Are business newsletters going the way of the Ice Capades? (Industry Analysis).

Editor's note--Anyone who knows Fred Goss, or regularly reads his DM Notebook column, knows that he and his wife are faithful fans of international figure skating. In this article he draws upon his expertise in both that field and the newsletter industry.

NL/NL editorial advisory board member Frank Joseph laments that we "may never again see the days of the money machine" for business newsletter publishers, that direct mail may never be the same.

As we get older, it's easy to think things ain't what they used to be, but Frank may well be right, and he was there for some of the glory days--first with Observer Publishing one of the most successful Washington publishers in the 1970s, and then as a founding partner of United Communications (UCG). When, as he said, they'd drop a big mailing they'd open the office doors and stand out of the way as the orders poured in.

I tend to agree with Frank, but I may be the first (and perhaps only) industry observer to draw a parallel between business newsletters and the Ice Capades.

Ice Capades had more than a 50-year run as American popular entertainment, sometimes two or three companies toured the country from the early days of World War II to the mid-1990s. There is scarcely a person of a certain age who doesn't remember going to see the Ice Capades. I'm sure the promoters assumed they'd be around forever.

They had a formula for success:

* Olympic medal winners for the real skating fans,

* Cartoon characters for the kids,

* Baggy-pants comedians, magicians, even dog acts for "everyone" (those people had to do something between gigs on the Ed Sullivan Show),

* Scantily clad showgirls for the bored dads.

Business newsletters had a formula as well:

* Find a niche subject not covered well by general or trade media,

* Have enough good names available on mailing lists,

* Market heavily, several times a year, with the "standard newsletter package" offering a price discount and usually an editorial premium.

But in the mid-nineties, after more hairsbreadth rescues than the Perils of Pauline, Ice Capades finally went down for the final time-a victim perhaps of the decline overall of "wholesome, good-for-the-whole-family" entertainment.

They tried almost everything. The show had four different owners. They used big stars, smaller stars, and then big stars again. They changed the marketing philosophy. In the end, nothing worked.

The one thing, though, that they never did was change the basic product. Ice Capades 1993 looked a lot like Ice Capades 1943.

Are business newsletters heading down the same road? Publisher after publisher reports that sending out good direct mail pieces to good lists just doesn't work as it used to. Maybe it's market saturation. Perhaps competition from the internet.

Just ten percent reduction in overall renewals and new orders changes the picture from steady growth to steady decline.

I don't have the answers. As Henry Blake once said to Hawkeye on M*A*S*H, "If I knew the answer to that, I'd be at the Mayo Clinic. Does this place look like the Mayo Clinic?"

If one definitiion of insanity is doing the same thing over and over again and expecting different results, a newsletter publishing corollary might be continuing to do the same things, experiencing different results, and deciding the answer is to "work harder."

Perhaps the Harvard Management Update put it more elegantly. "Companies that fared poorly during the last recession exhibited a common response: they overreacted, then 'stayed the course' even when tougher seas lay ahead.

"The lesson? If your strategy isn't showing results, reevaluate it. Don't expect it to start paying dividends just because the economy is recovering."