How come the liquor store is in the magazine business?
An opinion piece in the National Post by D'Arcy Jenish, a freelance writer and former staffer at Maclean's magazine, takes up the case of Food & Drink magazine. While it doesn't bring new information to the fore, his column reiterates the question that the magazine industry is asking (so far, to no effect): why is the Ontario government and one of its agencies, the Liquor Control Board of Ontario using its monopoly position to compete with private sector magazines.His conclusion is blunt:
There is, in short, no compelling case for keeping this magazine as the coddled creation of a state-owned monopoly. The government should shut it down, or cut it loose, and let Food & Drink stand or fall on its own merits.Food & Drink publishes quarterly and has a circulation of about 520,000 copies and a measured readership according to the Print Measurement Bureau of 2.17 million (about 4.1 readers per copy).
The article quotes Mark Jamison, the president of Magazines Canada, saying that Food & Drink takes something like $10 million* in advertising revenue that would otherwise go to other consumer magazines. MagsCan published a public policy paper in November recommending that the Ontario government get out of the business. (An earlier post pointed out that Food & Drink takes up 40% of the beverage alcohol advertising dollars in Canada and is the 20th largest consumer magazine in the country in terms of advertising and 10th in terms of circulation, despite being distributed only in Ontario liquor stores.)
*In fact, elsewhere it has been said that the $10 million is more subtle and probably represents the increased value of sales as the result of publishing the magazine and a couple of years ago, the magazine was reported to have production costs of about $5 million and ad revenue of $3 million, justifying the shortfall by the bump in sales. Since the LCBO refuses to publish its magazine's financials, no one really knows.
posted by D. B. Scott at
9:09 am
9 Comments:
Monopolistic practices are one thing...
monopolistic marketing practices is something else entirely
where there is smoke, there is fire.
greedy government bastards!
FYI, the LCBO has a publicly posted an RFP on Biddingo which claims a net (after agency and sales commissions) ad sales budget of $4,656,000 for 2008. With about 440 ad pages a year that seems about right.
Now I know how the industry screams foul in that the LCBO spends more than that producing the glossy. But if instead they hired a custom publisher about $2 million a year (plus all the ad revenue) to produce this magazine for them, nobody would bat an eye. The custom publisher makes a healthy profit, the LCBO maintains their investment in this marketing program and the advertisers still line up to be in the type of magazine that has value to them. And how exactly does that help the rest of the industry?
The media community never second-guesses the marketing strategies of Crown corporations and other government bodies when they buy ads in private-sector media.
But apparently these same highly responsible institutions have no right to market the way they want to if it means they're not buying ads from private-sector media.
Whining hypocrites.
you have missed the point entirely...
WHY does the government even need to be in the magazine biz in the first place? My friend runs a liquor story in a small town in Texas and has no problem moving 4.5 million dollars worth of product.
If there was competition with the business of selling booze, then I can understand why you would need to market via airmiles, magazines and shelving programmes.
The truth is that this is such utter horsesh*t and no one has the guts to take on the LCBO and bring Ontario into the 21st century.
It's shameful how the LCBO strong arms suppliers.
We don't need this magazine and we don't need the LCBO. We need be more like Alberta in the way we sell booze.
i agree with the texan, err, albertan
This is Anonymous No. 3, responding to Anonymous No. 4's kind comment that I missed the point entirely.
Yes, the LCBO is archaic and anti-consumer. But so is the the magazine industry's sense of entitlement.
Let's use that ultra-efficient, private-sector entrepreneurial flair and find a way to beat this bloated behemoth.
Oh, I forgot, this is the Canadian magazine industry. We don't launch new magazines. We wait for sure things to open up.
Speaking strictly as one faithful reader of the LCBO's Food & Drink magazine, I can state quite frankly that if Food & Drink went away, I would NOT start spending my money on other magazines to fill the void. I suspect I am not the only Food & Drink reader who would react this way. Therefore, to some extent, the advertisers who moved their dollars to commercial mags would not be getting as much bang for their readership buck as they do now, with Food & Drink.
One very important point that the original article and this blog have failed (or deliberately neglected) to mention is the fact that Food & Drink is free to the reader. Why should I spend $3.50 to $8 or so to purchase a magazine that is often less beautifully produced and usually padded with articles I'm completely uninterested in reading?
No other magazine has ever created the "excitement factor" for me that Food & Drink does. It's food porn of the highest quality...and free! Every few months when I go into the liquor store I start anxiously looking around for the Food & Drink mag, and it's a good day indeed when I find one. I pick up Food & Drink for the great recipes, the beautiful design and the unbeatable cover price. If some commercial magazine publisher wants to stop whining and step up to the plate with a similar product, then I would be happy to patronize them. Till then, I will remain a faithful Food & Drink reader.
And no, I'm not an employee of the Ontario government.
LCBO... don't you dare stop publishing Food & Drink.
One other thing... Why are all your other commenters posting their remarks anonymously on this? Wussies.
From a reader's perspective, I can understand your affection for and loyalty to Food & Drink. But there is a chicken-egg argument here.
Many commercial consumer magazines cannot duplicate Food & Drink's admittedly sumptuous production values for at least two reasons:
One is that they cannot stay in business by paying more than they earn to publish the magazine, as F & D does consistently. They do not have the benefit and the ability to rationalize the publishing loss and offset it by the volume of sales of beverage alcohol over which they have a government-mandated monopoly. Since most commercial consumer magazines rely 60% to 70% on advertising, the creaming off of this lucrative segment of their advertising more or less guarantees that they will never be able to match F & D's heft and the content you like so much. I guess you can consider it your tax dollars at work.(An irony is that you are probably paying indirectly and invisibly a far higher percentage of the Food and Drink cost of production than you would for a comparable consumer magazine.)
The other is that they are unlikely to ever have sufficient revenue to invest in such a sumptuous product without receiving a reasonable share of the beverage alcohol advertising category.Readers sometimes fail to understand this implication of receiving a so-called "free" or controlled magazine. Somebody is paying for it and, in this case, it is the taxpayers and all purchasers of beverage alcohol, since F & D is effectively subsidized by a certain amount of the purchase price of every bottle of wine or booze sold, particularly the increased consumption that is the reason the magazine is published in the first place.
Post a Comment
Subscribe to Post Comments [Atom]
<< Home