Has Online Syndication Killed the Goose That Laid the Golden Egg?
Back in the day, syndication not only sold papers, but was a booming business that built up audiences for everything from columnists’ and comic strip-pers’ books (with excerpts) to television audiences (with Gemstar numbers and listings). And, of course, the syndicated columns and strips could then be collected together and published. Today, book excerpting is all but dead, and no one under the age of 30 has ever heard of a Gemstar number. Many columnists and cartoonists retain enthusiastic followings, but as newspaper space continues to shrink along with ad dollars, and content continues its steady migration onto the web, syndication – as it was once known – is a dying form. The local newspaper, where a third party sources information, has given way to the idea of the “personal newspaper” with people using blogs, RSS feeds (Really Simple Syndication– something of a misnomer), and search engines to aggregate content in what Michael Cader of Publishers Lunch refers to as “viral syndication.”
“Online services have not produced big revenues for most newspaper syndication products,” David Hendin, former SVP of United Media/United Feature Syndicate, and current literary agent for a few syndicated cartoonists and columnists, said. “Although newspaper syndicates are still selling features, and licensing product, they’ve lost a lot of their other business.”
Still, the major players remain the same (see chart on page 6), and are looking at creative ways to drum up revenue and redefine the business. Until now, syndicates have been inextricably tied to print media, but many recent innovations are beginning to build on that relationship. Unable to generate advertising? Barter. Newspapers outmoded? Deliver cartoons to cell phones. Undaunted, there are even some new syndicates that see the current flux not as a deterrent, but as an opportunity to get into the game.
The Way Things Work.
Traditionally, newspaper syndication went like this: newspapers acquired a property (be it a comic, column, or puzzle), put it under an exclusive contract, and split the net with the author 50/50. In the case of Miss Manners, written by Judith Martin (one of Hendin’s long-term clients) and syndicated by United Feature Syndicate (the syndication arm of United Media), Martin now owns all of her content. This wasn’t always the case. Over the last 15-20 years ownership has shifted from the syndicates to the writers themselves. Whereas many syndicates used to have a blanket copyright, now the syndicate is often listed as a distributor.
Every week, Martin writes a Miss Manners column for the Microsoft network (on an exclusive basis, not to be syndicated), and three for UFS which are syndicated into about 250 newspapers. Martin holds all of the non-syndication rights, including all electronic rights, except for the e-rights to online newspapers which remain with the syndicate. She has written eleven Miss Manners books, most recently an updated version of MISS MANNERS’ GUIDE TO EXCRUCIATINGLY CORRECT BEHAVIOR (WW Norton, April 2005). Syndicates with publishing divisions (e.g. Andrews McMeel) usually have first option for book deals, but – as with everything in the new order – it depends.
The contracts differ for each creator, but in general, the relationship between syndicate and creator remains the same – creators produce and syndicates manage and promote (and on a dwindling basis, edit) the work. John McMeel, Chairman & Founder of Andrews McMeel’s Universal Press Syndicate, refers to his company as a “talent provider” managing the content, and exploring new arenas for syndication beyond newspapers such as online and mobile carriers.
Randy Cohen, who writes The Ethicist, a weekly column for the NY Times Magazine, is currently syndicated into 48 papers. Officially a freelance writer for the NYT, Cohen owns the rights to his work. “Since I’m freelance, I’m free to take the column anywhere,” he said (provided that it appears in the NYT first – syndicated papers can run the article either simultaneously or anytime after the fact).
Cohen was syndicated through the New York Times Syndicate for about three or four years before switching over to Universal two years ago. “For me, it was how effectively and aggressively they’d go out and sell the column,” Cohen said. “Syndication money is free money – I mean, it’s nice that a check comes in, but it’s not exactly lifestyle changing. It’s more about the audience building.”
With approximately 1.67 million people reading the Sunday NYT every week alone, there’s a fair amount of familiarity with both The Ethicist as a brand (which is owned by the NYT) and Cohen himself. In 2002, when Doubleday published Cohen’s THE GOOD, THE BAD & THE DIFFERENCE : HOW TO TELL THE RIGHT FROM WRONG IN EVERYDAY SITUATIONS, Cohen’s alter ego was prominently displayed.
Cohen said the most he makes off of a single syndicated piece is (maybe) a couple hundred dollars a week, but that some pieces bring in as little as $10 (depending on circulation). Universal compiles the money each month and then cuts a single check. “At the end of the year I could maybe buy an economy car,” Cohen said. “A nice economy car, but still.”
