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Magazines: Are Hopes for Tablets Overdone?

By Katerina-Eva Matsa, freelance journalist Jane Sasseen and Amy Mitchell of PEJ

Consider it a sign of the times: when Time Inc., the country’s largest magazine publisher, went looking for a new chief executive officer last year, it turned to an expert in digital advertising. In December 2011, Time named Laura Lang, then head of digital ad firm Digitas, to run its magazine operation. Lang had no previous background in magazines.

As with everyone in magazine publishing, Lang will have her work cut out for her.  While the worst of the industry’s painful slide appears to be over, the difficult transition continues as readership goes digital.

Magazine publishers’ two main revenue sources remain in print –sales and advertising– and both fell again in 2011. Circulation revenues were lower, as were the number of print ad pages sold.  The weak economy and the shift to digital share the blame.  So far, most magazines are not capturing enough of the growth in digital to make up for what is disappearing from print. The industry’s digital revenues, while fast growing, are just 5% of the total, lower than in newspapers. (See Newspaper Essay for more) There are exceptions, though, which may point the way for others. Four years after launching an aggressive strategy to prioritize digital, The Atlantic announced that it earned more from digital advertising than print ads in the month of October.

Readers, meanwhile, are migrating fast to digital and mobile, a move that accelerated in 2011 with the explosion of tablets and smartphone ownership. Thanks in part to the popularity of apps such as the Apple Newsstand, which make it easy to find and download magazines and other publications, that acceleration is likely to continue.

The shift is bringing new opportunities for magazine publishers, along with an array of new financial and technical challenges. (See Digital section for more)

The good news for magazine publishers is that the newest mobile devices, particularly tablets, may provide a particularly good environment for magazines. Research shows that people read more long-form content on the new devices and that they spend more time on magazine apps specifically than with those of other media. (See Mobile section for more)

The bad news for magazine publishers is that the number of platforms they must compete on is proliferating.  Keeping up with the rapidly growing array of new technologies that consumers are adopting will require large investments, even as revenues show little or no growth.  While many magazine publishers believe tablet ads will eventually prove a lucrative replacement for print ads, it is far from clear when that will occur.  In the meantime, publishers are increasingly leveraging the power of their well-known brands into other arenas – events, e-commerce and even entertainment – in the effort to find the new revenues needed to ensure a strong future.

Industry Over All

The magazine industry started 2011 on a positive note, as advertising appeared to rebound in the first quarter. But the turnaround was not sustained. For the fifth year running, advertisers cut back on the number of print ads purchased and consumers bought fewer magazines in 2011.

Total circulation for the final six months of 2011 dropped 1%, a marginal improvement over the 1.5% decline in the same period the previous year.

While there is some evidence emerging that the growing popularity of tablets and smartphones will be a boon to the magazine industry, for now most still rely heavily on print. And the environment for magazine publishers there remains difficult.

Print subscriptions – one of the two major components of magazine circulation, along with newsstand sales — were essentially flat compared to 2010. They rose just 0.04% during the second half of 2011 at the 413 U.S. consumer magazines measured by the Audit Bureau of Circulations for which prior year’s data were available.

Subscription numbers provide only limited insight, however, since publishers can manage them by discounting pricing. Newsstand sales are seen as a more accurate barometer of the industry’s vitality.

On that front, the struggle was clearer. Single copy sales declined 9% in the second half of 2011 – the fourth year in a row that they have dropped sharply. (See data section for more)

SEE FULL DATA SET

The top 25 magazines did not do much better than the industry overall; two-thirds suffered circulation declines.

