Thursday, March 27, 2014

Are Printed Magazines Growing or Shrinking? Yes

Magazine advertising gains market share in the U.S., but the actual number of magazine copies is declining faster than ever: What in this crazy multimedia world is going on?

Two statistics released this week underscore a counter-intuitive trend: U.S. publishers seem to be prospering despite printing fewer copies of actual magazines.

In fact, many “magazine media” companies are doing well precisely because they can get away with printing fewer copies without suffering the consequences that used to accompany reduced circulation. But first the data, and then the interpretation:
  • The volume of Periodicals class mail decreased a stunning 12-plus percent last month versus February 2013, according to preliminary numbers the U.S. Postal Service released Monday. Periodicals mail – which covers distribution of most U.S. magazines, as well as some newspapers – has been gradually declining at a 4%-5% pace the past few years but dropped 7.3% in January and then 12.7% in February. 
  • U.S. ad revenue for printed magazines rose an estimated 1.8% in 2013, Kantar Media reported Tuesday. Magazines actually gained a bit of market share from TV, radio, and newspapers. And many magazine publishers no doubt benefited from the 15.7% rise in Internet display advertising.  
  • With the high-profile web-to-print launches of such titles as Newsweek, AllRecipes, and The Pitchfork Review, print magazines have become so hip that the recent SxSW conference even devoted a session to their resurgence. Anecdotal information suggests that fewer established titles are abandoning print than in previous years and that more new magazines are surviving the critical first two years. 
  • So if magazines are booming but fewer copies are being mailed, other distribution methods must be growing, right? Nope. The newsstand system, which is the second largest distribution channel, had 7.5% fewer copies on sale last year, according to MagNet. And an eyeballing of preliminary Alliance for Audited Media data confirms that the number of printed copies declined for most magazine titles last year. 
A decade or two ago, magazine publishers were in fact magazine publishers and not much else. But when the web started grabbing consumers’ attention and marketers’ dollars, relying on a single product line with declining revenues and rising postage costs became an unsustainable business model for many publishers.

Magazine companies survived by cutting – staff, titles, and circulation -- and by creating new lines of business with web sites, apps, e-newsletters, events, etc. Every week, it seems, we hear about another publisher (or, rather, “magazine media” company) that’s now getting most of its revenue from non-magazine ventures.

Meanwhile, search engines and real people have learned to avoid content farms and keyword stuffers and instead to seek out sources of reliable information. Both seem to be concluding that having a “real” – that is, print – publication correlates with well written, reliable, and objective information. (See How Google Is Becoming the Magazine Industry's New Best Friend for more on this topic.)

No mass
Print is still in the mix, but it serves a different purpose. Advertisers are no longer looking to printed magazines for mass; they have more efficient methods of getting eyeballs. Print ads are now about engagement, about targeting a particular psychographic and mindset, and about demonstrating credibility and stability.

So despite the death-of-print predictions of a couple of years ago, for the foreseeable future the path to publishing profitability seems to include print. But not too much of it. Bloated circulation numbers are less relevant to advertisers. And they’re less sustainable for publishers, especially after the big January hike in postage rates (which may have affected the Periodical numbers in February) proved once again that we have to become less reliant on the Postal Service.

Consider the example of Politico, which a few months ago was a (fairly obscure) web site but can now call itself a "magazine" because it gives away a few thousand printed copies per issue. Its web traffic is up 57% over last year, according to’s February unique-visitors statistics.

Or consider Newsweek, which recently was running away so fast from its past and from print that its Internet presence was buried under a mediocre web site. Its recent print-relaunch issue generated massive buzz that helped boost web traffic by 25% last month, all with a print run of only 70,000 copies. At that rate, Newsweek won't even print as many copies in the next 12 months as it did just a few years ago for a single issue.

But that doesn’t matter. For publishers, the important thing is having a presence in print, almost regardless of how many copies they actually print.

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