Magazines: A Shake-Out for News Weeklies
By Katerina-Eva Matsa, Tom Rosenstiel and Paul Moore of the Project for Excellence in Journalism
After two difficult years, the magazine industry in 2010 managed to significantly slow its decline.
Overall, circulation was still down slightly. Advertising revenue was flat – and that was good news when compared with the disastrous years of 2008 and 2009. Publicly traded magazine publishing companies managed to report growth overall.
When it comes to news magazines in particular, 2010 handed out the sentencing on a verdict that had become clear a year or two before: there is now one clear winner among the mass market general interest news magazines – Time.
U.S. News & World Report finally abandoned its last efforts at publishing a print magazine. And Newsweek was sold for a dollar and the assumption of debt to a stereo equipment magnate who, after looking unsuccessfully for an editor to turn it around, agreed to a joint operating agreement with the Daily Beast website so that its editor, Tina Brown, could take the helm of both enterprises. (See Newsweek section for more)
Yet the end of the recession clarifies some stark realities. Most magazine professionals believe that the industry must finally get serious about changing a flawed economic model. It must find a way to charge readers more and rely less on advertisers for revenue. Advertisers simply have too many choices now for that old model to work. And readers, shifting to digital platforms, will be even less responsive to agreeing to subscribe to print magazines they only vaguely want. To do that, however, magazines must crack the code of making their publications work on new platforms, particularly tablets. Perhaps even more challenging, they are going to have to make sure their content is strong enough that readers will actually pay for it – not just allow it into their house because it has been practically given away.
For the magazine industry generally the good news in 2010 was that things were not as bad as 2009.
The two key indicators – circulation and advertising sales – were flat for the second half of the year. And, both areas bore signs of improving even more in 2011.
Total circulation, audited for the final six months of 2010, was relatively flat, down 1.5%. That is an improvement over the 2.2% decline the same period the year before. Of that, subscriptions fared best, though they can be controlled by discounting. Subscriber copies sold fell 1.1% during the second half of 2010 compared with the same period the year before.
Newsstand sales – seen by many as a more reliable barometer of industry health than subscriptions – are still dropping.
Even here optimists see some sign of good news, however faint. The rates of decline in newsstand sales slowed for the third year in a row. Single-copy sales were down 8.2% in the second half of 2010, compared with 9.3% in the second half of 2009, and 11.2% in the second half of 2008.
The number of employees at U.S. magazines declined 5.8% in 2010, according to Ad Age’s analysis of recent Bureau of Labor Statistics data. However, this was an improvement too, compared to a 12.3% drop in 2009.1
Many individual magazines, however, fared much better than that. Some 128 magazines out of 235 monitored by the Publishers Information Bureau had an increase in ad pages, compared with 19 in 2009.
Perhaps more promising, in 2010, the number of ad pages rose in 7 of the 12 categories that Publishers Information Bureau tracks, including some that had been big losers the previous year. Automotive, for example, was up 16.9% over the year before.
Many saw the rise in auto as a sign that the economy was improving, that consumers had more money and more confidence and were ready to make big purchases. As Andrew Jung, the Magazine Publication Association’s chief marketing officer, said: “The significant increase in automotive advertising mirrors the general uptick in the economy that is benefiting magazine media. Automotive manufacturers are continuing to invest in magazines because magazines and the internet are considered the most influential source of information for brands especially in the final stages of purchase decisions.”3
Another positive signal was that more magazines launched than folded in 2010. MediaFinder calculates that 193 magazines were started in 2010, while 176 folded. The number of magazines that died during the year was down from 596 the year before. Food magazines topped the list of new launches with 28 new titles, such as Northeast Flavor, and ChopChop. Also, 28 print magazines converted to an online-only format in 2010, compared with 81 in 2009.4
The market research firm Veronis, Suhler and Stevenson projected a 4% decline in overall revenue (from both ads and circulation) for consumer magazines in 2010. That would be an improvement over the nearly 13% drop in 2009. But it would still leave industry wide revenues (including internet) well below their levels of the previous decade. And it would also leave consumer magazines squarely among the losers in consumer advertising media:
Veronis, Suhler and Stevenson also projected print advertising – still the industry’s biggest source of revenue – to decline slightly more (-4.7%).
For several years now, given the growing competition for advertising from new media, many in the industry have advocated that magazines must raise their subscription and cover prices to generate more revenue from audiences directly. That did not appear to happen in 2010; circulation revenue was expected to decline, by 3.3%.5
Veronis, Suhler and Stevenson does not project a return to overall revenue growth for the magazine industry until 2012, and even then it projects it to be modest, at 1.3%.