 The advertising picture, judging by the most reliable measure – the number of ad pages sold – fared even more poorly than circulation. After notching a slight uptick early on, total ad pages for the 213 U.S. magazines tracked by the Publishers Information Bureau fell 3.1%, to 164,225 for the full year.1

Ad pages fell in 9 of the 12 categories that Publishers Information Bureau tracks.2 (See data section for more)

One big culprit was the sluggish U.S. economic recovery. With consumers still reluctant to spend, advertisers pulled back. They also shifted more marketing resources to digital and elsewhere.3 In the hard-hit food and food products category, for example, Kraft cut spending on print ads by 39% even as it raised marketing spending overall.4

Another loser was automotive ads. Following big gains in 2010, automobile ad pages declined 5.7% in 2011.  The reason went beyond the slowing economy: Toyota and Honda cut back after the March earthquake and tsunami in Japan disrupted production, which allowed rivals to reduce their media budgets as well.  General Motors alone cut its magazine ad budget nearly 44% for the first nine months of the year.

Even in a downturn, some categories did well. Financial, insurance & real estate ad pages grew 12.7%, the strongest gain for the year. Toiletries and cosmetics ads rose 3.5%.

SEE FULL DATA SET

While the number of ad pages sold fell, there is evidence that revenues from digital operations finally began to make a meaningful impact at many consumer magazines. Though digital accounts for just 5% of revenues today, it jumped an estimated 15.7%, according to the market research firm Veronis Suhler Stevenson.

That helped end the industry’s three-year revenue slide in 2011. Total revenues at consumer magazines, including advertising, circulation and digital spending, grew an estimated 1.2%, to $20.9 billion for 2011, according to Veronis Suhler and Stevenson.

 

Over the next several years, Veronis Suhler and Stevenson projects further improvement, as print advertising recovers modestly and digital spending accelerates. By 2015, it estimates total magazine revenues will rise to $23.7 billion.

Elsewhere, too, the industry saw some much-needed stabilization. After four years of shedding large numbers of jobs, employment at U.S. magazines fell only 1.7% in 2011, according to Advertising Age’s analysis of recent Bureau of Labor Statistics data.5

SEE FULL DATA SET

Publishing companies also continued to invest. Some 239 new magazines were launched in 2011, according to MediaFinder, up from the 193 that debuted in 2010. And only 152 magazines folded during the year, a sharp improvement over the 176 that shut in 2010 and the 596 that died the year before.6

Among the more prominent new magazines: Hearst Corp., the publisher of such magazines as Cosmopolitan and Esquire, launched HGTV Magazine, a home-improvement and real estate publication, in partnership with cable channel HGTV.7 And in October 2011, Condé Nast launched a print edition of its Style.com fashion website.

The top categories for new magazines launches in 2011 were food, which boasted 25 new publications, and regional interest, with 20 new entrants.8 And despite the overall drop in advertising by food companies, magazines in this category witnessed the largest increase both in circulation numbers and ad pages.  The Food Network magazine alone reached record circulation of roughly 1.5 million copies a month, less than three years after its launch.9 It increased its circulation by 11% in 2011 and its ad pages by 11.5%.10

Acquisitions rose as well. Hearst paid French publisher Lagardère a reported $866 million for a portfolio of nearly 100 publications in 14 countries, including Elle and Car and Driver.11 It now puts out more than 300 editions around the world, including 20 in the U.S.12

Meredith acquired FamilyFun from Disney Publishing Worldwide in January 2012. The acquisition includes the highly popular magazine and related assets, including digital magazine apps.13 It also bought Everyday With Rachel Ray and the top food website Allrecipes.com from The Reader’s Digest Association.14

Still, the difficult economic climate, flagging print ad volume and the costs of investing in new technology took their toll on the four largest American magazines companies – Time Inc., Meredith, Hearst and Condé Nast. The two that are publicly held, Time and Meredith, saw no virtually no growth in revenues and, as in past years, relied largely on managing costs to keep profits up.

