Tuesday, December 11, 2007
In magazines, the haves and have-nots
This has been a tough year, and 2008 looks tough
By Lisa Snedeker
For the longest time, the fortunes of the magazine industry were predictable, rising when the ad economy was good, sinking when marketers cut back on their spending.
That started to change several years ago. Magazines began coming back from the ad recession that set in in 2001, but it was no longer a case of a rising tide lifting all ships. In particular, business titles and newsweeklies continued to struggle. It was a selective recovery.
A fundamental change had set in. The magazine business had divided into the haves and have-nots, those that saw their pages again fill with ads, such as the fashion titles, and those that continued to struggle for every ad.
The reality is that the magazine industry has been forever changed, and it's not just the result of competition from the internet.
Magazines are no longer a given for readers and advertisers. In these new, harsher times, they are having to set themselves apart as unique brands with passionate readerships that speak louder than mere numbers on sell sheets.
It's no longer a matter of competing against other titles in a category. Magazines must now compete against all other media, both for readers and advertisers, and with more media options out there it becomes harder by the day.
All this forebodes a nasty shakeout.
It's already begun. Indeed, 2007 saw a number of titles fold, many long-established, among them Business 2.0, Life, Child, Premiere, Stuff and most recently House & Garden, the 100-plus year-old shelter magazine published by Condé Nast.
Ad pages will almost certainly be down for the year, based on the most recent figures from September, with pages off 1.1 percent through the first nine months of the year and off 2.3 percent for the third quarter alone.
Year 2007 will also likely see the least new magazine launches in years, around 750, well down from the 1,065 in 1997, one of the last boom years, or for that matter the 901 that launched in 2006.
Funding for new titles has gotten scarce, both on the part of major publishing houses and the deep-pocketed private investors who had long been drawn to the glamour of publishing.
Magazines have lost a lot of their glamour. Big money is now investing elsewhere. As Samir Husni, the University of Mississippi professor who tracks magazine launches, put it so succinctly to Media Life over the summer, "The industry has entered a dark tunnel. The only thing they can see is the train coming."
Year 2008 promises more of the same. On the downside, more magazines will fold. We will likely see shakeout in weaker categories, such as celebrity and teen titles, which media people have long believed are overcrowded. Fewer new titles will launch.
Overall ad pages will continue to shrink, and the business and personal investing categories will continue to struggle, as will the newsweeklies.
We will also likely see magazines cutting their circulation. That's one prediction of media planners and buyers in a recent Media Life poll. Media buyers see that as the big trend to look for in 2008.
It certainly makes sense.
Hefty circulations become increasingly costly to maintain with the rising costs of adding new subscribers and printing in general. But there's also a notable trend among media buyers away from quantity--how many readers a magazine claims to have--toward the quality of that readership, and how committed they really are to that magazine.
This is not new. It's a trend that's been building over a number of years. What's new is the will among publishers to act on it by slashing away marginal readers. In late 2006, Time magazine chopped its rate base from 4 million to 3.25 million.
Rate base cuts will be a positive for magazines.
There will be others positives in 2008.
We will see the launch of more regional titles, reflecting the continuing diversification of local media markets with the further erosion of newspapers' dominance of those markets. Local magazines have done very well in recent years, and they continue to do so even with the troubles plaguing real estate, a huge ad category for them.
We will see more specialized titles aimed at unique, clearly defined readership bases. The enthusiast titles have long done well, weathering a lot of the erosion that's afflicted general-interest magazines. They've done well because they have strong, devoted readerships.
In 2008, we will see more bold moves to introduce change to how magazines are sold to advertisers, such as Time's plan, announced at the time of its rate-base cut, to offer advertisers the option of buying pages based on its total audience of nearly 20 million readers, rather than circulation.
The idea was to begin selling magazine advertising the way television is sold, and media buyers at the time applauded Time and publisher Ed McCarrick for advancing the idea, even as they predicted resistance on the part of the buying community.
We will see magazines do a far better job of integrating their web and print editions, both for readers and advertisers. Publishers have gotten a lot smarter about how the web can help build their print brands, which is for the good.
We will see publishing launching online-only publications, as Felix Dennis has done in the UK with Monkey, a title aimed at young men.
We could also well see in 2008 some very interesting new print magazines launching.
As much as this harsh new climate has discouraged a number of launches that might have gone forward a decade ago, there will still be entrepreneurs out there who will dare push forward with big ideas, and their chances of succeeding are no worse now than a decade ago.
We could well see really smart new launches coming from the big publishing houses as well. Among the big launches last year was Condé Nast's Portfolio, and it launched against huge doubts, as yet another business title in an already overcrowded field. By all accounts, Portfolio is doing well.
If anything, turmoil in any market creates opportunity, and the turmoil in magazine publishing will encourage new ways of thinking that would have been dismissed in more stable times.
Lisa Snedeker is a staff writer for Media Life.