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NEW YORK — Beginning in the late Nineties, Maxim, Stuff and FHM introduced American magazine readers to the idea of life as a frat party filled with strippers, beer, tasteless jokes and loud music. It was a notion that quickly redefined, and vastly expanded, the outlines of the men’s magazine market.

But, as with any frat party, the next morning brings hangovers. The evidence, like so many crumpled Budweiser cans and cigarette butts, is everywhere. Collective ad pages for the three titles were flat last year versus the previous year, and down 4 percent from 2002. Newsstand sales were down a collective 16 percent versus 2003, and down almost 25 percent from 2002. Total circulation increased slightly year-over-year, a fact that insiders universally attribute to massive spending on subscription acquisitions.

It’s enough to prompt comparisons with the British market, where the volcanic emergence of the so-called lad titles was followed by an equally abrupt crash. Between 1998 and 2001, the circulation of FHM in the U.K. fell 26 percent, while Loaded, the progenitor of the format, slid 33 percent.

Loaded founder James Brown said he sees certain parallels. “When they first came out, these magazines were so new and exciting that you had a degree of people buying them because it was the thing to do,” he said. “The initial explosion of excitement has ebbed away a bit.”

Executives at Dennis Publishing, which owns Maxim and Stuff, and Emap USA, which owns FHM, have consistently claimed they are not worried about a repeat of the British experience. But one veteran of the lad wars said even executives at the two companies have had their concerns. “Ever since Dennis Publishing started, they were always worried it was a fad,” he said.

A sign that Dennis, at least, is adapting to the more difficult market came last September when the company laid off 15 employees, including several executives. Dennis president Stephen Colvin said at the time the purge was part of the company’s “natural evolution.” Others, though, saw it otherwise.

“It seemed like Felix [Dennis, owner of Dennis Publishing] came to town and said, ‘What happened to my profits?’” said one longtime employee who lost his job. “You don’t do that kind of radical restructuring if you’ve been on one linear development path. This was a retrenchment.”

This story first appeared in the March 4, 2005 issue of WWD.  Subscribe Today.

Dennis also quietly dropped plans to launch a youth-oriented spin-off, called K-Max, last summer. Around the same time, Felix Dennis held negotiations about selling the U.S. division to American Media. The discussions fell apart over the price, according to sources. Colvin declined to be interviewed for this story.

Still, Dennis is far from crisis mode. Insiders say Maxim’s profits are more than sufficient to underwrite losses on The Week and Blender, two titles launched in 2001. The company’s total annual revenues are believed to be around $200 million. Recent ventures into licensing the Maxim name for products including hair dye and bed linens have generated extra cash. “They’re in an enviable position in some ways,” remarked one competing publisher.

Maxim would be more profitable still were it not for the title’s demanding rate base of 2.5 million, compared with 1.3 million for Stuff and 1.25 million for FHM. Though it was a product of genuine consumer-driven growth, with sales now ebbing, Maxim requires continuous infusions of subscriptions to maintain that level.

“Nobody ever thought it would go that high,” said one former Dennis employee. “It was all organic growth, and I think that’s why they got carried away.”

According to sources, executives in Dennis’ financial department have long urged a rate base decrease to improve profitability. “For a nanosecond, Felix was thinking about bringing it down” to around 2.1 million, according to one source. But, he added, it was ultimately decided that such a move could hurt the title’s ad sales.

The problems run considerably deeper at Stuff. Dennis launched the title in 1998 in an unsuccessful attempt to discourage Emap from bringing FHM to the U.S. Dennis’ policy has been to maintain Stuff’s circulation just ahead of FHM’s, with the result, sources estimated, that 70 to 80 percent of the title’s subscription file consists of low-quality, agent-sold subscriptions. As newsstand sales have plunged, the title’s reliance on agents has soared: they accounted for 54.2 percent of subscriptions sold in the second half of 2004, up from 28.8 percent two years earlier, according to filings to the Audit Bureau of Circulations. Maxim also increased its agent business, from 17.8 percent of new subscriptions in 2002 to 25.5 percent last year.

Of the three lad titles, FHM is the least reliant on agents, with just 17.6 percent of its new subscriptions coming through that channel last year. It also sells the highest proportion of its circulation on the newsstand — about 35 percent, versus 24 percent for Maxim and 22 percent for Stuff. And its ad pages are up so far in 2005, by 9.3 percent, while Maxim and Stuff are both down, by 11 percent and 11.8 percent, respectively, according to Media Industry Newsletter.

FHM president Dana Fields seizes on these differences to claim that her magazine, unlike its rivals, is firmly in growth mode. “We see no signs of slowing down at all,” she said. Fields scoffed at Dennis Publishing’s claim that replacing single-copy buyers with subscribers was part of the plan all along. “If you think anybody deliberately goes out to lose 125,000 newsstand buyers, I would, shall we say, beg to differ.”

Still, the three magazines face similar challenges. One is a continuing reluctance on the part of conservative and luxury marketers to advertise in magazines filled with pictures of girls in thongs and mutant farm animals. A Dennis source said the problem has become worse in the year since Janet Jackson exposed her breast at the Super Bowl, prompting a conservative backlash. “There are a lot of fringe advertisers who don’t love the idea of being in Maxim, and if they didn’t want to be in there three years ago, they definitely don’t want to be in there now,” he said.

Meanwhile, other publishers have responded to the lad magazines’ success by sharpening their pitches to the young male demographic. Product-focused magazines like Cargo (part of Advance Publications, parent of WWD) and Sync are chipping away at the under-30 audience, while those men’s titles that traditionally skew older have copied the practice of putting scantily clad women on the cover issue after issue.

According to former Maxim and FHM editors, young female stars have grown less willing to pose for those magazines. “There’s less of a cool factor for Hollywood,” said one source. After all, why settle for a lad magazine when Britney Spears is on the cover of Esquire and Lindsay Lohan does GQ?

In the U.K., the solution to declining sales of the monthly lad mags was — go weekly. The results were the bawdy magazines Zoo, published by FHM owner Emap, and Nuts. Both have stormed the British men’s magazine market over the last 18 months. Given the relative scarcity of newsstands in the U.S., however, such launches would be proportionately much more expensive, but it’s not inconceivable. “Before I brought out Loaded, they said men won’t buy monthlies, so I’m sure there will be successful men’s weeklies there in the same way there are over here,” said Brown.

Fields said, “It’s certainly a possibility. It’s not something we’re looking at right now, but you never know.”

The greatest obstacle of all, however, may be something the lad magazines are powerless to confront: Their own irrelevance. Several veterans of Dennis and Emap said they saw the rise of Maxim, Stuff and FHM as a product of a particular era in British and American culture, one whose expiration date is well past.

“Maxim’s direct impetus [in the U.S.] was the anti-P.C. movement, which was just getting on its feet in 1997,” said one former editor. “Now, we take it for granted that political correctness is kind of a joke these days. It’s harder to be cheeky when the whole world’s cheeky.”

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Newsstand sales as a percentage of total circulation
2002 2004
FHM 41.4 34.7
Maxim 33.7 23.9
Stuff 36 22.2
Source: Audit Bureau of Circulations
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