Revenues at Time Inc., the magazine division of Time Warner, came in at $3.7 billion, unchanged from 2010.15 Advertising revenues fell 1% and subscription revenues dropped 2%, although the declines were partially offset by an increase in custom publishing revenues. Thanks to a reduction in restructuring costs, however, Time Inc.’s adjusted operating income rose 10% to $580 million.16

The magazine publishing unit of Meredith, which owns women’s magazines such as Better Homes and Gardens, had a tougher time. Total revenues dropped 2% for the fiscal year that ended June 30, 2011; while advertising declined 5% and circulation slid 7%, an increase in sales of Better Homes and Gardens branded goods and strong digital marketing revenues helped mitigate the decline. Here too, tight controls on costs, primarily on processing, paper, and distribution, allowed operating profits to grow 6%, to $180 million.17

Things got worse, however, in the in the first half of fiscal 2012, which ended in December. As revenues continued to fall, operating profits declined 12%.18

As a private company, Hearst does not release detailed financial information. But in a year-end letter to employees, David Carey, the president of Hearst Magazines said that 40% of its revenues now stem from U.S. print and digital, while international produces another 40%. The remainder comes from services.19

With pressure on print advertising, magazines’ biggest source of revenue, expected to continue, publishers are intensifying efforts to create alternate revenue streams. Much investment is going into developing digital and mobile versions of their publications. But publishers also are trying to leverage their brands into other areas such as e-commerce, events, marketing, consulting – and even entertainment.

“The traditional model is coming undone, but we’ve got fans of our brand that we can serve in different ways,” said Scott Havens , senior vice president of finance and digital operations for The Atlantic Media Co. “If you have established a level of trust with your readers, you should be able to move them to other things; readers want exclusive access to other goods or services tied to the brand.”20

In August 2011, Condé Nast signed a deal with Fremantle Media Enterprises, the marketing arm of the production company behind reality TV hit American Idol. According to Advertising Age, Fremantle will work with three Condé Nast brands — Self, Golf Digest, and Epicurious — to develop linked consumer products and video instruction. The deal could also include TV.21

Two months later, the publisher also created a new division, Condé Nast Entertainment, and hired Dawn Ostroff, the former president of The CW cable network, to run it.  The longtime cable executive is expected to develop television, online and video programming culled from its publications and the people who write and edit them.22

Meredith also enhanced its e-commerce abilities. It launched a deal site within the website of Parents Magazine that offers users discounts on toys, kids clothes and other family products.23 It also expanded a partnership with Wal-Mart to sell furniture and housewares under the Better Homes and Gardens brand.24

Rival Hearst, meanwhile, expanded in digital marketing services. It bought digital ad agency iCrossing in 2010 and beefed up units that develop blogs, video, and other content for brands.25 In December, iCrossing itself acquired Red Aril, a data management company that helps advertisers and publishers improve their audience targeting.26 Hearst president David Carey says that roughly 20% of Hearst’s revenues now come from these digital marketing and fulfillment services—a business that has grown significantly the past two years.27

Digital

Those efforts will help diversify revenues. But publishers are putting most of their efforts into the digital space.

Readers have already begun a sharp migration. At Time Inc., 15% of readers now access content in digital form only, while 30% read both online and in print, according to the December 2011 American Magazine Study by Affinity Research. Other publishers show similar trends.28

 

SEE FULL DATA SET

The problem for publishers is that they take in little money from digital subscriptions. PricewaterhouseCoopers estimates that consumer magazines in North America collectively brought in just $4 million from digital circulation in 2011. Print circulation revenues, on the other hand, were $9.2 billion.

As publishers begin to charge for content online, those revenues could grow rapidly. By 2015, PricewaterhouseCoopers estimates that revenues from digital circulation will increase to $611 million. That will do little more than offset the projected decline in print circulation revenues of $445 million.29

As consumers continue to migrate online and adopt tablets and smartphones, digital advertising revenues are expected to rise as well. PricewaterhouseCoopers tracks only digital circulation. Veronis Suhler Stevenson tracks a broader measure for total digital and mobile revenues, including circulation, advertising and spending on mobile apps. It estimates those revenues will grow from $1.05 billion today to $2.3 billion in 2015. Digital revenue, as a share of total magazine revenues, is estimated to nearly double, to 9.9%.30

SEE FULL DATA SET

Mobile

If the revenue shift is slow, however, there is no mistaking the direction: the rapid growth of tablets, e-readers and smartphones is fundamentally altering the landscape for magazine publishers.

