By Richard Wanderer, Magazine Consultant and 50-Year Media Vet; Author, The Holiday Party (A Tale of a Corporate Takeover), published by iUniverse; Member, California Bar
Recently, I attended a seminar entitled “Social Media Essentials.” The presenter knew the subject matter extremely well. The various social networks—MySpace, Facebook, Twitter, Friendfeed, Que Pasa, Linkedin and others—were well described. But suddenly, when the lecturer said that these networks were putting an end to magazines, I knew how little the lecturer knew about magazines.
PR people almost always interface with magazine editors, but hardly ever with the two main revenue sources that keep magazines going—circulation and advertising departments—so this information could be enlightening. Certainly, strength in magazines and their continued viability is essential to PR people doing their jobs.
Today, in the year 2009, the time of great economic crisis, John Harrington, the editor of The New Single Copy, reported that 25 million individual copies of magazines are sold at full price on newsstands across the U.S. every single week. This translates to 1.3 billion copies of magazines sold annually on newsstands. And newsstand sales make up the smallest portion of the total sales of most major magazines, since most heavily depend on subscriptions for the major portion of their total sales. Therefore, combining newsstand and subscription sales together, billions of magazines are sold annually in this country alone.
Over the years, magazines have faced a number of crises, yet they’ve overcome them all.
First there was the crisis of circulation believability. Advertisers in the early 1900s often laughingly referred to circulation managers of magazines as “circulation liars.” This problem was remedied by the forming of the Audit Bureau of Circulations in 1914. It established a uniform system of circulation measurement upon which both advertisers and magazine publishers could rely. One of the strong forces responsible for bringing this auditing advance about and helping establish the Bureau was Emery Mapes, the then ad manager of the Cream of Wheat Company. He won a New York case against the Arthur H. Crist Company and their American Motherhood magazine. He established the publisher “under delivered” on the circulation guarantee for which his company was charged. Mapes used his own personal audit to prove this. As time went by, the Bureau developed highly sophisticated means of measuring circulation delivery.
Then in the 1950s, when television networks first became a huge factor, many general editorial magazines felt, as a matter of preservation, they had to match the reach of TV networks to be competitive. Multi-million circulation general interest magazines sold hundreds of thousands of subscriptions at huge discounts to build their total audiences. This business model lost money on circulation when the ad revenue they expected didn’t come through and ultimately, they went out of business. Nevertheless, the magazine industry still survived with other magazines that were more pinpointed to special interests or towards specific demographics and both TV and magazines still thrived.
The problem for a number of magazines today, though they are extremely strong in their specifically targeted editorial directions, is that they have kept the circulation business model that led to the demise of some big magazines in the early TV Network era. They rely extremely heavily on advertising revenue to make them profitable while, by design, lose money on circulation. Thus, they charge very little for their subscriptions in order to increase their audience size and be able to charge more for their advertising rates.
This has left some unprepared for the temporary impact of the current economic recession. All one has to do, in order to see how strong a magazine’s circulation really is, is look at the uniform Audit Bureau of Circulations Reports and you can quickly determine by analyzing factors such as: The percentage of a magazine’s sales sold at full price on the newsstands; the newsstand cover price of the magazine; and the amount a magazine receives for an individual subscription. Rather than selling magazines at unprofitable subscription rates, it might be better for some magazines to increase the amounts they charge for subscriptions, which some are now doing, even if they are selling fewer subscriptions and find new promotional ways to increase their newsstand sales in order to be on stronger financial footing.
Interestingly, because of their high cover prices and high percentage of newsstand sales, some smaller national magazines like the Harvard Business Review or Foreign Affairs actually generate more newsstand circulation revenue per issue than a number of larger major magazines with four to five times larger circulation rate bases. Obviously, these smaller circulated magazines are often in stronger profit positions during economic times like these.
Almost every major magazine has a website platform today. One of the ways for magazines to benefit from these sites, as many are now doing, is to introduce editorial content different than what appears in the magazine itself. In this manner, new readers are being introduced to the publication’s editorial concept and a desire can be created to read the hard copy magazine itself. Interestingly, every advertiser in a magazine, when they list their website in their advertisement, is really always given two ads for the price of one—the ad the magazine reader sees on the page and the directions to go to their website for more information. This, too, is one of the unique features of print. Through the use of a magazine’s online banners, advertisers could now experiment with the use of Twitter to get feedback on their advertising. Of course, with the “letters to the editor” feature, magazines have always been and continue to be interactive with their audiences.
Samir Husni, professor of journalism, the Hederman Lecturer and the director of the University of Mississippi’s Magazine Service Journalism program, said in 2005, referring to the number of magazines published in the ’70s and early ’80s, “We have now three times the number of magazines that were offered for sale back then and the number continues to growcontent will change. It did. It is changing and it will continue to do so.” Nina Link, president and CEO of the Magazine Publishers Association, has been quoted as saying “Magazines are using technology to deepen their relationship with their existing readers and to introduce themselves to new readersBecause magazines are trusted, recognizable and targeted communities of interest, they have the ability to connect with people across a wide range of delivery systems.”
As one wise man once said, “As long as there are trees in the forest, there will be magazines.”
Richard Wanderer is a magazine consultant with more than 50 years of experience in the magazine business. He’s also the author of new book, The Holiday Party (A Tale of a Corporate Takeover), published by iUniverse, and a member of the California Bar.