Terrie Lloyd pulls out of paper publishing

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Terrie Lloyd’s love affair with printed paper has not ceased, but his financial involvement has, or shortly will. After nineteen years in the magazine publishing business, Tokyo’s charismatic entrepreneur from Down Under is pulling out of paper media altogether. I met with Terrie to discuss his decision and the state of the English language print media business in Japan.

The print publishing model worked well through the early 2000s (assuming you ignore the ups and downs of the ordinary business cycle). I know because I was publishing ESN Magazine during that period. ESN was a free distribution (printed) trade publication that covered Europe’s computer industry. It, along with an Italian consumer magazine publishing company that I held interests in, were both profitable when I exited them at the beginning of the millennia. Then, the Internet was still in its infancy and few publishers were making money off the web. As a case in point − it was easier for ESN to sell a $5,000 full page advertisement in our print publication, than it was to sell a $ 500 digital advertisement, even though our digital media had a circulation three times that of our paper publication.

That did not stop venture capital from rushing into dot-com startups, at a time when most dot-coms lacked any clear business model. The dot-com bubble finally burst in March 2000. The technology sector contracted and advertising budgets got slashed. Dot-com startups disappeared overnight − as did about 35% of ESN’s advertising revenue.

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In Tokyo, Terrie Lloyd had been publishing a computer magazine of his own called ‘Computing Japan’ (which was morphed into ‘Japan Inc.’ in 1999). Like ESN, Terrie’s print publication took a beating when the bubble burst. “The publishing business and anything to do with new media in particular went into hibernation for about three years,” says Terrie. It wasn’t until 2004 that the Japanese economy started to revive.

During the post dot-com revival in 2007, Terrie bought Metropolis Magazine from its founders, Mark and Mary Devlin. Metropolis is a well-known biweekly Tokyo city guide. Printed in English, it is distributed free to companies, embassies, hotels, bars, and restaurants. It serves a core market of 50,000 – 80,000 Westerners living in Japan. At its peak, Metropolis’s print circulation was 40,000 copies.

According to Terrie, the Lehman shock of 2008 proved to be a defining moment for Metropolis. Lehman Brothers had been a money-spinning engine for the Tokyo economy. Until its collapse, “Young traders would drop ¥500,000 per night in the clubs of Roppongi,” says Terry. “That money trickled through to the entire economy. When they shut, foreign companies began squeezing and crunching down.”

A bloodletting among the foreign banks followed in 2009. Foreigners working within Tokyo’s financial community responded by moving to Singapore and Hong Kong. Just as Metropolis’s advertising revenues recovered, the 3/11 earthquake struck. “That was a one-two punch,” says Terrie. More foreigners left Japan. Metropolis’s advertising sales took another hit.

While financial and seismic shocks were rocking print media’s top line sales, the industry itself was undergoing disruptive transformation from within. Digital media began taking market share away from traditional print media.


According to Statistica, Google’s worldwide digital advertising sales grew from almost nil in 2004 to an amount greater than all the advertising spent on US newspapers and magazines by 2012. Simultaneously, a major cultural shift took place: Large corporations replaced the position of ‘Print Media Buyer’ with that of ‘Digital Media Buyer’. Youngsters filling these new positions were about as familiar with traditional print media as they were with audiocassettes. Print media advertising suddenly became much harder to sell.

Terrie, along with many other publishers, then sped up plans to expand the digital sides of their businesses. In 2010, Terrie started the software company, MetroWorks, largely to support Metropolis’s print publication. According to Terrie, Metropolis had stayed in business because it had a digital aspect to it. “Digital is about 30% of Metropolis’s revenues,” says Terrie. “I could not have published Metropolis as a standalone English magazine. I don’t know any other publisher who is making money out of their magazines. Nobody.”

Terrie ran through the math to publish a 32-page print edition of Metropolis in Japan today. According to Terrie, the average revenue per page of advertising is about ¥150,000 against costs of ¥200,000. The result is that Metropolis cannot survive as a standalone businesses.

Many sectors of publishing are now better served through digital media. Classified advertisements, for instance, are better served by online search engines and classified websites, like Google and Craigslist. The news has also gone digital. Increasingly, younger people are getting their news free from social media smartphone apps, like flipboard. Flipboard allows people to graze mostly free news articles, ‘on the go’, from websites that come recommended through ‘friends’.

The reality is that many printed newspapers, having lost both advertising revenues and paid circulation, are struggling to adapt to the new digital world. “The Japan Times,” Terrie says, “would be out of business tomorrow if it were not subsidized by parent company Nifco Inc., a leading maker of plastic fasteners.” Toshiaki Ogasawara (chairperson) and his daughter Yukiko Ogasawara (vice-chairperson) take a special interest in managing the iconic, trophy brand.

Newsstand consumer magazines have performed better. While digital media is best suited for people who search with intent, consumer magazines allow people serendipitously to explore content of interest. People love to finger through glossy pages of print magazines like Cosmopolitan and The New Yorker. Terrie correctly notes, “Paper can’t be ignored. If it is put in front of you, it’s a natural human reaction to open it up and look at it − if it has any attractiveness and relevance at all.”

Brands continue to advertise in glossy magazines and consumers continue to buy them. Income from the sale of advertising and newsstand sales are the two engines driving the continued economic viability of newsstand consumer publications.

Free narrowly distributed printed magazines like Metropolis, however, can no longer operate profitably as standalone businesses. It therefore did not come as a shock to learn that Terrie had “relinquished control” over his interests in Metropolis’s printed edition in October 2012. According to Terrie, the same management team publishes the paper magazine, but Terrie is no longer the publisher. Following the same logic, Terrie is or will shortly cease his publication of the American Chamber of Commerce in Japan Journal (the ACCJ Journal). After he does so, he will have pulled out of paper media altogether. “Personally, I love paper. I am extremely regretful about having to do it, but I don’t see any future in paper,” says Terrie.

Terrie’s exit from paper media leaves him fully focused on his digital interests − a wise move for a publisher in an increasingly digital world.

Terrie Lloyd






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