A Rough Year for News Magazines
A year ago, the news magazine business was in a slump. The number of advertising pages sold was down in 2005 for many titles, and down precipitously at some of the biggest, including Time and Newsweek.
The industry was hoping 2006 would bounce back. It didn’t happen.
Most of the news magazine titles—Time, Newsweek, U.S. News & World Report, The Economist, The Week, and The Atlantic—experienced a basically flat 2006, according to a count of ad pages by the Publishers Information Bureau.
Two magazines broke from that pattern. The New Yorker had a particularly difficult year, and the National Journal enjoyed an unusually good one.
News magazines were not unusual. The whole magazine industry was flat in 2006 (ad pages dropped .1% from 2005 to 2006).
There was also some shifting among advertising sectors. Drug manufacturers advertised more (a 13% increase in pages), as did retailer advertisers – department, discount and high-end stores – which bumped up pages by 10%. But these were offset by the 14% drop in automotive industry advertising last year.
The news magazines in particular seemed stuck. While the year started strong for the magazines, it got weaker as it went on. By the time it was over, the number of ad pages in the three big newsmagazines—Time, Newsweek and U.S. News—barely budged in 2006. Time’s pages were up less than one percent (.8%). Newsweek’s inched up even less (.1%). U.S. News was slightly more robust (1.9%).
But after the difficulties of 2005—when all three titles were down in ad pages and Time and Newsweek endured double-digits drops—the 2006 numbers were disappointing.
(For magazines, the number of ad pages is generally considered a more reliable measure than ad dollars. The reason is that total ad revenue dollars are estimates based on rate cards, which may not accurately reflect what advertisers are actually paying.)
Among the other newsmagazines, The Economist posted minimal gains in pages – up 1.1%. The Week, which actually caps the number of ads pages in every issue, had only .a .7% increase. But for 2006, both publications reported ad revenue gains that seem credible because their growing subscriber bases are allowing them to charge higher rates. In short, they appeared to be charging more for those ads.
The story at the New Yorker was more complicated. The magazine gained subscribers in 2006 (it added another 10,000 through the first six months of the year for a total of more than 1.06 million), but the number of ad pages fell markedly (nearly 13%). That followed a 3% drop in 2005. And the 2006 slump in ad pages also came with a reported 5% decline in ad revenues.
What explains the drop? One reason for the decline may be New Yorker publisher David Carey’s moved to become publisher of Conde Nast’s business magazine Portfolio, set for an April launch. Another theory holds that in an age of specialization and niche advertising—especially with the web—the more eclectic content of the New Yorker may not be as appealing to advertisers.
At the other end of the spectrum was National Journal, the Washington-based policy journal enjoyed a 13% increase in ad pages in 2006. It should be noted, however, that it has less than half the ad pages of the other larger titles we track, including the New Yorker. Part of the publication’s success may be linked to the 2006 election, which generated huge media and voter attention and became a referendum on the Iraq war.
Overall, the broader trends in the industry appear to be a cause for concern. Time’s ad pages are down in the territory they were in early 1990s. U.S News’s ad pages are below where they were throughout the 1990’s. Newsweek’s are down to where they were in late 2001, after the 9/11 attacks.
As is case in the newspaper industry, the growth of online news has eroded some of magazines’ reader and revenue bases, and thus, the industry is looking to redefine the concept of circulation.
That trend is, in part, the reasoning behind a new approach Time is trying with advertisers. Parent company Time Inc. announced in late 2006 that the magazine was going to change the way it measures audience from subscribers to readers, while it slashed its subscriber base by 750,000 and bumped up its cover price by $1 to $4.95. (Time magazine also recently endured another round of sharp cuts – 50 people let go and three domestic bureaus closed.)
Time plans to utilize a weekly survey that asks 2,500 adults whether they have read specific issues of the magazine. The goal is to give the magazine and its advertisers a better idea about which cover issues attract readers and to provide new readership metrics that are solid enough to replace circulation figures for advertisers.
The other newsmagazines will be watching and if Time’s approach succeeds, it may have company. There are some serious questions about what the new method for counting readers will mean to magazines and how it will work for advertisers. But in this difficult economic environment, the magazine industry is certainly open to new ideas and strategies.