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Magazines Rethink Strategies to Deal With Economy

Like many other American businesses, it’s the worst of times for magazine publishers. The question is: Can they bounce back — and how?

By
with contributions from Irin Carmon, Amy Wicks
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Publishers also need to reevaluate circulation and distribution. Playboy this year cut its rate base to 2.6 million from 3 million, and Bauer Publishing said it would cut the rate bases on celebrity weekly titles In Touch and Life & Style, which sell most of their issues on newsstands. In Touch now will have an 800,000 rate base — down from 1 million — and Life & Style will reduce to 400,000 from 550,000 as sales for both titles have fallen dramatically in the last year.

More rate base cuts are to come, said buyers. “It would be a good idea for magazines to reevaluate their current circulation levels and bring them down to more natural levels,” said Robin Steinberg, Mediavest’s senior vice president and director of print investment and activation. While this might eat into page rates for magazine ads, it also helps to manage printing and distribution costs more efficiently.

Another move to consider: scaling back publishing schedules. Witness Portfolio’s move to a 10-times from 12-times annual schedule, U.S. News & World Report’s change to a monthly publication from biweekly and Playboy saying it will combine its July and August issues into one. PC Magazine announced a more drastic change — moving to an all-digital format next year, after reducing its frequency from 25 issues to 12 this year.

Some also believe subscription prices should increase. Samir Husni, aka “Mr. Magazine” and chair of the journalism department at the University of Mississippi, said magazines should go back to the model “where [they] depended on circulation for revenue and advertising for gravy. If you’re willing to give Newsweek for $10 [a year], don’t sell it for $5 on the newsstand and complain that your newsstand is down.” He pointed to the success of The Economist (average subscription price, $98 — and few discounts) and People ($101). There’s also the piecemeal model — Maghound.com allows readers to sample several magazines for a few month at a time for a flat price.

These tough times also provide an opportunity to assess some of the often-expensive means of acquiring new subscribers. Magazines no longer need to rely as much on high-priced direct mail, with subscriptions coming in through their Web sites, and some titles have experimented with reaching an audience wherever it might find it. Real Simple, for example, has been aggressive with its retail partnerships with Pottery Barn and The Container Store. Contests and in-store workshops get out the brand and reach possible readers with attractive subscription offers — and can yield new advertising.

Some also believe that Time Inc.’s paring of 600 staffers, Hearst Magazines’ companywide layoffs and Condé Nast’s shrinking by 5 percent of its employees signal a trend of publishing companies making do with smaller staffs. “The reason why you’re seeing this is all the fat that was in the walls of these companies is now being extracted, and it’s getting more lean,” said one media agency executive.

No matter what happens next year, publishers see this as a ripe time for reinvention. Pointing to the economic contractions of 1991 and 2001, Hearst’s Clinton said: “I see this as one of the cyclical downturns as we’ve seen in the past, and it gives us a moment to make moves, to consolidate, to right size, to do innovative new things, to be bold and test new ideas.”

And even if the industry’s pains continue through next year, magazines won’t go the way of the 8-track tape. “There’s something about that magic of discovery when you open a book, especially [in] fashion, when you see that new dress of the season — I don’t see that going away,” said Mediaedge:cia’s Janson.
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