Friday, February 08, 2008

Things aren't so bad at the newsstand

Things aren't so bad at the newsstand
For all the shakeout talk, celeb titles are holding up
By Diego Vasquez
The Audit Bureau of Circulations will release numbers for the final six months of 2007 on Monday, and already there's word that circulation for celebrity magazines continues to slow. After years of boom, and the addition of several titles to the category, these magazines are now seeing their numbers either slow or actually fall. Part of that is no doubt due to an increase in cover prices for two of the newer magazines, In Touch and Life & Style, which announced yesterday that they are cutting their rate base. But media people have also begun wondering whether a shakeout is on the horizon, as other categories such as lads, shelter and teen magazines have seen recently. Another issue getting buzz among print buyers as the ABC numbers loom is Wal-Mart's recent trimming of its magazine list, unloading a number of prominent titles from its shelves. The retailer is one of the country's biggest magazine sellers, though the effects of that decision won't be seen until the next measuring period. John Harrington, editor of The New Single Copy, which tracks newsstand sales, talks to Media Life about celebrity titles, Wal-Mart and why things don't look as bad as they might first appear.

Circulation numbers are due out from ABC on Monday, and there are rumors that some celebrity titles, like Life & Style, are going to take a hit. Are we finally seeing the saturation of this genre?

Well, now don't forget that In Touch and Life & Style raised their cover prices by 50 percent, and there's no question that that's going to cause a hit. It's a significant increase. They used to promote their low price, but now that's missing.

My understanding is that In Touch seems to have been hit less and is recovering, and in fact one of their recent issues is one of the best it's had at the newsstand.

I wouldn't ever take it so far as to say we're finally seeing saturation, we may need more evidence to make that statement. Us Weekly has some good numbers, as does OK!. There's a little softness, but nothing outrageous when you consider their positions.

Do you expect a shakeout in the celebrity category?

I don't think there's enough evidence to say the category is ready for a shakeout. It's still the leading category and generates the most sales at the newsstand.

OK! has seen some circulation growth over the last year, though the publication has reportedly lost more than $80 million. Do you think their policy of paying celebrities for their stories will ultimately prove to be a smart one, or is the magazine still in trouble?

They've had newsstand growth the last two periods, despite the fact that they've also raised prices by 50 percent. My understanding is they took a hit at the beginning, but they did some promotion and expanded their coverage, and there is newsstand growth. So that indicates they're starting to find an audience.

Regarding the policy of paying celebrities, everybody's been paying for photos, or something, at some point. How it works into their overall economics I can't tell you. But as far as newsstand goes, their news is good news.

A lot has been made of Wal-Mart's recent decision to cut some titles from its newsstand. Will this have much effect on the magazine industry, or is it a matter of perception being worse than reality?

Well, I think it's less than meets the eye.

They lowered their list by a lot, but there are a couple of things to keep in mind.

First, the remaining titles represent about 98 percent of their sales. So most of the titles that they took off were ones that were deadwood on their list. They either weren't selling or had low distribution. And some magazines had actually been discontinued prior to that time.

So that brings the list down to between 1,100 and 1,200 titles, and that's probably in the same range that larger supermarket chains were already at. So, like I said, it's less than meets the eye.

The other part of that is Wal-Mart, on a broader basis than just magazines, has been on a highly publicized effort that's a part of the whole green movement.

It's certainly an issue for them; three or four months ago they issued a statement to the magazine industry that said they wanted to increase sales efficiency to 50 percent and still increase overall sales by 5 percent. So, that whole reduction of the list falls into that same movement. What they call it in quotes is their "sustainability initiative," and it applies to everything in the store.

At this point there's not a reason to think this will have a negative impact on magazine sales.

What categories have seen the biggest circulation changes, in single-copy sales, over the last few years? What does this tell us about these categories?

To tell the truth, I'm not sure there's been any major shifts.

There's been growth in the women's' categories and some falloff in the men's category, especially if you're talking about the laddies books, but on the other hand I think the other end of the men's business has been pretty solid, so I don't know that it's a notable shift.

Some of the women's service magazines have done well in the last year or two, though a few of the years leading up to that were soft. But that's probably shifted to the more style magazines, like Oprah or Martha Stewart Living.

Other than the continued strength of the celebrity category, there hasn't been any significant overall shifts.

With the number of checkout pockets decreasing, what has been the competitive effect on magazines?

Again, I'm not sure there's a significant falloff in checkout pockets.

Some people in the business may actually say there's too much in checkout, as in there're too many choices. Now, there are some things going on where other products are getting aggressive about checkout space. But I'm not sure that's really taken hold yet.

If you look at the numbers on most of the magazines that are considered checkout titles, it's a mix, but I don't think their overall sales have moved significantly over the last four, five or six measuring periods.

Everyone's concerned about it, but I'm not sure there's an overall trend that can be identified.

Diego Vasquez is a staff writer for Media Life.

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