The Digest’s durability over the years was because it was all paid for. Its headquarters was paid for. Its debt was nil. And so during a downturn, of which there were many during its long history, it could survive.

The story of the breakup of Reader’s Digest is a sad tale, detailed in Peter Canning’s excellent biography of founders Dewitt and Lila Wallace. The undoing begins with the literal suffering of Dewitt and Lila Wallace during their last days at High Winds, their estate. In senility, Lila Wallace’s staff was taken away one-by-one, and she wore ragged nightgowns. Dewitt Wallace literally died with untreated cancer, his guts spilling out at home. When she died, Lila Wallace’s ashes were spread over her Rose Garden. She felt secure about this; before she died she had seen to it that High Winds would be a part of Reader’s Digest permanently, and used as a conference and retreat center. But the estate was sold in 1985; her Rose Garden dug up for new owner, investor Nelson Peltz.

I mention all of this because it shows how far the company strayed from its founders, not only in its editorial mission, but it its whole respect for the Wallace legacy. Like Walt Disney, the BRAND was the Wallaces. To keep the idea alive, you need to have a healthy respect for the founders and their legacy. Certainly, you can change things, but whatever you do has to come out of a healthy respect for the brand and franchise. That was far from the case in Pleasantville.

A few weeks ago, and totally oblivious to bankruptcy issues, I wrote on how the early Reader’s Digest was literally the first “WEB 2.0″ media product, with elements of blogs, HuffingtonPost, Drudge Report and other elements. Having started a state magazine at the height of the last recession, I thought that the magazine during this recession is perfectly positioned for today, if it could only understand what made it great.

I don’t think it understands its strengths.

A few thoughts on what surviving investors like J.P. Morgan Chase (JPM), Bank of America’s Merrill Lynch (BOA), GE’ GE Capital (GE) Eaton Vance Investment Managers, Regiment Capital Advisors LP and Davidson Kempner Capital Management LLC, need to do, here on out.

1. Focus on its data: Reader’s Digest has a powerful subscription database; over eight million. It needs to use that data to sell other one-off products.
2. Be aggressive: Keep launching new magazines and web portals. Just because they are doing it now doesn’t mean it isn’t the right formula.
3. Stop the focus on costs. Publishing has overhead; you have to grow revenue. If you cut the overhead, you cut the brains that make the product. You can’t make cars without a factory, and you can’t publish magazines and websites without editorial and sales staff.
4. Buy regional titles: A magazine no longer stands on its own. A magazine is a front-piece to a web portal and a web brand. The Digest has the scale to build each of them into a franchise. I made a quick list off the top of my head.
5. Keep going with the magazine: In recent editions, Peggy Northrop has begun to take the magazine back to its hopeful state. They need to make sure they stay true to the original vision.
6. Launch a true web edition: The web is packed with great things; a DIGEST of the web would be a powerful publishing company.
7. Think about putting the index on the cover again. There is a reason why it worked; it was part of the brand. Remember the Digest had an index on the cover all during the era of Life and Look. In an overloaded era of graphics, reading and type becomes restful.
8. Honor the Wallaces. There is some bad juju when you sell of the family silver and you sell off the Rose Garden where your founder is buried, against her wishes. Reader’s Digest needs to do some things to mend those mistakes, or they will keep making them again and again.

As a magazine lover, I want to keep magazines. I hate to throw them away, even when reality hits and I realize that I can’t save them any longer. I cringe when I see libraries de-accession precious bound volumes of magazines, though I know that collectors love them, and they always find a home, even if the ads are ripped out and sold individually on eBay.

As a child, I saved all my magazines, but Boys Life, Popular Science, Popular Mechanics, American Heritage, Cricket, National Geographic School Bulletin (why did they get rid of it?), National Geographic and TV Guide were the ones I treasured. At other times, I kept other magazines, depending on my stage in life. Particularly good were early 1980s Playboys (lost in a trunk at my boarding school, with interviews with George Gilder and photos of Candy Loving!) as well as late 1980s editions of Harpers & Queen, Spy and Fairchild Publication’s excellent and super-snobby M, starring W. Rushton Chatsworth. Also keep-able was the Dorothy Kalins era at Metropolitan Home and the Phil Moffitt era at Esquire. Right now, I have a large stack of Country Life magazines I can’t part with, as well as the stack of Virginia Living magazines that I edited from 2002 to 2006. Right proud of that.