Given those grim realities, publishers are trying to move beyond magazine publishing, to exploit both their brands and their marketing skills into other revenue areas. Not only are they moving to develop digital editions to increase revenue, but they are also trying to move into advertising and marketing consultants.
One example is Rodale Publishing, which publishes Prevention and Men’s Health. It announced in June that it was repositioning itself as Rodale Custom Content & Marketing.6 And in June, Hearst purchased the search marketing specialist iCrossing as part of a strategy to expand into marketing services for “further diversification of our lines of business,” Hearst CEO Frank Bennack Jr. said.7 In November 2010, Hearst Magazines announced a partnership with JC Penney, launching a pair of online retail sites next summer.8
As for magazines themselves, overall analysts now think that capitalizing on the improving economy will depend on making headway in the digital space, particularly in tablets.
Veronis Suhler and Stevenson, for instance, expects digital to account for all the growth in magazine revenues through 2014.9
Against that tough revenue background, magazine publishers have had to cope by managing costs, which only makes investing in new technology and improving editorial quality (key to charging readers more) more challenging.
But many did so, and were able to report improved operating profits for the year.
Meredith, publisher of Better Homes and Gardens and Family Circle, reported net earnings for its 12-month fiscal ending in June 2010 as $103.96 million, up from a loss of $107.08 million during its fiscal 2009 year. Revenues dipped slightly to $1.38 billion from $1.4 billion. Meredith’s National Media Group, which publishes its magazines, reported a full-year operating profit of $167 million, an increase of 11 percent over 2009. Revenues dipped slightly to $1.11 billion, including $526 million in advertising revenue.10
Time Inc., the magazine division of Time Warner and the largest magazine publisher (People, InStyle, Time, etc.) in the United States, reported in February 2011 a 1.6% decline in overall revenue for the full year of 2010, even though its advertising revenues grew by 3%. Its revenue decrease was due to a 2.5% drop in subscription revenue and a 16% loss in other revenues. But through managing costs it was able to increase operating profit from those revenues by 109% (from $246 million in 2009 to $515 million in 2010).11
The four largest American magazine companies –Time Inc., Meredith, Condé Nast and Hearst – had big changes in the executive division.
Condé Nast announced during the summer that its consumer marketing chief, Robert A. Sauerberg, would become president, assuming a newly created second-in-command role to the chief executive, Charles H. Townsend (who had held the dual role since 2004).12
David Carey joined Hearst Magazines as president, leaving his post as Condé Nast group president. Carey succeeded Cathie Black, a publishing industry fixture for three decades.13
Time Inc.,tapped Meredith’s Jack Griffin to succeed Ann Moore as chief executive officer. Moore held that job for eight years. Meredith then promoted one of Griffin’s deputies, Tom Harty as president of the Meredith’s publishing division, National Media Group.14 As it would turn out, Griffin would run Time Inc. for only five months before he was forced to leave in February 2011. He was replaced on an interim basis by three executives managing as a committee, chief financial officer Howard Averill, general counsel Maurice Edelson and Time’s Inc.’s editor in chief John Huey.15 Time Warner’s chief executive officer, Jeff Bewkes, said “Although Jack is an extremely accomplished executive, I concluded that his leadership style and approach did not mesh with Time Inc and Time Warner.”16
For news magazines in particular, 2010 may well be remembered as the year when the impact of the 2008 recession finally sorted out the landscape.
First, Time emerged as the victor in the 77-year rivalry of mass market general interest news weeklies. As NPR puts it “Time Magazine is the last of the big newsweeklies.”17
On the other end of the scale, U.S. News & World Report, after years of continuing circulation decline, stopped printing (in December 2010) as a newsweekly altogether and went entirely digital. Now, in print form, it will limit itself to its controversial industry ranking guides for colleges, hospitals, etc.
The most spectacular and rapid changes, occurred at Newsweek. (See Newsweek section for more)
After years of tough losses (Newsweek’s total revenue fell by more than a third between 2007 and 2009 to $165.5 million) the Washington Post Company sold the struggling magazine to audio magnate Sidney Harman, who also assumed Newsweek’s extensive debt.18
The most successful news magazines in 2010 were niche publications aimed at elite audiences: The Economist, The Week, The Atlantic and the New Yorker. All four gained circulation in 2010 as they did in the last half of 2009.
Overall circulation for the six news magazines this report analyzes (now minus U.S. News) fell 8.9% in 2010. That is nearly six times the rate of decline of consumer magazines in general.
But that average is deceiving. Most of the decline comes from Newsweek, which saw circulation fall 31.6% during the year. Three of the six magazines lost readers (Time, Newsweek and the New Yorker), while modest gains were managed by the others (The Economist, The Week and The Atlantic).
