Jon Fine’s “Media Centric” column in the December 13 BusinessWeek describes the launch of Tyler Brûlé’s Monocle magazine which, contrary to current publishing trends, focuses on a high-end product that revels in its print origins. Fine writes, “In a manner almost wholly lost at American magazines, [Monocle] cherishes the primacy of a print publication as physical object. Each issue contains startling photography, multiple kinds of paper stock, and, somewhat discordantly, concludes with a manga comic. Monocle is either prescient, or steering sharply toward an audience that doesn’t exist.” Fine concludes, “perhaps Monocle evinces a next generation of magazines: higher-end, aimed at much smaller audiences, and with a Web component more like TV than print.”
Or this may be merely an example of what might be termed the “excluded middle”: When products or services become commoditized, it’s the broad, mid-market that disappears. But there’s a corollary to this observation: As everyone runs to the low end of the market to expand share in an attempt to retain profits as margins shrink, you can often stake out a profitable niche by doing the exact opposite — moving to the high-end of the market.
When the multiplex began to dominate theatrical movie exhibition, it seemed to signal the end of large screen movie houses. Indeed, the economics of the multiplex were impossible to deny: more screens offered more consumer choice, the option to allocate screens based on a film’s popularity maximized capacity, the ability to show a single print on multiple screens by staggering the start times trimmed costs and gave the audience more viewing options. But as the drive toward smaller screens advanced, IMAX was able to differentiate itself by doing the exact opposite: enhancing the theatrical experience with a larger screens and better sound. (For more on IMAX, see Knowledge@Wharton: IMAX CEO Richard Gelfond on What’s Next for the Big Screen)
While Dell and HP try to squeeze profits from low-cost commodity PCs, Apple charges a premium for the sophisticated design of its systems. Apple did the same thing in the late 1970s and early 1980s when Commodore and Atari tried to undercut each other on price at the low end of the home computer market while Apple stayed at the high end with the Apple II.
Of course this doesn’t mean that every high end product will succeed in a commoditized market. The secret of success is more complex than that. And I have no idea whether Monocle will ultimately prove successful. But its counter move to the high end of the publishing market makes sense.
Like the Johnny Mercer / Harold Arlen song advises, “Don’t mess with Mister In-Between,” but bear in mind that this leaves opportunities at both ends of the market.