As the founding editor of Virginia Living, I took the old-school approach when we launched it. My publisher insisted on the best paper. My art director insisted on the best artwork. I demanded interesting stories that would be able to be read for years ahead. We made the magazines with perfect bindings. I can’t speak for all of the readers I talked to while editor, but many told me that they were afraid to throw the magazines out.

I don’t think I am odd. In the kitchen my wife has a stack of a neighbor’s Everyday Food from Martha Stewart. I know other people who keep Practical Fishkeeping, Coastal Living, Smithsonian and the old defunct Horizon. Town & Country is another keeper, as is any magazine that has recipes, like Southern Living.

Magazines as Storehouses

Why do we value a group of magazines? To look back at the early Arabic word that magazine derives from, it is a storehouse. A collection of ideas and pictures and thoughts. At their best, magazines validate our particular world view. I would guess that thousands of Oprah magazines get kept because their readers share her world-view, and they can reference it.

Like many others, if I am finished with a magazine, and cannot keep it, I leave it at a doctor’s office or car repair shop or barber shop. Or I give it to neighbors or friends. Many offices have tables where employees leave magazines for others to take home; some library Friends bookstores give away back issues. Only reluctantly do I “recycle” a magazine in a true recycling bin, except if it is a stapled newsweekly that won’t keep.

I always thought, however, that the magazine industry ought to do a better job at encouraging readers to keep magazines around for years. For instance, advertisers know instinctively that an ad in National Geographic gets more readers per copy than, say, a supermarket aisle magazine, and so they pay more. Smart publishers and reps push the idea of pass-along readership. Indeed with National Geographic, that “pass-along readership” might continue giving an advertiser exposure for the next 75 years.

Recycling page on MPA Site

Thinking on this idea, I was wondering if the Magazine Publishers Association was doing anything to promote the idea of keeping magazines around. So I went to the website of the Magazine Publishers Association, to see if they had any system or organized method to help re-circulate old magazines. What I found was a shock. The MPA, instead of having any sort of re-circulation program, instead encourages magazines to be dumped into the recycling bin! They have a whole page on recycling, with free PSAs for publishers to insert. That’s a great message. This magazine sucks after you read it, so throw it out quick! Oh and by the way, you readers are so stupid and ignorant as to not know that you can recycle a magazine. Brilliant!

Here’s how it’s worded:

MPA’s industry-wide public education campaign lets readers know that magazines can and should be recycled.  The initiative includes a pair of Please Reycle (sic) This Magazine logos for members to prominently display in every issue of their magazines and a series of PSAs for publishers to run whenever space is available to reinforce the message that magazines are recylable. 

The idea that the Magazine Publishers Association would be advocating tearing them up into shreds is inconceivable, and with lame-ass grammar to boot!

So what should MPA do?

1. Take down the recycling web page and drop the ad campaign on recycling. Immediately. Today. It sends the wrong message. And never a cut-out ad in a quality magazine, either.
2. Talk to the American Library Association about a true “recycling” program where Americans can leave their old magazines at public libraries for other people to pick up. Give out stickers to libraries so that patrons can place the something over the address label, eliminating the worry about identity theft. The sticker should read: “The Magazine Publishers Association and the American Library Association encourage you recirculate your magazines. Please pass it on after you are finished, so another American can enjoy the great American tradition of magazines.
3. Work with the AMA to encourage a new policy on physician office magazines. Magazine publishers depend upon waiting room readership, and doctors depend upon the cheap magazines to keep patients happy; use that as a launching pad for a take one/leave one policy at physician offices. Or even better, work to encourage subscriptions from waiting room copies.
4. Encourage magazine publishers to use perfect bindings. They are easier to keep.
5. Think about including perforated 3-up subscription card pages instead of blow ins, in order to sell subscriptions through multiple pass-through readers.
6. Work with publishers to think of their content more carefully. If there are fewer pages and paper is more precious, then the magazines that are put out should be created with an eye to becoming classics.
7. Work with advertisers to stress the new message, namely that pass-along readership and long shelf-life is a critical advantage of magazines. Each time a magazine is recirculated, its advertising gets seen again.

Magazines need to be read until they can’t be read anymore.

These brand names have value in a web-centric world.

