Committing Mass Suicide is No Way Out for the Magazine Industry
December 7, 2008Some say we live in interesting times and I say we live in desperate times when it comes to the American magazine scene. Just days after returning from an overseas trip where I enjoyed seeing and buying magazines and newspapers that charge real prices for their content, I received an e mail from Hearst Magazines inviting me (being the valued subscriber who paid less than $7 per subscription to subscribe to all their magazines just a few months ago) to take advantage of “incredible savings” on all my favorite magazines.
Savings is not really the right word they should use. Desperate techniques (so I won’t use the permanent “Going Out of Business” sign used by many New York stores often to grab customers attention) that are used to go after “numbers to count” rather than “customers who count.” Do you remember years back when Hearst announced that they are trimming their circulation rates in order to cut all the marginal subscribers. They were going for customers who count and getting out of the business of counting customers.
Well, selling magazine subscriptions (whether a whole year or just six months) for the price of one issue is in no way a plan to reach customers who count. We are back in the business of counting customers… a plan that worked well since WWII until few years back.
It is time to CHANGE our ways of doing business. It is time to change our method of pricing and selling magazines. Maybe, for a change, we can start saying Yes We Can and start thinking of the readers as a good source of revenue. After all my friends at the Magazine Publishers of America keep on reminding me that according to their Magazine Handbook (page 18 to be exact) circulation is responsible for 44% of the magazine industry revenues. I may be naive, but try to explain to me when you sell 12 issues of a magazine for $5 how can you make a single penny in revenue from circulation? (Not to mention my favorite example of selling 52 issues of Newsweek for $10).
Back to the Hearst offer, here is the e mail so you want think I am making this up…
Take advantage of these incredible savings now and stock up on all your favorite magazines. SAVE BIG on holiday gifts too. We have something for everyone on your list — family, friends and co-workers. At just $5 these are terrific as main gifts or stocking stuffers. Click here to start shopping now and don’t forget to pass this offer along to others to let them know what a great deal you’ve found. Happy saving!
These are our lowest prices of the year — but they won’t last long. Shop and Save now!
Yes, I may save now, but at this level of sales will I have a magazine to receive a year from now? That, my friends, is the real question.
Mr. Magazine 
Yes, you can’t imagine what next year’s holiday offer will be (they’ll start paying you to receive their magazines?).
Keeping in mind that the ad revenue is equally challenged (more realestate and less ad bucks to go around), do you see a way out of this Kamikaze-scenario? Maybe Hearst counts on getting subscribers with this offer, that might make them some money in the long run?
(One can’t help but think that these mags are already paid for with advertising and in reality the readers shouldn’t pay to subscribe at all… and that Hearst need to boost their circulation with offers like these to deliver value to advertisers. Sounds like a vicious circle to me).
Change is good and while it is hard to do it on your own, one still has to try. We are definitely different from the Europeans.
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The amazing new model here is the UK is the upscale Monocle. A single issue costs £5 but it is MORE to subscribe – £75 for 12 issues plus web access. This has shattered the normal model here. Conde Nast need to get Tyler Brulee to run their business. Forget McKinsey.