Tablet ownership grew nearly 50% in the second half of the year, to 18%, according to a PEJ study released as part of this report, while 44% of U.S. adults now own a smartphone. (See the special report for more)

Mobile has created significant new opportunities for magazine publishers – and new financial and technical challenges. Many magazine publishers believe tablet advertising will be key to rebuilding the ad revenues that have migrated away from print. Not only do tablet ads more closely mimic the high-quality visual experience of a magazine than do website ads. They also give advertisers the ability to add interactive features, potentially increasing rates.  But keeping up with the rapidly growing array of new technologies and platforms that consumers are adopting requires significant investment at a time when budgets are stretched tight.

The explosion of mobile may be particularly good for magazines: According to PEJ’s study “Tablet Revolution” released in October 2011, some 22% of tablet users report reading magazines of some kind on their tablet at least weekly. That is more than twice the percentage of the general population that regularly turn to a news magazine in print or online (8%) and seven times the percentage of the general population who said that of specialty magazines like The Atlantic.

A November 2011 study by the Association of Magazine Media also found high levels of engagement with tablet publications. Some 59% of survey respondents said they had increased the amount of time spent reading magazines online since buying a tablet; 66% said they planned to consume more digital magazines and 63% want even more magazine content in digital form.31

That potential is one reason why Facebook co-founder Chris Hughes purchased the New Republic in early March. In an interview with NPR, Hughes said he believed readers would increasingly turn to digital media for long-form journalism, because tablets allow them to “pause, linger, read and process very important ideas.”32

The top priority for many magazine executives in 2011 was building tablet apps – a desire fueled by Apple’s decision last spring to allow publishers to sell magazine subscriptions in iPads, rather than just single copies. In August 2011, for example, Time Inc. announced that it would put out tablet versions of all 21 of its magazines by year end, which it successfully accomplished. At the time, only its four biggest publications – People, Time, Fortune and Sports Illustrated – had apps. Hearst Magazines and Condé Nast made similar announcements.

Some 83% of magazine publishers responding to a survey conducted by the Audit Bureau of Circulations said they currently produce mobile content for smartphones, e-readers or tablet computers, roughly double the number two years ago. Magazines have been faster than newspapers or business publications to develop apps.33

 

SEE FULL DATA SET

The availability of magazines on mobile devices was also greatly enhanced in 2011.  When the iPad 2 was released in the spring of 2011, there were only two ways to access new issues and apps: iTunes and Zinio.  But following the introduction of Apple’s Newsstand in October 2011, and the later launch of the Kindle Fire and the Barnes & Nobles Nook with hundreds of titleseach, digital subscriptions and single issues are now far more readily available. In addition, social magazines like Flipboard, Zite, Pulse, Livestand and Google’s Currents offer tablet owners one-stop-shopping channels to sample magazine content.

Apple’s Newsstand has been the most successful of those apps. Although the number of publications on it is still somewhat limited, for many publishers who have chosen to go on Newsstand it has been little short of a game-changer. By making it easy to find publications’ apps and store them all in one digital bookshelf, the Newsstand created a huge spike in magazine downloads:  Condé Nast reported a 268% jump in digital subscriptions in the two weeks after Newsstand was launched. Bonnier, the publisher of Popular Science+ announced that it sold 3,900 subscriptions and 3,200 single copies in six days on the Newsstand. Before that, digital subscriptions had averaged about 75 a day.34

The Newsstand’s success has made Apple an almost unavoidable force in the publishing ecosystem. For publishers, there are several downsides with that as well. For one, Apple takes a 30% cut of all digital subscription sales.  And it refuses to actively share customer data with publishers on the readers who come to their magazine apps through Newsstand. The lack of that data, which is increasingly critical for digital advertising, appears to be the key reason Time Inc. has refused to sell its magazines through the Newsstand. Instead, readers who want its digital apps sign up directly with Time Inc. itself.

