Onward and upward -- Canadian Magazines blog tops 1 million visits

This blog started on a whim a little over 7 years ago, February 25, 2005. One of the early posts was about the concentration of funding for literary and cultural magazines in two federal ridings in Toronto and a national boom in magazine startups.  There has been a lot of sturm und drang in the industry since, but clearly no lack of interest in the topic; this week Canadian Magazines topped 1 million visits and almost 1.5 million page views.

Border Crossings and Toronto Life featured in Globe and Mail weekly magazine column

Border Crossings magazine and Toronto Life are featured in the magazines column by James Adams in this week's Saturday Globe and Mail.

Columnist sees the U.S. magazine industry smaller, dominated by Big 4 and women-focussed

Audience Development columnist Baird Davis (a senior consultant with Circulation Specialists) has compiled data showing how U.S. consumer magazine benchmarks -- circulation, newsstand sales and advertising sales -- aligned in 2009, and the picture was not pretty. (Of course the results don't necessarily reflect Canadian experience.) He calculated that...

• Circulation of audited consumer magazines declined 22% from 2000 to 2009
• Newsstand revenue is off about 16%
• Advertising sales declined by just over 20% in the past two years

"The simultaneous convergence of the three major bellwether indicators, along with signs of a modest advertising recovery in 2010, flattening newsstand sales and the success of a major new publication (Food Network), provide persuasive evidence that the consumer magazine industry is no longer searching for the bottom. The industry appears to have weighed anchor on a smaller business—whose parameters are 20-25 percent smaller—but one that’s ironically, perhaps, more vibrant than the bloated environment they have vacated.

"As a result of its bruising descent the industry is battle scarred and less arrogant. But it’s also leaner, wiser, a more effective consumer and audience development marketer, less advertising-centric and better prepared to cope with the demands of new media and the startling advances in technology."

One of the things he points out is that the business climate is increasingly unfriendly for smaller publishers who are being squeezed by such things as postal rate increases, fulfillment costs, newsstand distribution and the cost of print and paper. 

His prediction?

"The consumer magazine business of the future will be; smaller, more “Big 4” dominant, increasingly women focused, less kind to smaller publishers, multimedia sensitive and more consumer oriented."

BBC Worldwide says profits up 36.5% last year; magazine division holds its own

BBC Worldwide Ltd., the corporation's magazine and commercial division, has reported its operating profit for the year ending March up 36.5% to £145.2 million. According to a report in Press Gazette

Chief executive John Smith said: "Today’s figures, with profits up by 36.5 per cent, demonstrate that our strategy is working. As well as developing into a diversified global media business and extending the international visibility of the BBC brand, the company is delivering a strong financial performance.

"BBC Worldwide continues to give consumers around the world more and more content from the BBC and other British production companies. This allows us to re-invest in more great content and return more cash to our parent organisation, the BBC.”

Magazines are one of Worldwide's seven core businesses. The profit from magazines was £168.3m, and overall sales were down marginally (-1.3%) from the year before.  The full annual report is here (fair warning, it is 10mb).

• The four biggest titles -- Radio Times, Good Food, Gardener's World and Top Gear -- maintained their positions and their profitability at 16.5%.
• Overall circulation for adult magazines  rose slightly 2.4 million versus 2.37 million in 2009.
• Subscriptions grew 9.6% to an all-time high of 940,000 (most BBC magazines are sold as single copies)
• Children's magazines (a relatively small portion of the magazine business) slipped somewhat in profitability
• Joint ventures recovered from a 2.1% loss last year to a very modest profit this year (0.6%). These include magazine distribution, subscription fulfillment and consumer shows in the UK and international partnerships in India and Australia.

"We are expecting a further increase in profitability for Magazines in 2010/11 as investments in the current year are realised and as the business sees a full-year benefit from the 2009 restructure. Magazines has exceptionally strong brands, delivers consistent value to advertisers and readers, and operates in market sectors which we expect to remain relatively resilient, in spite of longer-term concerns about the health of markets for printed products," said the annual report.