David Hendin said that for lesser known syndicated columnists, and especially cartoonists, the take is even less. “A lot of cartoonists’ total salaries [including syndication] are in the $50K a year range,” he said.
“The funny thing about the 50/50 price split is that it’s a real anachronism,” Cohen said. “When distribution was a daunting task it made sense, but now I can e-mail cc 48 people…Today syndicates get 50% because historically they’ve gotten 50%.”
Increasing automation has caused some new syndicates to pop up, despite purported syndication stagnation. Dan Calbrese, Editor-in-Chief of the North Star Writers Group a small business that started last fall, said that internet technology makes it much easier to distribute to newspapers nationwide than it would have been 10 or 15 years ago. “We can get material in front of 4,000 editors in a matter of minutes with virtually no distribution cost,” Calabrese said. “So the initial investment is not daunting.” As for newspapers cutting back and putting content online, North Star saw the shift as an opportunity, providing they could be costcompetitive. “Our lowest per-item rate is only $8, and we charge that for all papers [with a circulation] under 60,000,” he said (North Star also adheres to the traditional 50/50 split). So far, the most receptive papers have been community weeklies who want opinion pieces but can’t afford staff columnists. In addition, North Star provides intensive editorial support, a department that many of the larger syndicates downsized as they cut back.
Apart from writers like Cohen (who writes for a major paper, and is subsequently syndicated), and Martin (who writes directly for a syndicate) some content providers cut out syndicates entirely, and go straight to newspapers and other outlets as well. Last year, Newmarket Press inked a deal with the NY Daily News to syndicate the Sudoku puzzles from their bestselling BIG BOOK OF SUDOKU series.
Esther Margolis, President of Newmarket, said the deal came about through personal relationships between the publisher and the paper. “We knew that they knew they should have [sudoku],” she said. “Michael Cooke‘s wife was berating him about it. She used to leave a copy of the Post open for him every morning, because she had become a Sudoku addict.”
Rather than cut a standard syndication deal on a pay-per-puzzle basis, Newmarket decided to go for a non-exclusive barter deal that included daily promotion of the book in the paper (with a halfpage ad) and on the website (with a cover shot of the book and a click through link to BN.com). “The alternative was for them to pick up other syndicated puzzles for $50 a week.”
The idea of bartering through cross-promotion has been around forever according to Margolis, but the difference now is that it’s often the special sales departments handling the deals rather than sub-rights. She pointed to numerous examples where Newmarket has done similar cross-promotion with 2nd serials, coming out of the promotion and publicity departments rather than sub-rights and syndication. Since syndicated content is usually a fixed cost, and it is becoming increasingly difficult to generate advertising that pays the freight, the barter/promotional deal is a useful sidestep. Similarly, many writers and cartoonists aspiring to syndication work out barter deals with participating papers, where the paper will run a ten line bio about them, in lieu of a flat syndication payment.
Hundreds of Heads Books, a San Francisco publisher, gathers and compiles stories for their Hundreds of Heads series through a network of “headhunters” who conduct hundreds of interviews on various how-to topics a year. The first book in the series, HOW TO SURVIVE YOUR FRESHMAN YEAR, launched in spring 2004, and there are now ten titles in print, and five more slated for fall. Knight Ridder/Tribune Information Services (KRT – a “content service partnership” between Tribune Company and Knight Ridder) began syndicating a weekly story based on content from the Hundreds of Heads books as part of it’s “News2Use package” last year. Available both on an à la carte and subscription basis, it’s distributed through the KRT wire service. At the beginning and end of each column, there are plugs for the various Hundreds of Heads books listing their price point and the company’s website. Mark Bernstein, Publisher, defines the deal as a “license to distribute.” He said that the articles are running in hundreds of papers across the country and although it’s hard to track the exact effect of the increased exposure, the relationship has been a great benefit to Hundreds of Heads’ brand building efforts.
Why Pay When You Can Get It For Free?
Universal Press Syndicate’s online division uclick was started in 1995 as an offshoot of the newspaper syndicate. According to Chris Pizey, uclick’s President and CEO, the company was one of the first syndicates to move their print model online by providing both online newspapers and other sites with syndicated content. After a few bumpy years, uclick expanded into webhosting, developing a service that allowed web publishers to brand content so that it is fully integrated into their site. “It was revolutionary,” Pizey said. “After that, the whole thing just took off.”
