I told you so, magazine edition

On Monday of this week, I posted about changes in the magazine industry and the trade-offs of circulation revenue versus advertising revenue. In essence, higher prices to users (via subscriptions and cover price) results in a higher value audience which results in higher CPMs to advertisers. Often the best way to make more money is to charge more. Shocking I know, but lately the word on the street has suggested that free is the future of business.

The folks behind Newsweek, formerly one of the canonical examples of a mass market magazine, apparently agree (via FT.com):

"Newsweek intends to court a high-end audience seeking in-depth commentary and reporting. It plans to leave the mass market behind by cutting the circulation it guarantees to advertisers, from 2.6m to 1.5m by January. Subscription prices are expected to double, executives said, and $25m could be saved annually from printing and distribution costs. Newsweek has cut 160 staff through voluntary redundancies and a handful of layoffs, but protected a stable of star columnists, correspondents and contributors."

I fully expect this trend to increase in the magazine and newspaper worlds (and the web, for that matter). As the old saw goes, old media don't die, they just evolve. Newsweek's move may not be right for every pub — quite frankly, death is right for a good portion of them — but don't be surprised if you're paying a lot more for the print media you truly value over the next few years.

Comments

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Smart thoughts Andrew. What will distinguish the magazines that die from those that survive? Good targeted content?

Also, I'd be curious as to your thoughts on the right web business for magazines to be in? Is it necessarily journalism?

[Andrew Anker]

Good questions and I certainly don't have any particularly brilliant answers. But if I had to wager, the magazines that survive will have many of these characteristics:

1. Readers who are willing to pay.
2. An audience that is harder to reach in other media (in particular, online) and is desirable to advertisers.
3. Content that is unique enough that it can't be found in a hundred places on the web.
4. Production values that play to the benefits of paper and ink.

On the second question, that's a real hard one... the answer is (being somewhat glib), whatever makes sense for the brand. It might be journalism, it might be community, it might discovery and I can think of plenty of others. About the only thing we know for sure is that it shouldn't be dumping a bunch of print content online. That hasn't worked for ages...

[pwb]

I predict the opposite. More free dailies like the Palo Alto Daily and San Francisco Examiner. With high fixed costs and low variable costs you want to maximize readership. Trying to play in the high cost world is a losing proposition for most.