With that in mind, let’s look at one newspaper, the New York Herald-Tribune. When the newspaper died in the 1960s, what survived was the International Herald-Tribune and the supplement, the New York magazine. The latter was rescued by Clay Felker in 1964 and turned into a very profitable magazine brand. Each flourished; perhaps one could argue that if the Herald-Tribune company had sold off or shut down the newspaper and kept New York and the IHT, it would still be in business. (We wonder how long New York Times Co. is going to keep the IHT brand? We believe that they should NOT change it. What they are doing now is perfect, leveraging the content of the Times, but still keeping the IHT identity. It’s a totally different paper. NYT did shut down the IHT website.)

I noticed on the website Newspapertiger.com that Journal Register had closed down a number of flags. (Read a great Alan “Newsosaur” Mutter analysis here.) While not having a familiarity with the exact market, in general any local newspaper that has been around for over four decades has much regional clout, and long relationships with local advertisers, even if they have been ruined by over-leveraged companies. In addition, they have back issues that sometimes go back 100 years. This is all legit “goodwill” that needs to be sold for cheap, not ditched. Dirks, Van Essen & Murry, a longtime broker, handled the sales; I am sure they would love to talk to anyone with cash.

Now, I am not saying these papers have LOTS of value. They have small value. What I am saying is that there is some value there, and with the investment of tiny amounts of money, and large amounts of expertise and time, many of these properties do not have to disappear. Perhaps the company could offload them for nominal amounts for a five-year balloon payment of some reasonable sum. That way there might be some long-term hope for the local flags.

It looks like some newspapers are being saved. For instance, in the Media Post story by Erik Sass, he writes that says that The East Hartford Gazette was closed, but its longtime editor Bill Doak has reincarnated it as “The Gazette,” serving as publisher, chief writer, and deliveryman. This type of setup has a long history in newspapering.

According to the Media Post story, the daily newspapers, The Herald of New Britain and the Bristol Press, were “saved from closure at the last minute when they were sold to Mike Schroeder, a former Newsday executive who also bought three weeklies: the Wethersfield Post, the Newington Town Crier, and the Rocky Hill Post.”

God bless Schroeder.

Interesting that Journal Register could not find buyers for the Harlem Valley weeklies. Some of these readership areas are very affluent and that the company was unable to find a buyer speaks not only to the crazy market, but to the company’s utter lack of imagination in figuring out how to run these small papers. The reality is that most of these papers could have run themselves if given independence from the parent company, but realistically, they sucked so much life and cash out of all these small papers for so long that it is no wonder they could not survive. I wonder if the company had so much to worry about that it just couldn’t do it all in time.

A few mentioned in the story:

Taconic Press (Journal Register subsidiary)

• Millbrook Round Table
• The Voice Ledger of Pleasant Valley
• The Gazette-Advertiser of Rhinebeck
• The Pawling News Chronicle
• The Harlem Valley Times
• The Hyde Park Townsman
• The Register Herald of Pine Bluffs
• The Putnam County Courier

Connecticut (apparently) closed:

• Bloomfield Journal and is said to be preparing to close the Shoreline Times
• Pictorial Gazette
• Branford Review
• Clinton Recorder and The Advertiser, of East Haven.

Interested in saving the actual newspaper? Read our post 20 Ways to Save the Daily. You might not agree with them all, but I think you will find that there are some suggestions that make you think. You might also read my story on saving newspaper flags; there I mention that over a decade ago I revived a newspaper name in Richmond, The Richmond State. We lasted for two years; perhaps at age 28 I wasn’t ready to run a newspaper. But in that scenario, I learned that using an old flag made a start-up much easier. I can look back on the project and see many mistakes that are easy to see in hindsight; one thing that was NOT a mistake as taking an old legacy newspaper flag and reviving it. Instantly, I found a spot in local libraries, and with the community.

I would love to hear from some folks in NY and Connecticut about these individual flags. While many cannot be rescued immediately, the folks at Journal Register should listen to suggestions on how to keep these newspapers alive in some form, so that these great towns can still have a voice. When these newspapers disappear, it is not like a filling station closing up. The soul of a community often leaves with the weekly newspaper.

SEATTLE – So, the Seattle Post-Intelligencer is up for sale, and if no one buys it, the paper will turn into an Internet-only newspaper, or so says Hearst.

Hearst has owned the paper since 1921, and made a lot of money off of it for years, though they say that recently, it hasn’t. The paper has a circulation of 114,000 with losses for years. According to press reports, it lost around 14 million dollars in 2008 and more last year.

“Our journalists continue to do a spectacular job of serving the people of Seattle, which has been our great privilege for the past 88 years,” said Steven Swartz, president of Hearst Newspapers, in an AFP story.