There are a series of different models that uclick uses when syndicating content online, from fixed licensing fees to advertising, Pizey said. Since overhead costs are still a bit higher for online production, delivery and maintenance, syndicated content online generates less of a profit for creators.
As The Ethicist’s Cohen said, “Online syndication money makes syndication money look plush.” Cohen’s column is syndicated online to the OpEd section of Yahoo! News, among other places, but he can’t remember ever receiving a check.
Pizey explained, “We still view online syndication as ancillary. Over time, I think that will change, and we’re in the process of exploring new formats like mobile content and animation.” Currently mobile content is the fastest growing sector at uclick, and Universal overall. Go Comics, Universal’s mobile syndication division was started in late 2003. “We got involved in mobile fairly early,” Pizey said. Go Comics offers numerous downloads for cell phones including character branded wallpaper, animations, games and daily comics. The character branded downloads and features are not licensing deals, Pizey points out, but syndicated products developed by uclick.
Although all of the top, major-market newspapers are signed on, uclick only works with a fraction of the online divisions of the newspapers they service in print, since the smaller ones are still not in a position to justify the cost. Overall, he says, online syndication is “definitely profitable” though uclick is currently only just breaking even since so much money is still being reinvested into the format.
According to market researcher Nielsen Net Ratings, roughly 30 million unique readers visited humor sites in 2005 (which include comic strips) a 20% increase over the previous year. Since people don’t “subscribe” to free websites, and are generally less willing to pay for online content vs. print – revenue to support the content is ad based, and artists are paid based on individual traffic (measured in clicks) against overall site traffic.
As for the syndicate websites, some offer the bulk of their content for free, while others require a subscription. At Creators.com (the website for the independent Creators Syndicate – which reps every opinion from Bill O’Reilly to Molly Ivins), all syndicated content is updated and searchable. At United Media, content is subscription-only access. Both have their advantages – while free sites offer more widespread exposure, subscription sites are better able to monitor reader response. Lisa Wilson, SVP General Manager at United, said that the biggest advantage of the web is that it allows them to test new formats and even new artists in a way that print never did. “We get metrics that show page views for the individual strips,” she said. “We now have data that proves popularity. Newspapers can pick things that have been previously vetted with an audience.” At the time of registration, United collects basic demographic info like sex, age, and location. “We know who is reading the top 15 comics out of the 90 we have posted online,” Wilson said. Out of those 90, about 10-15% are web-only comics with an option for possible print syndication. “The web allows us to be open to new ideas,” she said. “I think it will actually grow the world of cartooning.”
Pizey doesn’t see a conflict between content being available for free in some places and not in others, or even both online and in print. “In local newspapers, content is really specific to the area,” he said. “The web breaks down physical barriers, but people still tend to visit fairly small sets of websites.” To that end, uclick has focused on creating a strong presence on large sites people are likely to use as their home pages, such as Yahoo!, AOL, and MSNBC.
Jon Rosenberg, a web-comic artist at goats.com – a site that reaches approximately 300,000 people a month – strongly disagrees. “Syndicates are dead,” he said. “Print is basically merchandising web comics. You don’t need syndicates or middle men anymore.” Rosenberg said that the web eradicates the need for syndication because you can target niche audiences, leverage word of mouth, and gain indie street cred just by posting free content. Beyond the web, Rosenberg self publishes as a way to turn a profit since he already has the built-in audience. “I can do a small print run of 2,000 at $3 a book, turn around, sell them for $12 and keep a majority of the money,” he said. “The major syndicates just don’t understand the model. Free content plus merchandising. If they want to monetize content, how can they compete?”
Whether or not syndicates understand the importance of free content, merchandising through character licensing continues to be a major source of revenue. Online, licensing for affiliated ancillary products is one way syndicates are picking up the slack. Syndicated cartoonists from Universal, United Media, King Features, and others have teamed up with CaféPress.com to present users with a variety of caps, mugs, and sweatshirts emblazoned with characters and strips.
In another licensing deal, last month it was announced that Universal Press Syndicate’s Cathy Guisewite (creator of Cathy) and United Media’s Scott Adams (creator of Dilbert – which appears in 2,000 newspapers in 65 countries and is translated into 19 languages) are producing seven and eight monthly comics respectively for the United States Postal Service (USPS). The cartoons will be featured in a monthly postcard campaign reaching out to 120 million residential and 10 million large and small business customers. Cathy features information geared toward customers – mentioning things like the availability of stamps in ATMs and stores – while Dilbert is more business focused. Natch.