At the newsstand, the decline was even more serious for the news magazines: a drop in sales of nearly 18%. All the magazines in our sample sold fewer issues at the newsstand than in 2009.
As a group, the news magazines analyzed here had slight gains in ad pages sold in 2010: 1.4% compared with a decline of 18.8% for all of them in the previous year, according to the Publishers Information Bureau.19
With the market sorted by the recession, at least one industry analyst believes news magazines and the industry generally now need to build a new revenue structure – one closer to the Economist’s – that leans more heavily on charging loyal customers and less on trying to attract a large pool of casual readers that can be delivered to advertisers in huge numbers.
“The entire category and the same is true for the majority of magazines in this country, has to shift from a business model that ‘counts customers’ to one that focuses on ‘customers who count,’” said Samir Husni, director of the Magazine Innovation Center at the University of Mississippi’s School of Journalism. “While numbers will still be of essence to achieve that mass impact in a very fragmented society, the mass numbers of yesteryears are no longer valid in today’s magazine media market.”20
Newsweek, the news magazine owned by the Washington Post Company for the last 49 years, was already struggling before the economy soured. With the recession, it simply foundered. Between 2007 and 2009, revenues plummeted 38%, according to internal Newsweek documents obtained by the Daily Beast. Losses mounted. The magazine lost $6 million in 2007 (before pension credits). That grew to $28.7 million in 2008 and $56 million in 2009. One problem was high overhead — $55 million for general and administrative costs in 2009, including $21 million in salaries and $13 million per year in rent for New York offices.21 (There are no comparable overhead figures for Time or other publications).
The other problem, according to many analysts, was the product. Newsweek was caught on one side between Time – a larger publication that was still more focused on reporting and on some summary of the news of the week – and on the other by elite or more targeted publications like The Economist –which have lower cost structures and serve higher demographic audiences with more content tightly related to one subject, economics. In 2007, for example, The Economist had one quarter the circulation of Newsweek but sold 22% more ad pages and generated three times as much circulation revenue per copy sold. Whether true or not, it also marketed itself as a higher quality editorial product even though with 70 writers it had half the staff.22
To compete, Newsweek began a series of efforts to cut costs and revamp the magazine. Between 2007 and the end of 2009, it reduced its total staffing from 520 to 348, a cut of 33%. The newsroom, which PEJ counted at 168 people in 2007 (down from as many as 348 in the 1980s), was cut to 133. The most publicized effort at change – and the last – came in May 2009 under then editor John Meacham. Meacham talked about reinventing the magazine to be more of an elite, niche periodical and he specifically mentioned The Economist.
To many, however, the result looked more like a redesign than a reinvention.23 Rather than moving to serious trend coverage written like those in The Economist by young staff without bylines in a unified voice of the magazine, Meacham continued to lean toward big name personality writers, aided by far flung correspondents looking for inside reporting nuggets. One problem, perhaps, was that he maintained many of the core staff locked into the old Newsweek way.
The reviews tended to be disappointing. “It was Economist-lite,” magazine consultant Martin Walker told the Daily Beast in August. “It didn’t have the news element of Time or the in-depth reporting and opinion of The Economist. It didn’t stand out as a uniquely compelling proposition. They made a lot of noise about editorial format but it wasn’t unique.”24
The editorial changes were accompanied by efforts on the business side to remake the magazine’s financial model toward a smaller, more elite audience and charging subscribers more for the magazine. It shrank its subscriber rate base, from 3 million to 2.7 million in early 2008, to 1.9 million in late 2009 and then to 1.5 million in December 2010. This represented a decline of 50% in two years (with newsstand sales declining to just over 40,000 copies per week). Reducing the rate base was designed to save money. U.S. magazines spend a good deal to persuade people to take the magazine so that they can deliver that audience to advertisers. Newsweek estimated, even after its cuts, it was spending roughly $17 on average to acquire a subscriber. The rate base cuts from 2.7 million to 1.5 million, internal documents estimate, saved Newsweek $29 million in subscription acquisition, printing and added delivery costs. It also doubled its basic subscription price from $20 to $40 a year.25
The dilemma Newsweek faced, as would any magazine trying to raise subscription prices while cutting costs, is how to you persuade people you are improving the magazine when you are also cutting back on staffing – and to try do so during an economic downturn?
Even with the cutbacks, losses continued, predicted to be $22 million in 2010.
