Radical Is Not A Word Usually Associated With Time Magazine, But Look At All The Changes Its Implementing – Higher Cover Price, Lower Rate Base – And It Pinpoints The Seriousness Of The Problems Print Magazines Face Today

Philip M. Stone November 13, 2006

What do you do when single copy sales of your weekly magazine news drops 24% in just six months? The folks at Time Magazine have the solution – raise the newsstand price by $1 to $4.95.

What do you do to encourage your major advertisers, automakers, for instance, to bring back some of their spend they’ve moved elsewhere such as the Internet? Even though overall circulation is around 4 million, sell on a guarantee of 3.25 million, meaning about a 19% base rate cut so that a four-color ad will come down to about $241,000 a page. And if the single copy price hike loses some readers, then that’s already covered.

How do you bring in those advertisers everyone seems to target these days – the luxury trade?  Examine the postcodes for wealthy subscribers and for about 800,000 of those subscribers insert additional features monthly on such subjects as travel, fashion, and leisure and hopefully the luxury trade will bite.

How do you ensure that readers at home really have enough time to browse through the publication? Get it delivered to them for the weekend when there should be more leisure time for reading rather than on a Monday.

Those are just some of the major changes that Time Magazine is implementing starting with its first edition in 2007. The reason: Advertising by its most prolific buyers, auto makers, is way down this year, costing the magazine millions of dollars, and that has meant job losses, closing bureaus, and cutting back on editions.

The problem was severe enough at the news weekly and other major Time Inc. titles that it reported a 10% reduction in operating profit for the first six months of the year.  And with money tight the company has decided to concentrate on its major brands and has put up for sale 18 of its titles including Popular Science and Field and Stream, all of which are said to be interesting several other groups, especially European publishing organizations.

One question a weekly news magazine has to ask itself is how can it stay relevant in the age of instant information available on the Internet?  The answer, according to Rich Stengal, the magazine’s new managing editor, “We’re doing something that is going to shake up the whole industry.”

That probably also involves doing more of what one of its news weekly rivals, The Economist, has been doing with great effect, boosting its circulation considerably, and that is focusing more on the exclusive commentary and analysis that readers won’t find on the Internet, unless it is on Time’s own site.

And what the magazine wants to do is to get advertisers to pay based not just on print magazine circulation figures, but on total readership figures. Time revamped its web site earlier in the year and although it doesn’t get the financial support that other Time Inc. periodicals such as People or Sports Illustrated gets, the web site has grown its audience by some 90% this year.

Even for the print magazine, although circulation right now is around 4 million, Time figures that by the time you take the number of people who read one copy of the magazine then the total readership for each edition is around some 19.5 million readers and that is the real audience that advertisers should be paying for. Similar to television – advertisers pay by the number of people watch television, not how many televisions there are.

Since Time, as the world’s largest circulation generalist magazine, is going through such a makeover is it the same situation for specialty magazines? Car & Driver is the world’s largest car magazine and it, too, is going through a rebirth effective with its December issue.

Besides its most extensive redesign in 20 years, it has vastly expanded its web site aiming it primarily at people wanting to make a decision about buying a new car or truck. The magazine believes that 80% of its online visitors do not subscribe to the magazine and so it is moving some popular features that had appeared only in the print edition, including its popular bar graph comparing various cars to the web site. That in turn opens up the magazine to new graphical features that work best in print.

With a US circulation of 1.3 million, down 2.9% from a year ago, it, too, wants to take advantage of total readership advertising opportunities and it claims some 10.5 million readers for each issue, with another 1.5 million unique visitors to the web site looking at 27 million page views. Ad pages were down in the print edition by 7.7% for the first nine months of the year.

One thing is clear in the US magazine business. Costs continue to increase for print editions, whether it is newsprint or postage. Next year alone postage rates will increase12%.

All of that makes it worthwhile for magazines to do what newspapers have already embarked on doing – getting rid of that circulation that does not pay its own way. At Time, for instance, the total US newsstand sale is around 116,000 copies, just 3% of overall circulation, so even if sales drop down to, say 100,000 that’s still more profit at $4.95 each then the 116,000 sales at $3.95.

And, like newspapers, magazines need to be truly multi-platform. Indeed in the US the trend has already gone further -- magazines such as Teen People and Elle Girl are available now only on the web with the print edition abandoned entirely.

And that trend is likely to continue. Can newspapers be far behind?

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