting in Mexico City. I seized the opportunity to ask Mr. Herrero some questions about the magazine market in Mexico and the challenges that our neighbors south of the border are facing. His detailed answers to my questions are below in the Mr. Magazine™ interview with Manuel Yáñez Herrero… and get ready to be inspired!
Samir Husni: What do you think are the major problems facing the magazine industry in Mexico? Single copy sales? Advertising? Move to digital?
Manuel Yáñez Herrero: Mexicans have been, for centuries, very creative people; we love color, music and having fun. This means we have a bunch of young creative people putting out great magazines.
So in this field we really do not see a threat. We have strong traditional titles and we continue to launch new ones. BUT, and as you can see it is a big but, it’s our distribution.
As you experienced, Mexico City is a huge, quite complicated place and for the past 80 years or so we have been distributing magazines the same way. We, via our printers, send allotment of our titles to the old part of the city located, as in every city, in the center. Then we have a Union. This Union controls newsstands. If you want to own one you must be part of the Union. These newsstands are hereditary.
So the Union there delivers our magazines to a ¨Despacho,” which is mainly a small warehouse. Then another part of the Union that owns a smaller warehouse called an “expendio,” which is a sort of wholesaler, goes to a Despacho (there are 4 of them) and takes the magazines. Then every day at 5 in the morning the voceadores (owners of newsstands) buy the magazines they think will sell. Some of them have credit so they take a bigger allotment, but some do not, so they just take what they can afford.
You know what this means, it, off course, limits sales tremendously and dooms new launches. Then they take the magazine to the newsstand to sell and after display time concludes, depending on frequency, weeklies, fortnightly, monthly etc., they take the ones that didn’t sell back. This also means that monthlies and bimonthlies suffer because they very seldom are displayed for the whole 30 or 60 days.
We give credit to the Union, so we get sales info and payment 8 days after closing date. Ten years ago this channel used to account for up to 60% of sales now it is only around 15%.
What has happened is there are more and more convenience stores (7 elevens and such) and there is a chain called oxxo that owns almost 12,000 convenience stores around the country. So now these stores account for around 25% of sales.
Then there were, for the past 40 years, three National Distributors: DIMSA (owned by an American, Brian Weiner), CITEM (owned by the biggest drugstore medicine distributor in the country), and Intermex (owned by editorial Televisa).
It’s the usual terrible system; we deliver allotment, they make bundles depending on volume for each state or retailer (Wal-Mart and such), then they truck every bundle to its destination. We get sales info and payment 90 days later. They keep, on average, 40% of the cover price, with which they cover every expense: delivery returns, the cost of renting space in retail stores, etc., and as you can imagine they were losing money a lot of money. Payments were on average after 140 days instead of 90 and just last month CITEM folded and stopped payments all together.
So for starters, with this business model distribution was never the way it should have been due to lack of cash flow; distributors just took our titles to places where they could make money. Titles that did not sell, no one cared about, as long as they sold advertising, distribution was free! And successful magazines covered the costs of lousy ones.
As you can see, the future looks gloomy. We, in Revistas Mexico, are trying to take control of distribution. In the meantime, we are losing readership and exhibit space. We are almost there; we already negotiated with retailers and agents in every state (newsstand and convenience store local distributors), but our cash flow has been affected immensely. We are also working very closely with Intermex Editorial Televisa’s distribution arm to consolidate all our titles and work together in getting info and having just a group of supervisors (there used to be three groups, one per each National Distributor, and maybe one from at least 3 editors groups).
It’s an interesting problem to have. I know that in England, France and Spain they’ve had similar problems and similar solutions, with different results, none of them that successful. I would like to design a better business model.
Sorry for the long answer, but this is a big problem.
As far as Ad sales, we currently represent 4% of adspend pay. We know we should at least grow a couple of percentage points and that is an objective.
Samir Husni: What is the role of Revistas Mexico?
Manuel Yáñez Herrero: Due to all of the above, three years ago the industry’s bigger players decided to work together. In the past we worked with the Mexican Chamber of the Editorial Industry (CANIEM: Camara Nacional de la Industria Editorial Mexicana), which grouped Book Editors, Newspaper editors, Magazine editors together.
After hundreds of hours, finally, on October 2011, we came to an agreement and legally formed the Mexican Association of Magazine Editors (AMER: Asociacion Mexicana de Editores de Revistas) with the Revistas Mexico brand.
We have 4 objectives:
1.- To promote the intimate relationship we have with our audience
2.- To make more transparent the way we measure our industry
3.- To have more and better distribution and exhibition spaces
4.- To promote editorial professionalism
For the first time we are working with PWC sharing industry information, very basic, but hard information:
· Jobs generated
· Single Copy Sales
· Ad Page sales
· Readership segmentation by age, geography and economic status
· Advertisers: who they are, how much do they invest and which gives us our Top 10 group.
We have this information per Quarter and we are sharing it with Industry players, Brands Agencies, and such.
We work with a government sector that supervises magazine contents and covers. They are in charge of giving title and content certificates for every magazine. They see that no child porn exists, that if a crime is committed by a minor there is no disclosure of any information about him/her and things like that. We also help make sure that there is no censorship regarding any publication.
We work also with the education side of the government with a program designed to professionalize every economic sector. In our case we focus on Editorial Industry. We are currently describing what we do, how we do it and who does what. Then we describe each job and so forth. We will then have a certificate which will help design courses for the betterment of people working in Editorial. We are working closely with Colleges and Universities to revise and design courses, Masters Degrees and even a specific career in Magazine Editorial.
We at Revistas Mexico are working with CEOs of our affiliates to solve the distribution problem.
We are working to promote creativity in magazine advertising (there is none!) so we are developing Lynx Awards for creativity in magazine advertising. Right Now TV ads are created and then maybe there is a still photo with a caption that turns into the magazine ad. We know specific design ads are by far more effective.
Samir Husni: You have such a marvelous magazine reading campaign. Tell me a little bit about the power of print and reading campaign?
Manuel Yáñez Herrero: Talking to friends and family, I realized that most people do not comprehend how many magazines they actually read. Very commonly their answer to the question: do you read magazines were a flat NO. Then talking a bit more they came to the realization that they read all the time. We started the statement, You Read Us When…and then we added…when you want to know about business, when you want to know about celebrities, when you are planning your wedding, when you get pregnant, when you have a baby, on the plane, at the dentist, at the checkout, even when you go to the restroom. Like you, more than 60 million people read us.
We invested more than 30 million pesos on a print campaign in our titles, some out of home and a couple of TV ads. You can see all of it on our page www.revistasmexico.org .
Speaking of which, we developed a web site where our advertisers can find which magazines are better for their specific target audience. You fill out sex, age and socio-economic status and we display all our magazines that cover that specific readership.
We are present on FB, Twitter and Linkedin @revistasmexico
Finally we are about to launch a Revistas Mexico Kiosk, http://www.revistasmexico.net
Samir Husni: How do you see the future?
Manuel Yáñez Herrero: The future is quite interesting. We stopped reacting to digital buzz and readership changes and are working on being the creators of change. We know that not only is content important, but what that content means to our audience. Engagement is nothing without passion and emotion.
Also, every media is different. Our brands should speak differently in each one, same message, same brand identity, but different ways to be read or heard or viewed.
It’s a complicated, but bright future.
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