We have an idea. If it comes to this, Steven Swarts, why not make it a weekend-only newspaper? So the newspaper becomes the Sunday Seattle Post-Intelligencer. (Above, the Saturday edition; why not the Weekend Seattle Post-Intelligencer or the Saturday Seattle Post-Intelligencer.)

Yes, vast staff would have to be laid off, but the town could still reasonably keep two printed editions of the newspaper.  Certainly there might be issues with the joint operating agreement and the weird joint Sunday edition, but they can be end-rounded, I am sure. City officials and the community want to see something survive.

The reason to do this is to help the future of the brand online. Otherwise, it will be hard for the Internet version to survive. The brand needs something print connected to it. If the P-I disappears, that ad revenue will not necessarily go to the Times. Even one-newspaper-town dailies are struggling.

This move has a precedent:

1. A weekend paper has the greatest revenue of all.
2. The paper can have a life as an ad distribution vehicle, that is separate from the news value of the paper.
3. The print edition once a week will help to promote the Internet site.
4. British newspapers have a tradition of separate staffs of the daily newspaper. Some even have different graphic identities. London Weekend Television was a separate network just broadcasting on the weekend. Weird, but it works.
5. The P-I then becomes a bit like an alternative weekly. This can provide reasonable competition to the daily, if the reporters are scrappy enough.
6. After the daily print operation is shut, then there is a reasonable possibility that the paper could consider a launch of a free daily edition, or some other small-scale niche papers.

Not only does it provide exposure for old brands, it helps give the aging “legacy” brand a new chance at relevance. Sometimes, the old uses for brands disappear. Witness McCall’s, which disappeared as a magazine when it was renamed Rosie. But McCall’s dress patterns are still around.

We have some ideas of our own for brand extensions. We hope readers will add their ideas to the end of this story. While we’ve had some fun with this, there is a serious point. Your company’s intellectual property might be more valuable than  you thought.

Extreme Makeover From Sears. Even though we are very annoyed at the extravagance of the houses that are given to poor folk on Extreme Makeover, the show is fascinating. Because Sears is a partner with the show, why not take it in the other direction? How about Sears selling Extreme Home Makeovers for the regular house. It could license some of these sorting and organizing folks, yard maintenance companies, appliance repair and 1-800 junk into a one time package where they come for $1,000 bucks and clean up the yard, deep clean the house, reorganize the furniture and clean out the closets to give to the Salvation Army. What a great cause. Each “package” could also include a new set of Sears towels for the bathrooms, and a few new things elsewhere. There would be two audiences for this. First would be the foreclosure house industry, which has the obvious need for quick fix its. And second would be the anniversary. How about giving a Sears Extreme Makeover for your wife for an anniversary present? And then when the place is cleaned up, it will leave a spot for new appliances, curtains, sheets, towels and the like from Sears.

Sprite Tree: I have a tree in our yard in Sarasota that grows lemons and limes. It is called a fruit medley tree, and it is WAY cool. I think everyone in Florida, Texas and California should have one. Not only are they fun, but they make great cocktail hour conversation. However, fruit medley is a stinky name. How about a Sprite lymon tree? We thought that was an invention of Coca-Cola advertising, but it could be real.

Oldsmobile Switcheroo Kit: I am eternally frustrated that I cannot buy an Oldsmobile that is new. This is especially frustrating because the Saturn line from General Motors has an Oldsmobile feel. Indeed GM is trying to reposition Saturn to the Oldsmobile crowd. So, why doesn’t GM sell a quickie Olds conversion kit that can be done in the dealership. The front badge and side letter of the Saturn Aura could instantly change into an Oldsmobile Delta 88 or Oldsmobile Cutlass. GM would say that this is meaningless, that customers would not be fooled. I would argue the opposite. For years, General Motors did this sort of thing in the factory, and everyone across the nation knew of the similarities between GM’s divisions. It’s called badge engineering, and it is the second oldest trick in the automotive book, just after the assembly line.

Zenith Repair Service. This is the guy that you call after the Verizon or Comcast guy comes, and after you have bought a new Blu-Ray system. He will rewire the house, to make sure plugs are in the right place. He will properly hang and connect Hi Def televisions. He will show you how it all works in person. He will come around in a nifty truck, and make it all better. Best Buy and Circuit City have started up their own services, but this Zenith Repair Service would be a franchise for independent fix it guys.

