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Magazines – Intro

Intro

Serious questions for the magazine industry come out of 2005.

It was a troubling year for advertising. Despite a relatively strong economy, ad pages were up only .5% for the year. Large-scale layoffs hit some major publishers, with Time Inc. cutting 105 people, Business Week cutting 60 and U.S. News and World Report laying off senior writers and announcing it would be turning more to Web publishing in coming years. One publisher, Gruner and Jahr, sold its properties and left the U.S. market.

And the bad news showed no signs of abating. In January of 2006, Time announced the layoff of 100 more employees and, like U.S. News, the company said one of its goals was “freeing up more resources for the Web producers at Time.com.”

For news people there is more bad news. Time, Newsweek and U.S. News continued to lose circulation in 2005. Time and Newsweek both saw double-digit drops in ad pages, in part because of the slump in the auto industry.

Still, there were bright spots. The celebrity magazine field, which seemed so full it had no room to grow, grew again at a rapid rate in 2005. Advertising and circulation figures stood in stark contrast to the industry as a whole, with some titles seeing double-digit growth in both areas.

And even the news field had some positives to report. The Economist and the New Yorker continued to increase circulation. And The Week, a weekly summary of news in other publications that was launched in 2001, took off. Its circulation is growing dramatically, and the growth in its ad-page and revenue numbers is not just far above other news titles, but far above the industry averages as well.

For news titles in particular, the questions coming out of 2005 have to do with what is next. The Week’s growth presents an interesting dilemma for the mainstream magazines. Its format, which relies on accounts from other publications, is inherently cheaper to produce than a format based on bureaus and correspondents. Can the mainstream titles compete in that market? And as circulation grows at the Economist and the New Yorker, is it possible that the mass, broad-topic news magazine simply isn’t going to be dominant in the future on the news side? Is the news market itself segmenting and, if so, where does that leave the Big Three news titles?