Can focussing on "lifetime value" of subscriptions save magazines?

Dependency on advertisers has for a longtime been the Achilles heel of magazine publishing, both consumer and b2b. As Howard Gossage, the iconoclastic commentator on advertising, said the readers lost control of their magazines the minute that publishers stopped raising the subscription price to cover the cost of production. As a result, advertisers inevitably have for a long times subsidized readers, calling the tune because they pay the piper.

A just-published study by the management consulting firm A T Kearney says that, as readership has declined, magazines should be rethinking the model whereby they have been focussed on the advertisers' needs while letting readers pay next to nothing for subscriptions. They suggest publishers can save their industry by pursuing a lifetime value model (LTV) and becoming less dependent on advertising.

The study mostly concentrates on the problems of sub-agents in the U.S. selling cut-price subscriptions in order to meet circulation targets whereas, in Canada, agency-sold subs are declining in importance and magazines don't guarantee rate bases. And the authors seems to think that publishers don't consider revenue sources such as brand extension, licensing and associated product sales. They do, plus how to do multi-platform selling and linking print and web publishing and deriving income from both. 

The study may be food for thought about seeking the maximum revenue from consumers rather than seeking readership at any price. I'd be interested to hear back from people out there who have a view about whether we can rebalance our publishing model to have the end user pay the freight.