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Archive | February, 2009

Cathy Zielske Done With CK Media

CK Media promised to roll the content of Simple Scrapbooks into its Creating Keepsakes title when they announced the shuttering of Simple. It’s starting to look like they won’t have much in the way of staff from Simple to do that with, as we start to learn about Simple Scrapbooks’ staff departing CK Media.

Popular Simple Scrapbooks personality Cathy Zielske indicated on her blog today that she is no longer an employee of CK Media. Zielske has not indicated any future plans for scrapbook work. I sincerely hope that we haven’t seen the last of her talent & refreshing personality in the scrapbook industry.

In addition to her work creating editorial content for Simple, Zielske also brought her graphic design skills to work doing the magazine’s art direction. Her two books for CK Media, Clean And Simple Scrapbooking: Ideas for Design, Photography, Journaling & Typography and Clean and Simple Scrapbooking – The Sequel will continue to be classic textbooks of the graphic style of scrapbooking.

In another Simple note: Tina Cockburn, who provided a lot of design content for Simple Scrapbooks (including cover art), revealed this week on the Studio Calico forums that she is owed a large amount of money from CK Media. She seems to be done with CK as well.


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Scrapbook Magazine Circulation & CK Media

Today I decided to delve into the circulation statistics of the various scrapbook magazines to see what light they may shed on the state of CK Media and of the industry in general.

Brace yourself…here comes a lot of statistics…

First, their advertising content numbers are revealing about why Simple Scrapbooks was discontinued. The previous two published issues (Jan/Feb 2009 and Mar/Apr 2009) have been only 15% and 11% paid advertising content,
respectively.

A look at the circulation statistics (as filed in their annual USPS circulation reports) of all of the major scrapbook magazines is definitely educational. It both explains where the magazines in this industry have been, and points to where they might be going.

One of the statistics that the magazines must report in their USPS circulation statements is the average per-issue circulation of all issues in the past 12 months. The most recent available reports were filed on October 1st, 2008. I did some comparing to the ones that were filed the same day in 2007.

PaperCrafts and Creating Keepsakes‘ average circulation per issue was basically stable between 2007 and 2008. Simple Scrapbooks dropped approximately 8% from 2007 to 2008, and Digital Scrapbooking Magazine dropped around 12%.

Volume of circulation is even more important than the percentage amount of change in that number, however. Circulation numbers show that Scrapbooks Etc. is the unquestioned ruler of the magazine market in scrapbooking. Their average circulation of 280,000 copies dwarfs the next largest contender – Creating Keepsakes – who only averages about 200,000 copies. Scrapbooks Etc. crushes everyone else’s sales on the newsstand, moving more than twice as many copies there as CK, and providing them a circulation advantage of about 45,000 copies through that outlet. Their average subscriber volume is also about 35,000 stronger than Creating Keepsakes.

(An interesting aside about newsstand sales of scrapbook magazines: At my local Publix grocery store this afternoon there were 3 scrapbook magazines available for sale – Scrapbooks Etc, Creating Keepsakes, & PaperCrafts – and no less than nine quilting titles.)

For total circulation the magazines are ranked in their 2008 average circulation reports as follows:

  1. Scrapbooks Etc. (280,000)
  2. Creating Keepsakes (200,000)
  3. PaperCrafts (177,000)
  4. Memory Makers (159,000)
  5. Simple Scrapbooks (120,000)
  6. Digital Scrapbooking (36,000)

(Other magazines are not included because I did not have the issues that contained the circulation reports.)

The surprise strong second place contender on the newsstand is PaperCrafts. In fact, both Simple and PaperCrafts on average outsold Creating Keepsakes on the newsstand in the 2008 circulation numbers.

Looking at the numbers in the list above, it is a little easier to understand the actions taken by CK Media in the past few months of shuttering the magazines that it did. Even if there were those of us like myself who loved the two titles, obviously we were in publishing terms too small of an audience.

What do those numbers mean going forward? Scrapbooks Etc. seems in the strongest position – their circulation is strong and they are still managing a higher percentage of ad content at a higher page count than anyone else.

Creating Keepsakes would seem to be in a relatively strong position as well, except that we already know the company has dug themselves a deep hole.

Advertising content at both PaperCrafts and Memory Makers has dropped to dangerous levels, and they don’t have the circulation strength of CK and Scrapbooks Etc. to rely on. The health of those publications will bear watching.