The Washington Post Company, which bought Newsweek in 1961, gave Meacham’s reinvention eight months before announcing it was selling. There were three suitors. Harman won out, in part, reportedly, because he intended to maintain more of Newsweek’s staff and cut a more appealing figure to the Graham family. 26
As Harman began looking for a new editor, Newsweek veterans began to leave, including political writer and TV face Howard Fineman, editor at large Evan Thomas, investigative reporter Michael Isikoff who helped break the Lewinsky scandal, and Fareed Zakaria, whom Harman had tried to woo as editor.
One appeal of merging with the Daily Beast, in addition to getting Tina Brown as editor, was that it connected Newsweek to a diversified media company. Even the Washington Post’s sales prospectus suggested that the next owner should be someone with a larger media enterprise and an online presence: “The right strategic partner can potentially provide scale and synergies on the digital platform,” the prospectus said.27 Not owning any other media properties, Harman did not bring scale or synergy to the table.
Brown, the creator of the money-losing Daily Beast online brought a digital brand, a famous magazine résumé (Vanity Fair, the New Yorker), a major marketing presence (she is a media celebrity), and the financial backing of the Daily Beast’s owner, billionaire Barry Diller. There were some bumps in the road in the negotiations – reportedly largely over who was in control, Diller or Harman – but they were sufficiently resolved that in November 2010 they struck a deal for a partnership that would put Brown in charge of both the Daily Beast and the print magazine. The new entity, the Newsweek Daily Beast Company, will be 50 percent owned by Diller’s company, IAC/InterActiveCorp. and 50 percent by Harman.28
In February, the new company announced 30 voluntary buyouts a cut of more than 8%. 29
By the time 2010 was over, Newsweek’s circulation had fallen 31.6% more, to an average of 1,578,691 copies sold per week (from 2,309,000 copies in 2009) and ad pages had fallen by 19.8% (from 1,116.73 ad pages in 2009 to 895.70 in 2010).30
In August 2010, media writer Howard Kurtz wrote that Rick Stengel, the managing editor of Time magazine, who recently had shoulder surgery after aggravating an old high school injury playing basketball, “may have his shoulder in a sling, but when it comes to the newsmagazine wars, he’s the last man standing.”31
“We’ve become a category of one,” Stengel said. Time is a smaller magazine than when Stengel took over in 2006, but its survival is no small achievement.
The drumbeat about the imminent death of news magazines has been building “since we were in short pants,” Stengel said. Time managed to be the apparent winner in the category mainly by trusting the appetite for serious journalism, moving away from the celebrity covers that were once a staple of the genre.32
By some numbers, Time’s performance in 2010 resembled that of the magazine industry generally. Ad pages declined 2.9%. Circulation declined 1.1% with a 0.5% drop in subscriptions and 20.3% fall in single copy sales. (Time editors attribute the drop in single copy sales partly to comparisons with a spike in those sales in 2009 around the Obama inauguration and the early days of his presidency, and they note that newsstand sales make up only 2.3% of Time copies sold).
But as the lone surviving mass market news weekly – at least for now – Time is well positioned. PEJ estimates that the Time magazine enjoyed an operating profit of $55 million in 2010. And that in an economy still struggling. According to data provided by Time, the magazine had 68 new advertisers in 2010 that had not appeared a year earlier. With its new mobile app, Time can lay claim to 22 million print readers worldwide, 11.7 million unique monthly visitors on time.com. 2.6 million social media followers, 3.1 million mobile app users, 4 million readers of TIME for kids. That, Time executives say, puts the magazine’s reach at an all-time high.
To generate that profit, Time has also cut costs. It uses more freelancers and contributors than it once did and cut back on its full time editorial ranks. According to PEJ analysis of the magazine’s staff boxes, Time’s full time editorial staff has declined from 304 in 2003 to 126 in 2010 (not including contributors). On the digital side, Time.com staff has expanded, from 14 people in 2007 to 29 in 2010. (See data section for more)
Time’s content continues to focus on national affairs without diverging from what it has being doing the previous years. It also spends a good amount of content on global and foreign affairs, while its cover stories, apart from national affairs, take on issues about the economy, health and technology. (See data section for more)
Bill Mickey executive editor of Audience Development and EXPO Magazines at Red 7 Media thinks that with the shakeout in the category, mass can still work. “The mass market model works fine.” he said. “News magazines can look for opportunities and research their own audience. They can find segments of that audience that they can relate to and create targeted content through newsletters and online editorial pieces, rather expanding their overall readership.”33
The Economist continued to thrive in 2010.
The Economist magazine increased its circulation by 2% during the year. For the first time, because of Newsweek’s dramatic drop in circulation, The Economist came in second in newsstands circulation with 53,098 copies (even though it had a drop of 11.3%) following Time, which sells 75,719 copies. The Economist’s ad pages also grew by 3.8% compared to 2009.
