NEW YORK — “Newsstands are a mess, sell-through rates are a challenge, there’s no question there’s commoditizing of the ad buy and ad agencies are giving less attention to the nuances of your brand, and they want discounts and added-value and more merchandising.”
This story first appeared in the June 7, 2002 issue of WWD. Subscribe Today.
And that’s coming from Stephen Colvin, president, Dennis Publishing USA, a magazine company that’s managed to grow substantially in this difficult environment. Dennis publishes Maxim, Blender, Stuff and This Week.
Colvin was among the six panelists Wednesday at the “M2 Master the Future” media conference sponsored by Folio Magazine. Entitled “Consumer Power Panel: Evaluating the Challenges of Today and Positioning for Tomorrow,” the seminar was moderated by Susan Ungaro, editor in chief of Family Circle and editorial consultant for Rosie. Other panelists were Alyce Alston, vice president/publisher of W; Betsy Carter, editor in chief of My Generation; Alex Mironovich, chief executive officer of Vibe/Spin Ventures; Barbara O’Dair, managing editor of Teen People, and Richard M. Smith, chairman and editor in chief of Newsweek.
According to the panel, the biggest challenges facing their magazines were as follows:
Vibe’s Mironovich said postal rate hikes and newsstand distribution means “we’re getting hits from both sides. You can do circulation efforts, but you’re punished when you’re sending it out.” Another problem is the ad decline and a lot of the revenue has gone elsewhere, he said. “You have to tighten your belt and differentiate your product. You have to focus in on the brands so it’s clear everyone’s articulating with one voice. We formed relationships with MTV, such as “Ultimate Spin” and Vibe’s “Sisters of HipHop” concert tour with MTV2.”
Newsweek’s Smith noted that in the short term, the advertising decline is the biggest problem. “The technical term is the environment sucks. I’ve seen these things come and go, and there will be a turn in the cycle.” He recalled several years ago when Newsweek held a brainstorming meeting for the ad staff, and an editor gave his opinion. “This magazine has no problems that 200 ad pages wouldn’t cure.” Plus, he said he’s also concerned about running “a huge magazine with steady increases in postal rates.” He said Newsweek didn’t have any newsstand problems in 2001. In fact, newsstand was up 80 percent, which translated into a surge of subscriptions. Between 200,000 and 250,000 subscriptions came in last year.
Alston said that while advertising is always a concern, W’s biggest challenge is “staying new and provocative and staying who we are.” She said that she’s had to pay more to recruit better talent. With ad revenues down, she’s had to cut other areas. “It costs a lot of money to have the right people in the right place.”
Faced with increased competition in the teen category, Teen People’s O’Dair said newsstand distribution is always a concern and “maintaining our leadership position.” She said the teen market has grown enormously in the past five years “and there’s a glut of teen magazines. We need to stay ahead of the curve and emphasize our point of difference.” O’Dair said the teen title has taken a multimedia approach, such as its tie-in with MTV; teenpeople.com, special issues and themed issues, including a newsstand-only Music Issue that hits stands today featuring Jay Z on the cover, along with Ashanti and P.O.D.’s Sonny.
Carter, who edits My Maturity, said the magazine launched with 2.3 million circulation and has grown to 4.3 million. She said it is now starting to aggressively market the title and get more advertising.
During a question-and-answer period, someone asked the panelists’ opinions about Web sites and noted that magazine companies can avoid postal hikes by drumming up subscription business via the Internet.
Mironovish said many publishers want the Internet to exist as a separate division.
“The model has changed dramatically. Internet sites are very important to young people.” He said he will soon announce a partnership with Yahoo.
Colvin said Maxim has gotten 12,000 to 14,000 paid subscriptions from its Web site a month. He said he’s launching a Club Maxim this summer, which will be a subscription-only part of the Maxim site.
What irks Colvin is that magazines are giving the business away by offering inexpensive subscription rates. “Magazines sell 12 issues for $10. Why do we undersell our magazines?” he asked.
Newsweek’s Smith said, “Some magazines need it and it’s absolutely critical and some don’t. I didn’t see a way of using our own resources to justify the expense.” Newsweek has partnered with other companies.
Above all, Smith emphasized how critical circulation is to a magazine and that it’s extremely profitable at Newsweek. “Circulation is the bond fund, and advertising is the tech fund. You better have a strong bond fund.”