2004 Annual Report - Magazine Economics

Data on the economics of news magazines reveal three notable trends.

First, while other genres have improved financially, news magazines have remained stagnant in terms of the ad pages they sell. In part this may be due to the fact that the news genre, unlike others, has not added any wildly successful books in the last decade.

Second, among the big three news magazines, there has been something of a shaking out. While the three were bunched together in ad page sales in the mid-90s, Time has now established itself as the clear leader, with Newsweek a strong second. U.S. News & World Report is third and losing ground. Some of Time's growth may be due to its ability to sell ad packages to several books as part of the Time Warner empire.

Third, The Economist and to a lesser extent, The New Yorker, are the two news magazines enjoying growth in ad pages and revenue. In the past 15 years, their revenues have more than doubled and their ad pages are neck-and-neck with genre leader Time - though The New Yorker has long been an ad page leader, this is a new development for The Economist.¹

The Industry as a Whole

Overall, the economic figures for the magazine industry look relatively stable. But looking deeper, there are some noticeable trends over the past 20 years and, more particularly the last decade, which bear notice.

Operating Profit for the ’Average Magazine’

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Magazine Publishers of America, Financial Review of Consumer Magazines 2001

* ’’Average Magazine’’ is an MPA composite of 65 different publications

Ratio of Ad to Editorial Pages in the ’Average Magazine’

1997 - 2001

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Magazine Publishers of America, Financial Review of Consumer Magazines 2001

* ’’Average Magazine’’ is an MPA composite of 65 different publications

Profit Margin of the ’Average Magazine’

1997 - 2001

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Magazine Publishers of America, Financial Review of Consumer Magazines 2001

* ’’Average Magazine’’ is an MPA composite of 65 different publications

’Average Magazine’ Revenues and Expenditures

1997 - 2001

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Magazine Publishers of America, Financial Review of Consumer Magazines 2001

* ’’Average Magazine’’ is an MPA composite of 65 different publications

A look at the "average magazine," a Magazine Publishers of America composite of 65 publications, shows a healthy industry as of 2001.

While revenues and profits took a hit with the recession of 2000-01, profit margins stayed above 15 percent. Average profits never fell below $13 million.²

Even more encouraging for journalists, publishers during the recession did not allow a smaller volume of ad pages to dig too hard into editorial pages. The "average magazine" was thinner in 2001 than in 2000 - 158 pages versus 174 pages the previous year - but considering the drop in ad pages due to the weak economy, it could have been worse.³ As ad pages fell in 2001, publishers allowed editorial pages to increase as a percentage of total pages. Some analysts also suggested that magazines might have benefited economically after September 11 through more newsstand sales, which bring in more profit than subscriptions. The terrorist attacks also may have led editors and publishers to publish more news pages, since events were so momentous.