In the last decade, North American circulation of The Economist has grown by more than 130% to roughly 830,000. (See data section for more)
Part of The Economist’s success is how it has marketed itself as something you “must” read if you want to understand the global economy. Some have dismissed this as a kind of snob appeal to Americans, “the Burberry-raincoat factor,” one former editor called it.36
Part of it is that the magazine has a consistent point of view. The magazine’s goal, says editor in chief John Micklethwait “is to take part in a severe contest between intelligence, which presses forward, and an unworthy, timid ignorance obstructing our progress.”37
Part of the success of The Economist is an economic model that is distinctly different than most American magazines. It charges a cover price of $6.99 per issue (Time costs $4.99) an annual subscription rate of $127 (Time’s annual subscription cost is $30).
The Atlantic, a monthly print magazine, had the strongest growth in ad pages (24%) among the news magazines. It increased its total circulation by 1.3%.
It is estimated that The Atlantic will have made a profit of $1.8 million in 2010. That would be the first time in at least a decade that the magazine had not lost money. According to figures reported by the company, its revenues reached $32.2 million in 2010 from which about half of that is advertising revenue. Digital advertising is projected at $6.1 million (a 70% jump), which represents almost 40% of the company’s overall advertising income.38 The Atlantic also enjoyed a 37% increase in events revenue and a remarkable 27% rise in print revenues.39
According to Atlantic Media’s President, Justin Smith, The Atlantic’s “comeback was structured around creating a solid brand identity; a digital-first strategy; building a marketing services operation; expanding live events; and maintaining a relentless focus on hiring top talent.”40
The November 2010 issue of The Atlantic was the single highest-revenue issue in its 153-year history, with a 60% jump in ad pages and a 95% gain in ad revenue, compared to the November 2009 issue.41
The Atlantic listed 60 news staff (51 in 2009) on its digital masthead as of January 2011, along with 8 members of staff dedicated to atlantic.com.42
The Week provides a digest of the week’s news and editorials taken and attributed to media sources worldwide. In addition to news and opinion, the magazine also provides articles about science, business, and the arts. Its format of news aggregation keeps overall staffing costs low.
The Week’s circulation was flat for 2010 (up 0.7%). Single copy sales fell by 44.7%, but newsstand sales only account a 0.4% of the magazine’s 517,000 total sales. Its ad pages grew even more substantially, by 16.8%.
The Week has become a trend and is now described as “the Air Force One in-flight magazine (The New Republic used to have that honor) or the Presidential Briefing for all who counts has become a must reading for the busy news hounds,” says Samir Husni.43
The New Yorker
At the New Yorker in 2010, advertising recovered ahead of the industry overall. Ad pages grew 5.5%.
Its total circulation decreased by 1.4%. Newsstands sales fell even more a significant 13.9%.
Still all of those numbers are improvements. In 2009, the New Yorker’s ad pages fell 24%, a little less than the industry average. But editor David Remnick’s magazine managed to eke out a small operating profit (excluding corporate overhead charges) by cutting costs. Those internal cuts meant that the New Yorker was the only Condé Nast magazine to avoid budget cuts last year.44
That positioned the magazine to benefit from the modest come back in 2010.
Opinion journals are highly responsive to political developments. By and large, magazines that reflect the viewpoints of the party out of power thrive, and those whose allies hold the White House suffer. The year just past was no exception.
The midterm election of 2010 came in a year of strong anti-Obama sentiments. And the conservative National Review’s circulation grew by 6.7%.
The liberal magazine The Nation, meanwhile, had a 10.5% circulation decline, according to the Audit Bureau of Circulations.
One strategy that the opinion magazine publishers now follow is that staff members are often ubiquitous in the talk culture of cable television. Victor Navasky, publisher emeritus of The Nation, said that “The Nation’s editors appear regularly on cable news, helps them gain popularity which can often be translated into an increase in subscriptions rates and profits.”45
With only partial circulation data available from the other two opinion magazines (the New Republic and the Weekly Standard), it is hard to draw conclusions about opinion journals (See data section for more).46
One significant development, though, in 2010 was that Marty Peretz, the editor-in-chief of The New Republic for the past 37 years, stepped down in January 2011 and took the title of “editor-in-chief emeritus.” Editor Richard Just took over as editor-in-chief. 47
A year ago, we raised the question in this essay about the extent to which a magazine’s identity was tied to platform. Could there be such a thing as a magazine online? Industry professionals were split on the answer. Some leaned toward the idea that the kind of long-form analytical journalism that magazines represent might not work as well on the web, given the importance of frequent postings to maintain traffic, and data about the brevity of online visits raising questions about whether people will read long stories digitally. The website Salon.com, for instance, even stopped calling itself a magazine. Will Newsweek be the print identity of the website of the Daily Beast? Or are they distinct brands that could exist in either platform?
