Challenges to the Magazine Industry

Below is the short article by Hepworth who identifies 4 challenges: New Technology, Environmentalism, Distribution Costs and Illiteracy. We added another 2: Recession and competing media for a finite advertising budget.

A mighty

wind of change

for magazines

David Hepworth

Arguably, the magazine launch that is probably being watched with most interest in some

sectors of the industry is not on the newsstand. In fact it's not even on paper. It's a multimedia

facsimile of a weekly lads’ magazine called Monkey.

It was launched a month ago and goes out free to anyone who signs up for a weekly mailout.

Monkey comes from Felix Dennis's company, which is instructive. This is the firm that has made a fortune out of selling young men's monthly magazines such as Maxim and (in the US) Stuff. The fact that Dennis's newest product is a weekly that's not on paper suggests that Felix probably hasn't changed his mind since 2000, when he went round telling everyone who would listen that there were Four Horsemen of the Apocalypse (new technology, environmentalism, illiteracy and distribution costs) riding into town to cut a scythe through the bland certainties of the previous 25 years.

At the other end of the spectrum are the people exuding sunny optimism in November after the

British Society of Magazine Editors prizegiving, most of whom seemed to be saying “hold fast to your brand values, chase not short-term circulation gains, maintain editorial quality and you will outlast the storm". Cheerleader for this party is probably Condé Nast, whose December issue of GQ was so thick they ran out of folios.

I'm not sure I side with either party but at least Felix couldn't be accused of fooling himself. The

notion that magazines are temporarily afflicted by a gadarene rush downmarket with an accompanying decline in editorial standards and will eventually awake is a delusion. It's a delusion that ignores the fact that, no matter what anybody's survey says, teenagers don't read in the numbers they used to.

It's a delusion that ignores the evidence suggesting that a lot of the information people used to get from specialist magazines they now get from the web for free. It's a delusion that refuses to take note of the fact that a lot of the changes taking place are structural and permanent.

The teenage sector has already felt this mighty wind, which is why, earlier this year, Smash Hits closed in the UK and Teen People shut down in the US. (My colleague Andrew Harrison begs to point out here that Smash Hits is still a TV show but no longer a magazine while Top Of The Pops is still a magazine but no longer a TV show, which doesn't seem right.)

If the government continues its stand against junkfood advertising in young people's media, life in the teen sector can only get harder.

Men's monthlies, whether specialist ones such as Max Power or general ones such as Maxim, are

selling a fraction of what they once did and you can't attribute that entirely to the two weeklies, Nuts and Zoo. These two have been engaged in an energysapping, nipple-to-nipple, price-cutting contest that has seen their combined sales fall over the past year.

In the women's sector, the excitement has been mainly in the weeklies, though even here there are signs that growth is getting harder to come by, with Emap's launch First finding things tougher than anticipated and News International knocking out issues of Love It! at 30p (half its cover price). A few, such as Heat and Grazia, manage to stand aloof, but most are publishing on the back foot.

The newsstand is a war zone. The cumulative effect of all the gifting, price discounting and editorial saming is that the customer has no loyalty whatsoever. Duncan Edwards of National Magazines is not the only publisher of middle-market monthlies hoping for “a fundamental paradigm shift" away from its costly vicissitudes towards a subscription model. However, he also knows that giving massive discounts to subscribers who don't renew is even more wasteful

than paying the retailers to ensure “display". What everybody's finding is that people are no less keen on their favourite magazines. It's simply that they don't so readily go and seek them out.

The Monkey experiment is an attempt to export the magazine approach to selling advertising, which is essentially all about environment, to the web, where it's all about massive numbers. The economics of the magazine industry are traditionally rooted in the idea that a Vogue reader is worth more than a Glamour reader who is worth more than a Closer reader. The web flattens out these distinctions, which may explain why cost per thousand in that medium is so under pressure.

The rumours for the new year are that we will see a male Grazia, that the Face is coming back

as a website and that the News International bloke magazine is, as they say in Hollywood,

“in turnaround". But then again, as they also say in Hollywood, nobody knows anything.