Friday, August 15, 2008

Are Magazines in Trouble?

We have known for quite some time that traditional media is in trouble. In today's headlines we learned that the largest newspaper company, Gannett, has just laid off 1,000 employees. Furthermore, newspapers have been in a constant state of decline for quite some time and this is reflected in reduced advertising revenues, shrinking classified ads, and in the market value of newspapers when they go up for sale (often half of what the current owner paid for them).

It seemed that magazines have been largely exempt from the drama facing newspapers. It is true, they have not seen the growth in revenue that the web has enjoyed, but they haven't suffered from the losses seen in traditional media. However, magazines are beginning to believe that the future is less than bright.

Portfolio.com reports that "Across the industry, newsstand sales were down a startling 6.3 percent, a loss that had to be replaced with expensive giveaway copies. And while there's some debate over how much of the shift is cyclical and how much secular, it's clear that at least some readers are turning away from magazines."

Magazines are rightly concerned that they will follow a path similar path to newspapers and that all the color photos and glossy paper in the world won't save them. They are taking action through the development of what they hope will be a well received approach to circulation problems. It is, if nothing else, innovative and imaginative.

Time, Inc has developed a new program called MagHound, that is scheduled to begin in September and is designed to let people have access to numerous magazines at one low price. Essentially, it is bringing Netflix to magazines. Netflix charges one small fee to rent a certain number of videos each month. This allows you to change your magazine subscription based on your interest at the time. Portfolio reports "You choose how many magazines you want to receive each month—three for $4.95, five for $7.95, seven for $9.95, and a dollar each above that. All issues published by those magazines will be sent to you that month." They will be billed this amount and are allowed to easily change their publication. Time has over 240 titles in numerous fields-- plenty to choose from.

There are several advantages to this system for the publishers. For one thing, each magazine being sent out will be treated the same as a magazine sold at the newsstand for circulation audit purposes. This, in spite of the fact, that readers will be spending a fraction of what they would spend at the bookstore. This increase in sales should look excellent in the eyes of actual advertisers and could raise magazine revenues. There are doubts, however, that this accounting will hold up over time, because of what is seen as an unfair advantage since readers will be paying so little per publication. We will have to wait and see.

I believe Netflix is an excellent idea, especially as they increasingly shift to movies you can download, but I am not so optimistic when it comes to the future of magazines. This is too bad, because I am a true lover of magazines, but I seriously have my doubts.

Magazine content is found in abundance on the web and at no cost. Magatopia includes the following online magazines at no cost -- Newsweek, Rolling Stone, Cosmopolitan, Maxim, Forbes, and many others. It actually gives you access to over 1,000 publications. True, they are not "real" magazines per se, but the vast majority of the sites offer the same information as their sister print publications and most at zero cost.

In the months to come there will also be the new BestoftheNews.com that will further make the print world miserable when it is released. Still, I admire the effort and innovation. Who knows, maybe Maghound will be the solution to declining magazine circulation.

Are you Looking Successful? Get the information on how to look and feel better by visiting LookingSuccessful.com often.

Kevin Price is Host of the Houston Business Show (M-F at 11 AM on CNN 650) and Publisher of the Houston Business Review.

Labels: , , , , ,


Post a Comment

<< Home