Others were more persuaded that content, rather than platform, dictated whether something was a magazine. The editors of Slate, for instance, argued that they had cracked the code of writing long online.
We concluded that the nature of the journalism held the answer. Magazines, by their nature, are more contemplative than other kinds of journalism. They do not so much report events as help people think about the news after it has happened, to analyze and explain it.
In 2010, the thinking about this question was only enriched by the development of new technology. The evolution of the e-tablet, something closer to digital paper, may alter the interaction consumers have with digital journalism and may make the concept of an electronic magazine easier to imagine.
As a consequence, magazines were quick to gravitate to the iPad technology and even to smartphones in 2010. Time-Warner CEO Jeff Bewkes pinpointed the significance of tablet products: “For digital magazines to take off we need to offer consumers the flexibility of purchasing single-copy digital issues, having digital-only subscriptions and having a content everywhere approach that allows us to offer dual print and digital subscriptions.”48
It is too early to evaluate the advantages of these technological innovations, especially because there are continuing problems. First, there are few subscription options for the iPad users. In 2010, most magazines on the iPad were only sold per copy, forcing readers to pay more than they would with a subscription if they wanted to receive the magazine regularly. As David Carey, president of Hearst Magazines says: “If you look at the Apple store, the most common reason that people give an app a low rating is that it lacks a subscription option. They want to subscribe, and they don’t like the idea of paying $4.99 a month.”49
This issue was partly addressed in early 2011 when Apple introduced a digital subscription option. Magazine publishers, however, would be required to provide Apple with 30% of all sales when subscriptions are bought through the Apple Store. It is likely that many publishers will be uncomfortable giving up this much revenue, but Apple CEO Steve Jobs argued that the deal was good for both parties: “Our philosophy is simple — when Apple brings a new subscriber to the app, Apple earns a 30 percent share; when the publisher brings an existing or new subscriber to the app, the publisher keeps 100 percent and Apple earns nothing.”50
A second issue is Apple’s insistence that that it will not provide publishing companies with data about consumers who buy magazine apps at Apple stores, denying publishers valuable information about consumers of the booming tablet market.
Time, for example, has confronted Apple’s policy by releasing iPad versions a day or two before print editions as an incentive for iPad subscribers.51 Time Inc. also began in February 2011 to sell subscription bundles that include apps that run on the Android tablet software from Google. The magazines are delivered to a reader’s mailbox, tablet, smartphone and computer.52 Google has announced that it will keep only 10% of the fees charged by publishers, according to CEO Eric Schmidt, compared to Apple, which is planning to keep 30%. 53
Magazines also are embracing social media in an effort to boost circulation and revenues, although they have not determined how to monetize microblogging. People magazine is the most-followed magazine on Twitter with about 2.3 million followers; Time comes second and Newsweek is sixth.54
Mobile and e-media revenue for magazines overall (including from iPads) was projected to be down in 2010 by 2.9%, according to Veronis Suhler and Stevenson. But it is expected to rise in 2011 and begin to grow by double-digits the following year, as consumers continue to migrate to digital platforms and adopt e-readers, tablet computers and 4G phones.55
News Weeklies Online
News magazine websites continue to rank relatively low among all magazine and news websites, according to data available by Nielsen Netview.56 Other than Slate.com, which is an online-only magazine, Newsweek.com and time.com are the only news magazines ranked near the top. Slate.com and Time.com, for instance, attract one-tenth of the number of unique monthly visitors as Yahoo News, which is ranked at the top of news sites.
