NEW YORK — Like most entrepreneurs, people who start magazines tend to be optimists. But the requisite optimism is getting harder to come by in light of recent events.
In the past two weeks, Hachette Filipacchi Media has shut down four-year-old Ellegirl, Condé Nast Publications has killed two-year-old Cargo and American Media has pulled the plug on a bevy of new titles, including Celebrity Living, which was approaching its first birthday. The past few months have also seen the deaths — or at least the indefinite discontinuations — of Budget Living, Absolute, Radar, Justice, Sync and Inside TV. These casualties, though all in their first five years of existence, represent a broad cross section of the magazine industry, encompassing men’s and women’s interest, weeklies and monthlies, local and national distribution and independent and corporate ownership.
Observers widely believe there are more closures to come. What’s the common factor?
One thing it’s not, to rule out the obvious suspect, is an advertising recession. Forecasters at two major media agencies, Universal McCann and Zenith Optimedia, projected growth of more than 5 percent in total U.S. ad spending this year. Of course, much of the new money is going into areas other than magazines, particularly the Internet and cable TV, but the Publishers Information Bureau still reported a 3.7 percent year-over-year increase in ad revenue for the industry through February.
“The pie might not be getting bigger as fast as a lot of people would like, but I don’t think it’s contracting,” said Randall Lane, president of Doubledown Media and editor in chief of Justice, a celebrity-crime title that went on hiatus in March. Lane’s prior record includes the launches of Trader Monthly, which is still in operation, and P.O.V., which shut down in 1999 after two years.
Interestingly, Doubledown has been keeping Justice’s Web site updated with fresh content despite the print edition’s cessation. Hachette, likewise, said it would continue to operate Ellegirl as a Web-only entity. Even Radar, currently seeking funding for a second relaunch, has kept its Web site running, though with no new content. This trend reflects what editors and publishers see as one of the new realities of the start-up environment: a magazine with a well-fleshed-out online presence is infinitely more attractive to advertisers — and, thus, investors — than a pure print play.
“This is the beginning of the ice age for print,” predicted Bob Guccione Jr., chief executive officer of Discover Media and founder of Spin, which he sold in 1997 for $45 million, and Gear, which launched in 1998 and shut down in 2003. “The ad community’s becoming far more discerning because they like the niche-ness of the online world. If print doesn’t realize that, then more and more magazines will die.”
Lane agreed: “Advertisers are moving toward buying print and online in packages. Magazines that don’t have a natural online component are more likely to get winnowed.”
Some believe the resurgence of the Internet as an advertising medium is having another consequence: coloring media companies’ expectations for growth. Web-only entities that can be started on the cheap and post double- or triple-digit revenue growth can seem awfully attractive compared with a traditional magazine launch, which can require years and tens of millions of dollars just to reach breakeven, especially now, given spiraling postage and paper costs. (It’s worth noting here that Time Inc. has shelved several print concepts in development over the past two years, including the women’s magazine Love and a men’s title, while proceeding with the launch of Officepirates.com, a humor site.)
“This sense that ‘flat is the new up’ is not going to cut it anymore, given the margins of the Internet,” said one editor whose magazine lost its backing and who requested anonymity. “You’ve got blogosphere economics that have everyone in a panic. But short-term, quantifiable results don’t necessarily build long-term brands.”
“We’re being held to the same kind of standards” as other media, agreed Rich Antoniello, publisher of Complex. “Every business is expected to be profitable so quickly, whereas before you used to get so long to show that you were a viable entity.”
Whatever the reason, it’s clear the clock ticks faster for new magazines than it did a decade ago. Samir Husni, a professor of journalism at the University of Mississippi who studies launches, said only 38 percent of new magazines make it to their first anniversaries, compared with 50 percent as recently as three years ago. Husni, who also consults, said publishers have lost patience for anything that’s not a hit out of the gate. “Ten years ago, publishers used to tell me they were willing to wait four or five years” for a magazine to reach profitability, he said. “Now it’s two years.”
And sometimes it’s not even that long. TV Guide shut down spin-off Inside TV after a mere seven months, a period during which it spent $24 million. “The costs of doing it are so high,” said Steve Legrice, Inside TV’s editor in chief. “No one seems, in my mind, prepared to eat the money you’d have to eat for two to three years.”
This fiscal conservatism is matched by what is seen as a lack of imagination on the part of many media companies. Several editors and executives spoke of a rampant “me-too” mind-set among the major publishing houses — most visibly, in the celebrity weekly category, where the overnight success of Us Weekly and In Touch rapidly spawned a slew of imitators, including Inside TV and Celebrity Living. “The market just got too overcrowded too quickly,” said Legrice. “Everybody was just jumping in and doing the same thing.
Moreover, by flooding supermarket checkouts, the weeklies made life tougher for every magazine that counts on newsstand sales for part of its circulation. “There’s a catch-22,” said Legrice. “You’re not going to get display unless you’re selling well, and you’re not going to sell well unless you get display.”
But it’s not just in the celebrity category where imitation has taken the place of innovation. And most observers don’t believe the rash of closures has nearly run its course.
“I think any objective observer would say there’s a lot of me-too-ism in the magazine business,” said Andrew Essex, who was editor in chief of Absolute, which shut down in February. “The marketplace is just not going to support a carbon copy of a magazine that’s already successful.”
“There’s a lot of ad dollars out there, but there’s not a lot of extra ad dollars,” said Guccione. “If a magazine doesn’t have a real potent, healthy need to exist, I don’t think it’s going to survive much longer.”