BBC may sell off some of its magazines, partner on others

BBC Worldwide is undertaking a shakeup of its multi-title magazine division and is considering selling Radio Times magazine. According to a story in the Times newspaper, BBC Worldwide is considering entering into a licensing arrangement or partnership with a rival publisher for many or all of its 50 titles, maintaining editorial control and the vaunted BBC standards while enabling the organization's portfolio to be more profitable. 

Worldwide’s magazines division made a profit of £11.5 million last year on sales of £182 million. Sources close to the company, whose titles include Top Gear, Doctor Who and Gardeners’ World, said that the tie-up would create a “mixed portfolio” in which the some magazines would be sold while others would be licensed to the new partner to publish.

The source said: “It can’t just be about flogging off the company because a lot of the magazines are BBC-branded and programme-branded and a huge part of their value is their relationship with the BBC. It’s not straightforward and it’s not going to be the same structure for all of them. There are some titles that could be sold, some parts need to remain close to the BBC.”

BBC is Britain's fourth biggest consumer magazine publisher, selling 85 million copies a year. According to a separate Times story, Sir Michael Lyons, the chairman of the BBC Trust, last November ordered the magazine division to halt acquisitions. Cash raised from any sale or licensing of magazines could be used to help buy out Virgin Media from the joint venture UKTV, the story said.

Magazine publishers in positive territory on both sides of border

There has been some improvements in the stock values of publishing companies in the U.S. in the past year, according to a story in Folio:. For instance: 

• Time-Warner, parent of Time Inc., hit $31.89 on Tuesday, up from a low of $20.71.
• Martha Stewart Living Omnimedia was $5.41, up nearly 100% from its low of $1.88
• Meredith Corp. was $35.05, 98% up from its 52-week low of $17.70
• Playboy Enterprises was $3.79, up nearly 100% from its low a year ago of $1.88

According to Reed Phillips, managing partner at DeSilva + Phillips, another reason for stock price gains among publishers is a significant reduction in cost restructures among them. “Some of these same companies that saw sharp declines in their stock prices during the recession have significantly reduced their cost structures and are in a good position to share strong returns as advertising revenues rebound,” he says. “Investors are anticipating much better operating results from media companies.”

 In Canada, publicly held parent firms of the large magazine publishing companies have seen similar, but less dramatic, surges.

• Rogers Communications on Tuesday was $36.87, compared with its 52-week low of $28.40
• Quebecor Inc. was at $36.89, compared with $14.93
• Transcontinental Inc. was $14.16, compared with $5.95

(Of course Rogers, for instance, makes most of its money and investors make most of their judgements on wireless and cable results and Quebecor and Transcon both are driven most by printing revenues.)

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.

Audio podcasts about magazine business launched by Magazines Canada

Magazines Canada is launching a series of audio podcasts called Audiomag, related to key magazine issues. The first, available now, features Paul Rossi, North American publisher of The Economist and a speaker at MagNet 2009. He talks about how he doubled his newsstand sales in just over one year.

In future,there will be episodes from

• Anthony Licata, Editor of Field & Stream, on how to keep service articles fresh
• Bryan Welch from Ogden Publications (Utne Reader) on why magazines and sustainability are the perfect match
• The editors of Geist on how they successfully mesh advertising and circulation strategies, and
  
• Zinio on the critical role digital editions can play for a print publication.

The podcasts are produced by Tina Pittaway, an award winning independent writer and broadcaster. Tina has been a contributor to CBC Radio and Television for more than 20 years. Her radio documentaries have been honoured with a 2007 Gabriel Award, 2008 Amnesty International Media Award, 2009 Gold Medal at the New York Festivals and a Science in Society Award from the Canadian Science Writers' Association.

Is Time Inc. going to be for sale?

Apologies for making you more jittery about the magazine business than you already are, there is a suggestion in the Wall Street Journal (via UK Press Gazette) that the publishing arm of Time Warner may soon be up for sale.

The question is whether, in the present economic situation, there are any would-be buyers. Time and Fortune are big-name titles and the Wall Street Journal suggests that as "trophy buys" they could fetch a price in excess of their economic value.

These days, the publishing side of Time Warner accounts for only nine per cent of the company's income, compared to 36 per cent from its cable channels, 23 per cent from its TV stations and about the same from its film business - figures that reflect the declining importance of the print side of the business.