So far, that refusal does not appear to have hurt Time’s ability to attract readers to its apps. In August, it announced that its digital magazines and other content apps had been downloaded more than 11 million times. It also sold more than 600,000 digital single copies of People, Time, Sports Illustrated and Fortune. 35

Other publishers have also begun to benefit from the shift to mobile. Condé Nast reported that its apps drew 500,000 subscribers by September.36 And Hearst Magazines president David Carey told the Reuters Media Summit in November 2011 that it would have nearly 400,000 subscribers on various mobile apps by the end of 2011; with subscriptions increasing 10% to 15% every month, he expects to hit one million such subscribers this year.37

The survey by the Association of Magazine Media also highlights a new revenue opportunity –one that publishers have been quick to exploit. Some 55% of adults surveyed told the magazine association they like to read digital “back issues” of magazines on their tablets and e-readers. Publications ranging from The New Yorker and Popular Science to Martha Stewart Living have begun packaging special issues and selling back copies on mobile devices.38 For publications with popular evergreen content, such sales can make up anywhere from 25% to 40% of single-issue sales on the iPad.39 Hearst’s president David Carey noted in an interview with Mr. Magazine that “about 30 percent of our single copy sales are for issues that are no longer available for sale on ink and paper.”40

News Magazines

With all that as a backdrop for magazine generally, what is the role of the newsweekly in an era of 24/7 digital news and the rapid expansion of mobile devices? When consumers can get breaking news and even sophisticated analysis almost instantly, the willingness to wait until week’s end for the newsweeklies’ take on news and culture has, for many, virtually disappeared.  The rise of highly-specialized outlets such as Politico in the political arena, or TMZ in entertainment, has further eaten away the appeal of the traditional general interest news magazines that aimed, by definition, at a mass audience.

We have documented the shakeout of this sector over several years in this report. Yet these questions continue to change, presenting a challenge to the survivors in this space, including the winner in the general interest arena, Time, the revamped and sold Newsweek, and to a lesser extent smaller niche magazines such as The Economist, The Atlantic, The Week and The New Yorker.

The problems are currently most acute at Newsweek, which is still struggling to redefine itself and become financially viable under editor-in-chief Tina Brown nearly a year and a half after it was sold by The Washington Post and merged Brown’s web publication, The Daily Beast.  Time has had greater success so far at retaining a voice that connects with large numbers of readers, while the smaller players have each found niches that appeal to a more targeted segment of the audience:  The Economist, The Atlantic, and The New Yorker deliver smart, deeply analytic coverage, while The Week gives busy readers who still want a fast, aggregated digest of the week’s news coverage. But all will have to remain vigilant to ensure that their formulas remain relevant for readers.

Yet there was good news for news magazines in 2011: the worst of the multi year decline appeared to be over for the majority of the news magazines this report analyzes: Time, Newsweek, The Economist, The Week, The Atlantic and The New Yorker.  Circulation improved for most, as only Newsweek and The Atlantic lost readers. And while ad pages were down again, the drop was less extreme in 2011 than in the previous years. (See data section for more)

SEE FULL DATA SET

Both Time and Newsweek sold more issues at the newsstand in 2011 than in 2010. Thanks probably in part to the high interest in the upheaval in North Africa and the Middle East, and the deaths of Osama bin Laden and Steve Jobs, Time’s newsstand sales increased 6%. The October 17, 2011 issue with Jobs on the cover sold 165,000 copies, a 137% increase over the previous 12-issue average.41

As Brown began to put her stamp on Newsweek, it too benefited from a rebound. Newsweek’s single copy sales rose 2% in 2011, a big improvement over the 32.7% decline it suffered in 2010.

Still, such single-issue sales remain well below the levels achieved by both publications before the 2008 recession.

SEE FULL DATA SET

By contrast, the smaller news magazines suffered declines in single issue sales in 2011. The Atlantic saw an 8% drop at the newsstand, followed by The Economist with a 13% fall. The New Yorker and The Week did a bit better, with declines of 2% and 1% respectively.