Columbia Music Player. Sony has had a hard time with the MP3, and FINALLY they are getting around to using the Walkman name as much as before. We saw a great display at the Sony Style store at Mall of Milllenia in Orlando. But the Sony company also has equity in the Columbia brand, which is not only a brand related to records and CDs and music, but to music in general, including musical equipment and technology. The Walking Eye is one of the greatest trademarks of all time. It is gold, and Sony needs to use it. The use of Columbia by Sony does not diminish Sony; instead Columbia should appear as a sub-brand.

EIB Radio News: We listen to el Rushbo. And while Rush Limbaugh is young still, he cannot be replaced. We believe he will be remembered like Will Rogers. But that is not enough. His legacy needs to survive. How to do this? The EIB Radio News Network. Rush already has show producers who collect sound bytes, gather facts and help Rush with his show. Rush needs to take the next step, and set up a niche news operation. Your first thought is that why do this? There is already Fox News. Agreed, but it would be VERY powerful to have a set of EIB correspondents in Congress, the White House, UN and Wall Street. It should not be a big operation, but it can carve out a niche that will survive long after Rush is gone. What would be more fun than to have EIB folks asking the questions at press conferences?

Reader ideas?

While the company is well run, and we like the new Fios, the brand is a bore. Furthermore, we liked all the regional Bell names. There is no reason why Verizon can’t be a corporate name, even a new business name, but just because a merged company needs the name Verizon, it doesn’t follow that the regional Bell (and other telephone) names that made up Verizon can’t still be used. There could be excellent uses for the C&P Telephone name, the New York Bell name, and even GTE. These brands could be used on product lines, or specific calling plans, even if the company remains Verizon. Thankfully, Verizon still uses the Bell logo on the back of some trucks, apparently to keep the trademark valid. This is smart.

But that is not the purpose of this post. With the start of competitive local dial tone service, a number of competitors have shown up. And what’s so fun about them is that they have used regional names as a way to make themselves INTENSELY local against the generic Verizon and Comcast, and all the invented brand names like Embarq and such. Like regional foods, or regional beers, regional telephone brands are still giving folks a sense of regional identity. In addition, there are some older regional telephone companies still around. Here are a few:

1. Hawaiian Telcom. This is the company formed from the GTE/Verizon local services. We love the logo with the dots, which resemble the islands of Hawaii. The best. Another great company in the Pacific is GTA TeleGuam, which provides service in the American territory of Guam. (Gosh, we love how that sentence sounds!)
2. Cincinnati Bell. Started out as the City and Suburban Telegraph Company; thankfully it still keeps the Bell moniker. It also serves areas other than Cincinnati. That is fine. People deal with that, and are proud to have a company that has been around since 1873, before the invention of the telephone.
3. Lincolnville Telephone Company. In Lincolnville, Maine. They have a nice logo of a telephone man on a pole.
4. Cavalier Telephone. In Richmond, Virginia, this company has been encroaching on the turf of Verizon, which was formerly known as the Chesapeake and Potomac Telephone Company, or C&P. Graphics are pretty lame, but the name, which harkens back to Virginia’s Cavalier history, wins.
5. Orlando Telephone Company Inc. A regional telephone company in Florida. They provide dial tone service in the land of the Mouse.
6. Alaska Power and Telephone. It’s a 50-year-old company in Alaska, and provides telephone service in the Arctic Circle. They have to serve customers by helicopter and snowmobile! Ring up Sarah; we love that they sell electricity and telephone service. Also in Alaska is Alascom, which is a subsidiary of AT&T. We hope they can keep that Alascom name, under the umbrella of the big AT&T.
7. Hargray is named after Paul Hargray, and serves the pretty areas around Hilton Head, South Carolina. Associations with the resort area give the brand a bit of oomph. Nice to have a utility company named after a real person.
8. KLM. No, not the airline, but a cool little telephone company that has 1,400 customers in Rich Hill, Missouri. Is it like Hooterville in the KLM offices? It used to be until fairly recently. According the website, the Deerfield area was still a “mutual exchange” in 1971 with “magneto service” but customers complained and 1972 “marked the end of crank telephones.”
9. Dixville Telephone Company. This New Hampshire telephone company doesn’t even have a website! Other telephone companies in New Hampshire include Bretton Woods Telephone and Granite State Telephone.
10. Iowa Telecom. It’s a fairly new company formed out of old GTE customers. The friendly lady at the top of this post is from the Iowa Telecom website.