Time Warner is inching closer to selling its legendary magazine portfolio of titles from Time and Sports Illustrated to Fortune and Smart Money. At the same time, Activision Blizzard is entering the magazine fray with a pricey subscription-only quarterly periodical for diehard World of Warcraft video game fans. Meredith is recasting its stable of domestic titles -- including Ladies Home Journal, Traditional Home, Fitness and Family Circle -- as "national media brands." ESPN is reducing the annual price of its weekly glossy to $1 while giving its two million subscribers free access to the ESPN.com paid site, Insider, to encourage sampling.
As magazines hang in limbo between their traditional print roots and their digital online future, the economic gains they are making are small despite the big-time experimentation. It is estimated that by 2013, consumer magazines could double their annual $650 million in revenues from Internet and mobile devices, according to private equity firm Veronis Suhler Stevenson. In print, consumer magazines this year will hit a new low of $20.7 billion in revenues, sliding to $19.9 billion by 2013, as forecast by VSS.
Subscribers and advertisers aren't the only ones holding back. Potential buyers are dramatically discounting magazine core content and brand names that should be valuable anchors online. A case in point: McGraw-Hill's BusinessWeek could sell for a high of $40 million -- or a mere $1, just as TV Guide did last year. Months after Advance Publications ordered Conde Nast to abruptly shutter Portfolio, another Advance unit, American City Business Journals, has modestly re-launched it as an online-only entity.
One sure way to reverse magazines' failing fortunes, according to a Piper Jaffray report, is for the new owners of BusinessWeek to eliminate the costly physical plant and infrastructure tied to paper publishing to pursue more streamlined, profitable journalism online. BusinessWeek suitors including Bruce Wasserstein (owner of The Deal and New York magazine), OpenGate Capital (owners of TV Guide), Zelnick Media and Mansueto Ventures (owner of Fast Company) have not indicated their support for such a plan.
Although spinning off its cable systems and AOL will leave Time Warner a company devoted only to film, television, online and print content, it still seems compelled to sell its magazine group. Time Inc. publishing will continue to be a drag on overall corporate earnings even after the recession ends. It is expected to average a nine percent decline in earnings on about a nearly three percent decline in revenues over five years ending 2012, according to Bernstein Research.
Although Time Inc. continues to be among the ad sales leaders (according to the Magazine Publishers of America), it does not effectively exploit the overlap between its online readers, social networks and related Web interests.
On the other hand, it's also not kosher to pretend you are something else. Meredith has completely expunged the word "magazine" from recent marketing materials re-introducing its core publishing group for a multi-media world.
A recent Ad Age survey indicates a broader income mix for some magazines is possible by successfully integrating more non-publishing elements and leaning heavily on digital advertising and live events. For some magazines, like The Atlantic, traditional print advertising and circulation comprise only half overall revenues. Men's Health is succeeding with personal trainer and other specialized branded apps for the iPhone as well as niche books. E-commerce contributes to more than one quarter of the revenue for the tech-do-it-yourself magazine Make, and the young man's magazine Complex gets 35 percent of its revenues from a network of related online sites for sneakers ,car insurance and lots of unmentionables.
One of the most unique new entries into the tumultuous magazine world from Activision Blizzard demonstrates adeptness at matching niche content, audiences and e-commerce. The first issue of World of Warcraft: The Magazine is a 148-page tribute marking the game's fifth anniversary. It is the first of four issues that promise to be a glorified promotional campaign for a $40 annual subscription.
Often times the distinguishing factor is the ability of magazine publishers to interactively integrate the advertising and content most relevant to their users and their social networks across multiple media platforms. As a result, new iPhone applications for Seventeen Magazine and Runner's World market products featured in the magazines' content and advertising that users can buy on their mobile phones using the shopping service NearbyNow.
It's also about bringing targeted multi-media advertising to print, as evidenced by the new Pepsi Max and CBS co-branded, full-action video ad that will appear in the Sept. 18 issue of Entertainment Weekly. A paper-thin, button-activated two-inch interactive video player will be inserted in double-page ads and mailed only to Los Angeles and New York area EW subscribers. The first of its kind technology in the multi-million dollar campaign promotes new and returning CBS prime time series including, appropriately enough, The Big Bang Theory.