SEE FULL DATA SET

The picture was reversed, however, when it came to subscriptions. The smaller publications did better than the traditional market leaders in selling base subscriptions, a number that helps set the rate they can charge advertisers. The Economist enjoyed the highest annual gain, at 3%.

SEE FULL DATA SET

The advertising climate for news magazines also continued to deteriorate. For the year, all the news magazines studied in this report suffered significant downturns in ad pages. As a group, they lost 5.6% compared to the year before, according to the Publishers Information Bureau. Newsweek, as it transitioned to new leadership and new editorial priorities, was hardest hit, with a 16.8% decline. The Week was next, with a 12.9% fall.

Newsweek

For the revamped Newsweek—together with its sister online site, The Daily Beast — 2011 was a difficult year. Since the two were merged, the magazine has been redesigned, the web sites have been joined, prominent journalists have been hired (in some cases rehired), and a new editorial sensibility has taken hold. Under Brown, who had previously edited The New Yorker and Vanity Fair before launching The Daily Beast, Newsweek has featured a host of splashier covers such as Republican presidential contender Michele Bachmann (“The Queen of Rage”), a digitally enhanced Princess Diana (how she might have looked at age 50), and Mitt Romney (as a dancing Mormon from the Broadway musical “The Book of Mormon”). While those efforts have brought attention, the numbers suggest they have not yet turned around the beleaguered publication.

The year 2011 marked the fifth consecutive one of declining circulation. And even though average subscription prices were cut almost a dollar versus a year ago, Newsweek lost almost 100,000 subscribers, a 3.5% drop.42

While the provocative covers have helped at the newsstand, such sales make up only 3% of Newsweek’s total circulation.

The Daily Beast-Newsweek combination also appears to be navigated deep water financially. Ad pages plummeted 16.8% more from already reduced levels of 2010, although the slide was nearly halted by the fourth quarter. According to AdWeek, the combined publications – now referred to as “NewsBeast” – lost an estimated $30 million in 2010. Barry Diller, the chief executive of the online company IAC, who backed The Daily Beast and championed the merger with Newsweek, told Wall Street analysts in June that he expected the merged pair to hit the black by early 2013, something that AdWeek estimates “will be a daunting task.43

Efforts on the digital side are also a work in progress. Newsweek’s website was integrated into The Daily Beast’s site in August 2011. Brown hired blogger Andrew Sullivan from The Atlantic, where he had a following of over million unique monthly visitors. Merging the two was supposed to boost traffic; instead it has fallen significantly. When the deal closed, The Daily Beast’s audience was 2.2 million, while Newsweek drew 3.1 million unique monthly visitors, according to Compete.com.   Combined traffic for the two sites for the five months following the August merger averaged 2.5 million; in January 2012, that inched up to 2.9 million.

One big factor: Newsweek got more than 50% of its pre-merger traffic from a content deal in which it paid MSNBC and MSN to run its stories, giving Newsweek exposure to a much larger audience. When that deal, which reportedly cost $1 million a year, ended around the time of the merger, much of Newsweek’s online readership vanished.44

The Daily Best Newsweek combination under Brown has had difficulties with personnel. In November 2011, the publisher, the managing editor and the executive editor all left. By February 2012, Jane Spencer, who had taken over as executive editor of The Daily Beast in the first reshuffling, went on a sabbatical. Brown brought back Deidre Depke, a former editor of Newsweek.com, to replace her. That level of change makes building a consistent editorial product that readers can recognize more challenging.

Time

Time may be the winner among major newsweeklies, but it can hardly coast.  While Time saw a 1% increase in subscriptions, total circulation was flat for 2011.  Ad pages fell by 2.5%. That was an improvement over the 2.9% drop in 2010, however.  

To maintain its overall audience, Time is investing heavily in digital initiatives. But, unlike some others, it has not added digital-only subscriptions. Beginning in July 2011, it offered “all-access” subscriptions that allow mobile readers full access to the magazine and all of its digital content, including online extras available only to subscribers.  It has also added popular content in niche areas such as ideas and entertainment.