Slate.com also was not profitable in 2010. It reported a 30% growth in ad revenue the first quarter of 2010, and the Washington Post Company announced in November 2010 that Slate and washingtonpost.com together brought in $27.2 million for the third quarter. However, David Plotz, the editor of Slate, said, “The Slate Group is not profitable. We need to make sure that we are.”57
Things look troubling for another online magazine, Salon.com. In 2009, Salon.com laid off six staffers (a 20% cut of its editorial staff). It then reported a 40% increase in revenues for the second quarter of 2010.58 In the meantime, the site searched for a buyer to take over its business model as a stand-alone news site.59 Even though its operating loss shrank to $454,000 in 2010 from $1 million in 2009, the Salon Media Group has racked up net losses of more than $15 million in the past five years, with nearly a third of that coming in the fiscal year ended March 31, 2010.60 It also changed its editor–in–chief in November, when Joan Walsh, has been in that post since 2005, left and Kerry Lauerman, an editor and writer at the site for the last decade, replaced her.61
- Johnson, Bradley. “Revenue Is Seeing Single-Digit Growth This Year Following 2009’s 3.8% Decline. So Just Where’s the Money?” Advertising Age. Feb. 16, 2011. ↩
- Publishers Information Bureau. Revenue and Pages: Full Year 2010. ↩
- Twelve categories are the most significant contributors to Publishers Information Bureau revenue, comprising roughly 88% of total advertising spending. In 2010, Association of Magazine Media’s chief marketing officer, Andrew Jung noted that, the 12 categories garnered 141,865 pages of advertising, a 0.7% increase compared to 2009 when those categories drew 140,030 pages of advertising. Publishers Information Bureau. Press Release: “21.9% Surge in Automotive Advertising Helps Drive PIB to First-Full Year Revenue Increase since 2007.” Jan. 10, 2011. ↩
- Mediafinder, Press Release: “Magazine Launches Outpace Closures in 2010: Mediafinder Reports that 193 Magazines Launch and 176 Fold.” Dec. 13, 2010. ↩
- Veronis, Suhler Stevenson, Communications Industry Forecast, 2010-2014. ↩
- Mandese, Joe. “First Meredith, Then Hearst, Now Rodale Goes Marketing Native.” MediaPost. June 16, 2010. ↩
- Tartakoff, Joseph. “Done Deal: Hearst Buys iCrossing for $325 Million.” paidContent.org. Jun 2, 2010. ↩
- Palmer, Alex. “JC Penney partners with Hearst on e-commerce site launches.” Direct Marketing News. Nov. 12, 2010. ↩
- Veronis Suhler Stevenson, Communications Industry Forecast, 2010-2014. ↩
- Fell, Jason. “Meredith’s Fiscal Year-End Marks Return to Earnings Growth.” Folio. July 29, 2010. ↩
- Time Warner Inc. “2010 trending Schedules” Feb. 2, 2010 ↩
- Peters, Jeremy W. “Condé Nast Is Changing Its Blueprint.” The New York Times. July 23, 2010. ↩
- Cohn, Steve. “Carey Named Hearst Magazines President.” MinOnline. June 28, 2010 ↩
- Peters, Jeremy W. “In Magazine World, a New Crop of Chiefs.” The New York Times. Nov. 28, 2010. ↩
- Ives, Nat. “Did Griffin Push Time Too Fast? Change Agent Didn’t ‘Mesh’ With Entrenched Corporate Culture.” Advertising Age. Feb. 21, 2011. ↩
- Saba, Jennifer. “UPDATE 3-Time Inc CEO Jack Griffin Ousted” Reuters. Feb. 17, 2011. ↩
- Folkenflik, David. “Time Magazine: The Last of the Big Newsweeklies.” NPR. June 23, 2010. ↩
- Advertising Age. Datacenter: Media Family Trees. ↩
- 2010 figures for U.S. News & World Report were not available and have been left out of the calculations. ↩
- Husni, Samir. Interview with PEJ via Email. Feb. 8, 2011. ↩
- Newsweek Confidential Information Memorandum. June 2010, in “The Secret Newsweek Files” The Daily Beast. August 4, 2010. ↩
- Oberholzer-Gee, Felix; Anand, Bharat; Gomez, Lizzie. “The Economist.” Harvard Business School. 9-710-441. July 14, 2010. ↩
- 2010 State of the News Media Report. Magazines Chapter. ↩
- Dana, Rebecca & Lauria, Peter. “Newsweek’s Hidden Problem.” The Daily Beast. Aug. 4, 2010. ↩
- Newsweek Confidential Information Memorandum. June 2010, in “The Secret Newsweek Files” The Daily Beast. August 4, 2010. ↩
- Fishman, Steve. “Newsboy.” New York Magazine. Oct. 24, 2010. ↩
- Newsweek Confidential Information Memorandum. June 2010, in “The Secret Newsweek Files” The Daily Beast. August 4, 2010. ↩
