What's a magazine worth? A little or a lot, depending on your perspective

For three generations, publishers and proprietors in the magazine industry have done themselves and the industry a serious injury by perpetuating the belief that readers won't pay what magazines are worth. So pervasive is the belief that the assumption is no longer even tested.

The late Howard Gossage defined it as taking a bite of a poisoned apple, the day that publishers decided that the cost of production of a magazine would be borne more by advertising revenue than by readers. He pointed out how bizarre is our distribution and marketing system now:

An illustration of the utter madness of publishing economics is that a...magazine is the only consumer product, from bubble gum to bras, where the selling price has no relation to the actual cost of production. It costs less, for instance, to have a magazine delivered at home than it does to buy it in a store...

As a result, we have convinced the public that a 100-page magazine, with 30,000 words of carefully considered text, illustration and photography in full colour is worth no more than a high-end greeting card with four words inside. The public can be forgiven for believing that a magazine is worth, give or take, about five bucks, because we've told them it is.

Some magazines are edging their price upwards to $6.95 or even $7.95. But the general trend holds true. And, given inflation, an average magazine's cover price -- the price to the consumer -- is probably 1/10th of what it was 20 years ago. Despite our lofty words about reader engagement and loyalty and journalistic integrity, most magazines have wound up pricing themselves as disposable indulgences. We have treated what we make as a commodity that readers can buy cheaper (in terms of their personal spending power) each year.

I'm bringing this up because some few magazines are bucking this trend and charging what their product is worth. One example is Lapham's Quarterly, just out, which could be described as the retirement project of former Harper's editor Lewis Lapham. It has a bracing, but otherwise quite realistic, cover price of $16. And no ads. It doesn't apologize for its aspirations or denigrate its own value, but trumpets it. Of course it is treated as exceptional (which it undoubtedly is), rather than as a way forward (which it might be). The idea of a circulation-driven economic model rather than an advertising-driven one is considered laughable in most magazine corporate suites. And remains largely unexplored by independent publishers.

It's worth remembering other magazines that knew their own value, like Fortune magazine, launched in the depth of the depression and charging $1 a copy when most magazines sold for 5 cents. It, too, made no apologies though, in later years, it fell into the same habits of mind and marketing as the rest of the industry.

Some small literary and cultural magazines in this country wrestle with increasing their prices to $10 or $12 a copy, even though they effectively publish quarterlies that have every bit as much value as comparable paperback books that routinely charge $17.95 and up.

Of course there are those who will say that digital and web-based publishing will change all of this and that's undoubtedly true. But we should be concerned that, having convinced ourselves that what we produce has a finite value, that our main customers are advertisers not readers, will we blow the chance to give control back to the reader? Already there is strong evidence that content will be free altogether in most instances, with advertisers calling the shots. If readers are forcing this model on us, it is only because we have trained them for years that they can have something for nothing. Controlled circulation -- an excellent way of helping advertisers reach targetted audiences -- is proof of this.

We have all seen examples of where perfectly wonderful magazines, beloved of their readers, died because advertisers didn't care about them. Readers today aren't given the chance (with rare exceptions like Adbusters) to vote with their dollars. They lost their say when advertisers were given the reins by the magazine industry itself.

(Stephen Osborne, an occasional contributor to this blog and the editor of Geist magazine, has said that virtually all magazines are subsidized in some way; the only question is where the subsidy comes from. His subsidy management model says any revenue generated from sources other than consumers should be considered a subsidy, including advertising. Most consumer magazines are subsidized 60 - 70% by advertisers. Smaller literary and cultural magazine have some advertising and the rest comes from public funding and fundraising. Only very few magazines find it possible to have their readers cover the majority of their costs.)

I'd be interested to hear from magazines in this country who follow or are moving to a circulation-driven model (in print and/or online), particularly their experience with readers who actually embrace the idea of having the magazines they want by the relatively simple expedient of paying for them.