By at least some measures, those efforts have allowed Time to replicate the same strong position online in relation to its news magazine rivals that it holds in print. Time logs the most monthly unique visitors among the six, according to data provided by Compete.com.

SEE FULL DATA SET

Time also is adding to its editorial staff, for the first time since 2008. It increased staff by 13% in 2011, according to published staff boxes, to a total of 143 members of staff, including six additional people for online.

The Economist

After several years of stellar growth in the U.S., The Economist hit a bump in 2011 as ad pages fell 2.9%.

The Economist Group, which owns The Economist and several other publications, does not disclose results for the magazine alone. For the group as a whole, however, revenue for the first half of the fiscal year that ended Sept. 30th rose 4%, to $255 million, with profits up 6% to $40.7 million.45 (In fiscal 2011, almost half of the company’s revenue came from North America.)

Those results were helped by The Economist’s high-end pricing strategy. Unlike its American rivals, which have typically charged readers little in order to build a larger subscriber base, The Economist has positioned itself to attract a smaller, more elite audience at a premium price. An annual subscription to The Economist goes for $126.99, compared to $30 for Time or $39 for Newsweek.

Nor, as noted above, has that strategy deterred subscribers. Its elite image continued to draw new readers. Bolstered by a 3% hike in subscriptions, overall circulation rose 2% in 2011.

The Economist has also begun transitioning readers to its digital platforms. It now has 100,000 digital–only subscribers, and more than 300,000 of its 800,000 print subscribers also read stories on the web.46 The web site also plays a key role in drawing new subscribers who had not previously read the magazine. “The average weekly volume of digital customers who took out their subscription through The Economist online rose by 50 percent on the previous year,” said Nigel Ludlow, managing director of The Economist Online in UK, in an interview with Folio Magazine.47

The Atlantic

The Atlantic, a monthly magazine that has built a thriving web presence in recent years, saw print ads pages decline in 2011. After soaring 24% in 2010, they fell 3.9% during 2011. But digital has more than cushioned the fall. For the month of October 2011, The Atlantic’s digital ad revenues exceeded print ad revenues, 51% to 49%, for the first time ever.  For the full year, digital was expected to make up 45% of total ad revenues.48 Jay Lauf, The Atlantic’s publisher, told The New York Times that the publication expected to tally $18.6 million from print and digital advertising for 2011.49

Those numbers are the fruit of a four-year effort by Justin Smith, who became president of Atlantic Consumer Media in 2007, to focus on digital initiatives. In addition to beefing up the core Atlantic web site and staffing it with prominent bloggers, the company launched a news aggregator, The Atlantic Wire, and an offshoot devoted to urban issues, Atlantic Cities. In January, it hired Kevin Delaney, the managing editor of the WSJ.com to launch a global business site. Other offshoots, including sports and science, are under consideration.

“We decided to prioritize digital over everything else. We were no longer going to be ‘The Atlantic, which happens to do digital.’” Smith told Mashable in an interview in December 2011. “We were going to be a digital media company that also published The Atlantic magazine.”50

The Atlantic has also successfully leveraged its well-known brand name into a strong events business. Starting with the first year of the Obama administration it has hosted a policy conference every October in Washington D.C. It has also partnered with the Aspen Ideas Festival, an annual event that draws an A-list crowd from business, the government and the arts to the mountain resort town every June. Events now provide 14% of revenues, up from 6% in 2007, according to Ad Week.51

All this places The Atlantic as one of the winners, to this point, in the digital revolution, and a test case for others to emulate.

The New Yorker

The Condé Nast weekly turned in a year that was essentially flat. Print circulation rose marginally, but ad pages dropped 1.8% compared to 2010.