No one in the publishing industry is immune from trouble in current times. Publications are dropping right and left. We shouldn’t expect the scrapbook industry to be any different.

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Follow-up on CK Media’s Troubles

After surveying Creating Keepsakes’ drop in advertising in the past 12 months, it seemed a good idea to follow-up with an examination of the advertising in the other CK Media magazine still in print: PaperCrafts.

The advertising situation in that title appears even more dire than in CK Media’s flagship title. A year ago, just over 24% of the magazine was paid advertising.  The current issue is 8 pages shorter than the length in March 2008, and still only manages to contain 18.6% paid advertising. Considering that Creating Keepsakes’ “good” numbers a year ago (when it appears they were already having trouble paying their bills) were 33-38%, 18.6% is dismal.

Are the advertising problems industry-wide? To a certain extent, it appears so – which isn’t surprising to anyone following the publishing industry with magazines dropping right and left. A year ago, Scrapbooks Etc. was 32.25% paid advertising. Now, it is 8 pages shorter, and only 25.6% paid advertising content. Memory Makers’ numbers look even worse: In May/June 2008 they were 31.64% paid advertising content. Now, they are 15.4% paid advertising content (although the same length).

While CK convention attendance has seemed strong to outside observers, that doesn’t seem to mean they’ve been any better at paying their bills for that part of their operation. I’ve been receiving numerous reports of creditors who are owed overdue bills that run into as much as 5 digits from doing business with CK Media’s convention department.

And apparently being on the magazine’s masthead doesn’t keep you off the list of the unpaid, either, as Creating Keepsakes’ web hostess Erin Lincoln indicated this morning in a post to a thread on the CK message board about the company’s troubles:

erin-lincoln-message-board-post

Which may be the biggest indicator of all of exactly how deep the company’s troubles are.

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Time to start planning for CHA-Summer 2009!

For anyone who works in the crafts industry, it’s time to start planning for CHA-Summer already. (I know, it’s hard to believe when it’s still winter outside and we’re still recovering from CHA-Winter, but it is!) CHA’s travel site for CHA-Summer is open for business…it’s time to pick your dates and hotel, and start making reservations.

Those of you with eagle eyes may have noticed the appearance of the button leading to the Scrapbook Update CHA-Summer Planning Page in the right sidebar. The page is live and ready to help you plan your visit to Orlando, and can also be reached using the “CHA” tab in the navigation bar at the top of Scrapbook Update.

The CHA-Summer Planning Page includes links to all of Scrapbook Update’s news updates on CHA-Summer, links to official CHA information for the show, and links to a variety of special Scrapbook Update content on travel and show preparation.

Right now, in addition to articles about preparing for CHA, you can check the Traveling to CHA with Technology page for information on the internet and technology service offerings at the various official CHA hotels. Coming soon is a variety of information available about the Orlando area theme parks, and area dining, that will also be able to be reached from the CHA-Summer Planning Page – so keep an eye out for it!

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Major Trouble at CK Media

CK Media, parent company of Creating Keepsakes and PaperCrafts magazines, can no longer deny (after months of rumors) that it is in financial trouble after word has come out publicly that the company has hired turnaround and bankruptcy consultants CRG Partners to assist it.

A representative for CRG Partners confirmed to Scrapbook Update today that CK Media is a client of CRG but declined further comment.

A message requesting comment left with CK Media’s parent company, Sandler Capital Management, was not returned.

CK Media had the following to say when asked for comment:

Economic times are tough. Like so many companies, CK Media is feeling the hardships that come from being in a recession. In order to continue doing business during such tumultuous times, a time when so many magazines are closing their doors, the company is restructuring its finances to settle outstanding debt and keep its doors open. Our lenders have contracted with an outside firm called CRG Partners to resolve this debt.

Supporting the crafting industry has always been a top priority for our company, and this step, however difficult it may be, is a necessary one we must take in order to continue offering that support. Please know that this is a business decision and in no way changes or reflects how much we value and appreciate our business partners and readers. After all, it’s because of their contributions and the support they give that we have products to provide. This restructuring is the best opportunity our company has to move forward and continue producing our various crafting titles.

This statement is very similar in wording to an email that was reportedly sent to PaperCrafts creditors whose payments are past due, instructing them to contact CRG Partners regarding their payments.

The most important part of this statement is the veiled admission that CK’s lenders are taking a direct hand in the company’s financial management by bringing in CRG. This is eerily reminiscent of the recent situation of Creative Memories, which was basically forced into bankruptcy court by its lenders after missing loan payments.

