Detroit Meltdown Opportunity for Publishers

When do you recall a news source headlining the recent whopping reductions in the price of fuel? But when gas prices were ratcheting up during this past summer’s frenzied pace the news was frequent and dire.

Up here in the north country we’re experiencing daily drops in the price for unleaded to well below two bucks a gallon, and my Chrysler 440 thanks you. Trouble is, you’d never know this crucial bit of price reality until the next refill. Pretty much back page news.

On a broader scope look no further than the headlines of the major news sources such as The New York Times, The Wall Street Journal, newspapers serving local markets, Time and Newsweek, CNN, network news, to name a few. Reports ranging from government bailouts, impending recession (whoops, guess we’ve been in one ten months or so), low consumer confidence, foreclosures, lack of credit, crashing stock markets, you name it, it’s all front page news. I’m not seeing much in the way of “CEO Reginald Punter of Mufflers- R-Us spent a quiet evening at home after his company reported record earnings.”

Like being drawn to highway death and carnage, shock and awe are the tools of the trade to grab and retain consumers. Simply put: Bad news sells.

We’re in the midst of an unprecedented financial crisis effecting everyone from Joe Six Pack to Sir Trailer Queen. Meanwhile, the auto press writes as if their readers are actually buying cars. Fact is, the market has stopped as buyers keep what powder they have left dry for the eventual rainy day. The collector car segment is back to 2004 levels so your Ferrari 275/GTB short nose purchased in 2007 is already down $200K.

November sales for the Big Three were off by over 40% with Chrysler taking the blue ribbon at 47%. Even the furrin competitors saw 30% drops in units sold. Consumers are in a bunker mode and its creating the worst automobile sales season in over 25 years.

So what’s with the lemmings mentality of the auto press? Fear of alienating paid advertising is certainly one, but doesn’t that come at the expense of editorial credibility? The Big Three won’t be spending too much in print in the coming years, you can count on that. Will the obligatory red Corvette cover image be enough to drown car buyers sorrows?

Publishers are loath to tick off what’s left of big company advertisers and many editors will claim content independence. Yeah, right. On the flip side, advertisers are leaving print like a mass exit from Wall Street so perhaps now is the time to write like there’s no tomorrow. Hmmm, will there be a tomorrow?

With plenty of bad news effecting everyone, and plenty of bad conditions effecting the magazine business, now is the time to really deliver on the editorial front. Instead of soft stories and glowing reviews of cars few will purchase such as the ludicrous Tesla roadster. Why not serious coverage of state of the automobile industry and what it means to the consumer? What are the buying opportunities now that SUVs and light trucks are available at giveaway prices? What has the crash in fuel prices done to sales of hybrids? Where will I get my new vehicle serviced under warranty? Maybe 2009 will be the last model year for the spectacular 6-speed Dodge Challenger so should I seek out a highly-optioned Hemi RT for future appreciation? And think of the auction business associated with selling off plants and equipment from shuttered dealerships?

Sure, there’s the occasional op-ed piece dissing the fortunes of the Big Three, issues about CAFE, and those silly environmental tirades. Sorry, but reader retention is accomplished with hard news you can’t get anywhere else. Rolling Stone’s founder Jan Wenner built his venerable title on the basis of a no-prisoner’s approach to factual reporting (e.g., the disastrous 1970 Altamont concert where the convergence of murder and music played out for all to see and read).

Sorry, but the funeral arrangements are underway no matter what Congress does for GM, Ford, and Chrysler… their fates are sealed. Time to get real about 2009. And time for publishers to really deliver on the hard news and do what many pure online competitors lack for in house expertise.

So, we have the obligatory fast cars gracing publications’ covers instead of content that will actually get folks to buy and read the damn magazine. How ’bout Rick Wagoner farting along the slow lane in his greenie machine, or the cover mock up contained in this blog post? I could go on about why GM should be put to death and that few in Congress fundamentally understand that a bailout essentially puts the U.S. Government in the car business. But that’s a topic for other blogs, err, I mean magazines.

Seize the moment, cover The Real Story, and sell more magazines. It’s no longer business as usual.

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Eric's Consulting Services for Publishers

There Are 5 Responses So Far. »

  1. Because the news about the Detroit Three and the auto industry is quickly changing, you’ll see much more about this subject at motortrend.com than at Motor Trend. However, we have tackled the issue in our next Power List, published in the February 2009 issue.

  2. Todd, thanks for the update. Detroit meltdown has the potential to define Obama’s administration, aka Bush’s Iraq. Win the war, lose the peace. We faithful readers eagerly anticipate MT team’s hard pen at investigative journalism. Consumer Survival and Buyer’s Guides might be just the editorial ticket to sooth widespread panic. Then 1/3 of the book low cost space for auctioneers hawking the inevitable foreclosed suppliers, dealerships, inventory. The times they are a changin!

  3. They should go under. They have had years to see the future but instead they have been expanding just to keep their precious business(-as-usual) model in the face of the offshore brands superior competition. It’s the same w/ pubs. Gone will be the inflexible behemoths with weak content. It is the darkside of capitalism where sectors become overrun w/ manufacturers of inferior commodities.
    The RULE: Content is King.

  4. Heard anything about Krause killing some Standard Catalogs?

    Then there are problems at Auto Trader:
    http://hamptonroads.com/2009/01/cox-auto-trader-close-norfolk-office

  5. Krause is expected to kill several titles in the coming months and/or convert to outmoded digital ezines. OCW’s production values (front-cover advertising can be a great money-maker but lacks appeal as currently presented), and reduced interior page advertising denies readers’ red-pen habit (where’s all those nifty two-page dealer advertorials?). Notwithstanding OCW’s editorial excellence, I doubt the pub has much of a future in print. The firm’s Standard Catalogs have been a fixture in the hobby for decades but just beg to be a pure online resource so it wouldn’t surprise me to also see these convert in some fashion. With collector car prices down 40% across the board for all but the ultra rare and coveted, and hobbyists holding back on restoration, the print information pipeline so critical to this once buoyant market has even less relevance. When car values crashed in 1990, Hemmings Motor News first-class subs immediately dropped by more than half as the urgency to buy cars simply evaporated. Pundits say “this time it’s different,” well, it sure is!

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