As with much of the rest of the Condé Nast stable, The New Yorker intensified its digital plans in 2011. In May 2011, it became the first Condé Nast magazine to move onto the iPad. By February 2012, it counted 200,000 iPad subscribers.52

Still, print remains deeply rooted in The New Yorker’s identity and mentality. While editor David Remnick recently told the audience at an AllThingsD technology and media conference that he was pushing his writers to create additional content for the magazine’s web site and app, he clearly believes print magazines have a future. “The New Yorker — you roll it up, you put it in your bag. It’s quite easy,” he said. “It’s pretty good technology.”53

The New Yorker’s online presence reflects that mentality. Much of the magazine’s content remains behind a pay wall. And there are fewer interactive elements on its tablet app than on those of other magazines. Instead, Remnick and his team concentrated on coming up with a clean, sophisticated design that was easy to read.  In July, deputy editor Pamela Maffei McCarthy told The New York Times: “That was really important to us: to create an app all about reading.”54

The Week

At the opposite end of the scale from the long-form journalism at The New Yorker, The Week has embraced a more functional form of magazine journalism. It offers readers a quick, easily digestible summary of the week’s news and debates, aggregated from hundreds of news sites worldwide. It promises to keep busy people abreast of the most significant things that happen each week in the worlds of politics, business, science and the arts.

Much like The Economist, The Week has carved out an enviably strong U.S. niche. Readership remains strong: Its total circulation grew roughly 2% in 2011, to 528,000. That is three times higher than 2003.

And in 2010, it earned a profit in the U.S. of $4 million, its first ever. According to The New York Times, it was on track to make $6.3 million in 2011.55

SEE FULL DATA SET

The magazine, however, suffered a sharp drop of 12.9% in ad pages in 2011. The decline raises questions as to whether The Week has reached a plateau. The rise of digital technologies, especially those of online news aggregators, could potentially threaten the magazine’s relevance. It should be noted, though, that The Week’s ad pages in 2011 are not lower than what they were in 2009. Even with a 12.9% loss in 2011, its ad pages are 1.7% above those in 2009.

In January 2012, Michael Wolfe left Men’s Journal and took on the publisher’s position, replacing Jessica Sibley. She had been at the magazine for 18 months, following a stint as publisher of BusinessWeek.

Continue reading Magazines: By the Numbers

Endnotes

  1. The Publishers Information Bureau does not track all the magazines sold in United States. For more on PIB’s methodology please refer here.
  2. Other firms track magazine revenue by estimating ad revenue rather than pages. Ad revenues are difficult to project reliably, because magazines frequently charge less per page sold than their published rates. No one but the publishers and the advertisers truly know what was paid. Still, market researcher Veronis Suhler Stevenson estimates, based on a strong first half of the year, that print ad revenues rose 3.3% for 2011.
  3. Advertising 2012 AD FORECASTS: A Have and Have-Not Media Economy.” Pivotal Research Group. Nov. 30, 2011.
  4. Schultz, E. J. “Kraft, General Mills Hold the Line on Marketing in Tough Environment.” Advertising Age. Feb. 21, 2012.
  5. Advertising Age. Datacenter.
  6. More Magazines Started in 2011 than 2010: 239 Magazines Launched in 2011 Versus 193 n 2010.” MediaFinder press release. Dec. 15, 2011.
  7. HGTV Magazine.” Folio Magazine. Jan. 20, 2012.
  8. More Magazines Started in 2011 than 2010: 239 Magazines Launched in 2011 Versus 193 n 2010.” MediaFinder press release. Dec. 15, 2011.
  9. “FAS-FAX Report for Consumer Magazines.” Audit Bureau of Circulations.
  10. PIB Revenue and Pages.” The Association of Magazine Media. Jan. 9, 2012.
  11. Campbell, Matthew, and Viscusi, Gregory. “Lagardère Gets $886 Million Offer From Hearst for International Magazines.” Bloomberg. Jan. 31, 2011.
  12. Hearst. Annual Report 2011.
  13. Meredith Completes Acquisition of FamilyFun Magazine from Disney Publishing Worldwide.” MarketWatch press release. Jan. 20, 2012.
  14. Meredith Completes Acquisition of Allrecipes.com from Reader’s Digest.” Meredith press release. March 1, 2012
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