CRG told an unnamed Scrapbook Update source who is owed money from CK Media that the company has $70 million in debt and only $20 million in assets. The creditor was offered 25 cents on the dollar to settle their debt, and was told that 80% of the company’s major creditors would have to agree to similar settlements within 30 days to satisfy CK Media’s lenders.

Based on the timing of CRG’s contact with that creditor, the clock will be running out very soon on CK Media’s 30 day deadline from their lenders.  Given the challenge of getting concessions from that large a percentage of the company’s creditors, it seems a distinct possibility that the company will be forced into bankruptcy court by their lenders in the very near future.

So how did CK Media get to the point of its lenders calling in a turnaround specialist for it that is threatening bankruptcy to its creditors?

CK Media was created by Sandler Capital Management when it bought the crafts magazines group from struggling Primedia in June 2006.

In the past 18 months, CK Media has shut down 4 magazines. First to go, after its Sept/Oct 2007 issue, was the Memorytrends trade publication for the scrapbook industry. Then in July 2008, the company’s other trade publication, Craftrends, shut down its print operation in favor of a web publication. In November 2008, the death of the surviving Craftrends web operation occurred, along with the demise of Digital Scrapbooking Magazine’s print operations. The slashing continued with the announcement last month of the shutdown of Simple Scrapbooks magazine.

A major contributor to the company’s problems would appear to be the same advertising slump that has taken down many other non-scrapbooking magazines in the past 12 months. A survey of Creating Keepsakes issues during the past 12 months shows a drastic decrease in the amount of ad content in the issues. Between March and October 2008, the issues that I surveyed contained between 33% and 38% of their pages devoted to paid advertising space (excluding CK’s own ads). Examining the March 2009 issue, the issue is 8 pages shorter than the standard length of the 2008 issues, and the paid ad space still only equals 22% of the issue’s pages.

One obvious shortfall in the ad space occurs in the “Store Directory” section. In June 2008, this section was 14 pages long and contained 248 store listings. In the March 2009 issue, the store directory section is only 6 pages long and contains only 137 stores. The missing 111 stores add up to over $16,000 in lost revenue if calculated at the $150 “CHA Special” rate for the directory listings being offered on CK Media’s advertising handouts in Anaheim.  Some of those stores also probably advertised on the CK’s website, which cost an additional $55 at the CHA special rate in Anaheim last month, resulting in even more lost revenue. Many of these stores have probably closed due to the economy.

And that is just the “Store Directory” ads. The March 2009 issue of CK had 21.5 pages of paid display advertising in it. In March 2008 that number was 31 pages. The June 2008 and October 2008 issues had even more pages of advertising than the March 2008 issue had. The October issue had seventeen more pages of paid display advertising than the current March 2009 issue.

These numbers just reflect the state of CK Media’s flagship publication, Creating Keepsakes, but it is hard to imagine that the company’s other publications (PaperCrafts and an array of quilting and sewing titles) have not been affected as well by the advertising downturn that has been hammering the entire publishing industry.

There does seem to be one bit of good news for CK Media – their events operations seem fairly healthy. The same total number of CK Conventions/CKU/Creative Photography Retreat events are scheduled for 2009 as for 2008. How successful those events will be for the company remains to be seen in most cases, but CK apparently felt secure enough to not cut back on events for this year at a time when the company is slashing in other areas.

Will it be enough? We may not have to wait very long to find out.

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What can scrapbook retailers learn from…Apple?

Fast Company’s well-known technology blogger Robert Scoble has written a wonderful article responding to the news that Microsoft is going to try to open retail stores. The article, entitled “What Microsoft Can Learn About Retail From Apple And Best Buy,” is a must-read for any retailer looking to learn from the king of the retail store experience – Apple.

Scoble effectively parses out in his piece exactly what it is that makes Apple so successful in creating their signature retail environment – lessons that can be transferred to any retail store.

I have to admit that I especially agree with his point about the bathrooms being part of the experience, especially for businesses like scrapbook retailers with mostly female clientele. Scoble also makes strong points here about focusing on lifestyle, not just products, and about educating customers.

If you are a tech geek that has ever visited an Apple store, you will find yourself nodding in agreement at Scoble’s analysis of what makes their stores so inviting. If you’ve never had the pleasure of visiting an Apple store, I highly suggest reading the article and then going to see for yourself exactly what the Apple store experience is all about. There is a lot to learn there for other retailers looking to create a premium experience of their own.

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