Well, I wasn’t expecting that.
And I bet the news that Dovetail is folding up its tents and melting away will have been a shock to its dozens of independent magazine clients for whom it provides subscriptions fulfilment services (to say nothing of the scores of employees – Dovetail is a considerable local employer).
The company was a joint venture of Dennis – who had previously held their subs at Customer Interface in Somerset – and Immediate, who inherited BBC Magazine’s involvement in Galleon. They merged to become Dovetail (geddit?) around ten years ago, partly to help fund the investment needed and partly to reduce the overcapacity that existed in the fulfilment market.
As well as the 1 million+ active subs records from Immediate and several hundred thousand from Dennis, Dovetail managed the files for a large number of independent (i.e. non-partner) publishers such as Private Eye, Imagine, the Tablet and Investors’ Chronicle.
But this is a low-margin, high cost (and thankless) business; the pace of necessary investment grows as do the threats from a disruptive newcomer. The investment is needed in dynamic systems that can deal with the multi-faceted subscription model that now pertains; systems that are flexible enough to deal with interactions as yet unthought of. Dovetail spent years (and probably millions of pounds) on developing a state of the industry subs system called Dove, but its functionality kept being outpaced while still in development. (Many of the Dovetail records are still on legacy systems that were out of date ten years ago, and which are kept alive by teams of developers.)
And this is against a backdrop of falling sales, reduced product ranges and merging (or attrition of) publishing companies. The overcapacity in the bureau market that provoked the merger that formed Dovetail was still there when I organised a round table discussion at iSubscribe in 2013, as was the existential threat to the bureaus.
Publishers did recognise this. Most knew that they had screwed their suppliers so tight that they were restricting investment and damaging those suppliers’ prospects of survival, but magazine publishing tends only ever to think in the short term, and if costs are down this year then hey, the future can look after itself. (The noise you can hear is a battery farm of chickens coming home to roost.)
So we will see who picks up the prizes from the Dovetail demise and what the bureaus charge the publishers for the privilege. There are a lot of companies now looking for fulfilment homes and the bigger bureaus aren’t going to want all of them, because in many cases the work involved with small companies is just not worth the revenue. QSS, DSB and CSD will be chasing the bigger clients (Jim Bilton, wise man in these matters, says Immediate will go to DSB and Dennis to QSS) and might try using this brief window of panic to increase their rates to others. Cloud-based operations like Zuora, while far from a good fit for the UK market, might prove tempting to publishers who don’t want to pay for what they consider to be ‘over the odds’ at the traditional bureaus.
For a period then, the bureaus will be able to flex some muscle, but it’ll be a short-lived triumph as the removal of one player doesn’t change the underlying dynamics, which is a market contracting swiftly and evolving rapidly.
(At the risk of being cathartine*, if you want some advice on what we might euphemistically call bureau transition, drop me a line. I’ve swapped subs houses with a variety of different types of publisher over the years. Donbrown@thebrownconsultancy.com
*cathartine – like or pertaining to vultures. See, you get education as well as erudition from this blog.)