- Fishman, Steve. “Newsboy.” New York Magazine. Oct. 24, 2010. ↩
- Pompeo, Joe. “Buyouts offered at Newsweek.” Yahoo News. Feb 16, 2011. ↩
- Audit Bureau of Circulations, FAS-FAX reports for consumer magazines. Publishers Information Bureau, of the Association of Magazine Media. ↩
- Kurtz, Howard. “Thinner Time Magazine Still Manages to Stand Out.” The Washington Post. Aug. 30, 2010 ↩
- ibid ↩
- Mickey, Bill. Interview with PEJ. Feb. 11, 2011. ↩
- The publications delivered under the Economist brand are: The Economist magazine, The Economist online, Economist Intelligence Unit, The World In…, and Intelligent Life. Also, the Economist Group prints the government brands: CQ Roll Call (including Capitol Advantage) and European Voice. ↩
- Results for the year ended March 31st 2010. The Economist Group. Annual Report 2010: June 2011. ↩
- Oberholzer-Gee, Felix; Anand, Bharat; Gomez, Lizzie. “The Economist” Harvard Business School. Case 710-441. July 14, 2010. ↩
- The Economist Group. “The Economist Brand Family: The Economist.” ↩
- Peters, Jeremy W. “Web Focus Helps Revitalize The Atlantic.” The New York Times. Dec. 12, 2010. ↩
- Sass, Eric. “Mag Bag: Rodale Names Zemoga Digital AOR.” MediaPost. Jan. 6, 2011. ↩
- Kinsman, Matt. “The Atlantic Posts Profit for First Time In Years.” Folio. Jan. 6, 2011. ↩
- The November issue featured The Atlantic’s Brave Thinkers profiles. Kinsman, Matt. “November Issue is Biggest Revenue Generator in The Atlantic’s 153-Year History.” Folio. Dec. 12, 2010. ↩
- The Atlantic Masthead. ↩
- Husni, Samir. Interview with PEJ via Email. Feb. 8, 2011 ↩
- Clifford, Stephanie. “Making It Look Easy at The New Yorker.” The New York Times. Apr. 4, 2010. ↩
- Navasky, Victor. Interview with PEJ. Feb. 8, 2011. ↩
- The New Republic has not reported circulation numbers to BPA Worldwide since the period of six months ended 6/30/09. The most recent data for the Weekly Standard reported to BPA Worldwide is the first half of 2010. ↩
- Kinsman, Matt. “New Republic Editor (and Part Owner) Steps Down After 37 Years.” Folio Magazine. Jan. 27, 2011. ↩
- Publishing Executive. “Revenue Falls Again for Time Inc.” Feb. 2011. ↩
- Peters, Jeremy W. “For Magazines, a Bitter Pill in iPad.” The New York Times. Jan. 16, 2011. ↩
- Sass, Eric. “Apple Unveils iPad Magazine Subs Model.” MediaPost. Feb. 15, 2011. ↩
- Kinsman, Matt; Fell, Jason; Mickey, Bill. “Beyond Digital Magazines: Tablets, E-Readers and Mobile Apps.” Folio. July 29, 2010. ↩
- Peters, Jeremy W. “Sports Illustrated’s Bundled Android Subscriptions.” The New York Times. Feb. 13, 2011. ↩
- Sherman, Alex; Womack, Brian; Kresge, Naomi. “Google Undercuts Apple with Subscription Service for Newspapers, Magazines.” Bloomberg. Feb 16, 2011. ↩
- Folio Magazine. “The Most-Followed Magazines on Twitter.” Feb. 1, 2011. ↩
- Veronis Suhler and Stevenson, Communications Industry Forecast, 2010-2014. ↩
- There are different methodologies followed by Nielsen, ComScore and Hitwise, which create some differences in ranking of the sites, but they create wide differences in the audience numbers. For example, comScore with its new methodology now has unique visitor numbers for Yahoo News at twice what Nielsen reports. Hitwise, on the other hand, doesn’t’ report unique visits at all but rather a percentage of total traffic. Despite these differing measurements, the rankings of news sites by these companies are generally very similar. (See Nielsen methodology for more) ↩
- Shields, Mike. “Slate Sees 30% Q1 Ad Revenue Gain.” AdWeek. May 6, 2010. And Summers, Nick. “Jacob Weisberg Was a Web Pioneer. But He Doesn’t Much Care for What Works on the Web Now. Can Slate Recover?” The New York Observer. Nov. 9, 2010 . ↩
- Pompeo, Joe. “Salon.com Boosts Revenues A Year After Laying Off 20% Of Its Edit Staff.” Business Insider The Wire. July 9, 2010. ↩
- Moses, Lucia. “Salon’s Dot-com Swan Song? Content and audience could be valuable to company willing to assume losses.”AdWeek. Dec. 5, 2010. ↩
- Kawamoto, Dawn. “Is Salon.com Looking to Turn a Page With a Merger?” Daily Finance. Nov. 29, 2010. And Adams, Russel. “Salon.com Opens Parlor to Possible Partner.” Wall Street Journal. Nov. 28, 2010. ↩
- Mediapost. “Salon EIC Walsh Leaves.” Nov. 8, 2010. ↩