The numbers are sobering. In the US 525 magazines were shut down in 2008. So far in 2009, 87 more titles have folded.
In a sign of the times, the April issue of Portfolio magazine set a dubious record. With 106 total pages and 21 ad pages it is the slimmest monthly issue ever published by Condé Nast.
The revenue flow for magazines is simply drying up.
eMarketer estimates consumer magazine print ad spending in 2008 was down 7.1% to $13 billion.
2009 is expected to be even worse, with ad spending forecast to drop a precipitous 16.2%.
“The shift in print advertising revenues to other media, particularly the Internet, will continue to exacerbate the problem,” says Carol Lynn Krol, eMarketer senior analyst and author of the new report, Consumer Magazines: Rethinking Paper and Pixels. “As the ranks of publications keep thinning, 2009 will be a year of survival for only the fittest publishers.”
What’s to be done?
“Years of inflated circulation rate bases have backfired,” says Ms. Krol. “Magazines chased volume, banking on a larger set of readers to justify advertising rate increases. Unfortunately, that bloated universe of readers often proved less profitable.”
Some publishers, such as Newsweek, have responded by pruning their audiences to a smaller, more desirable demographic.
The big move in publishing, however, is online. But the transition may be coming too late for many titles.
“While there are pockets of innovation, many print brands have fallen far short of the mark when it comes to their online presence,” says Ms. Krol. “Given the state of the business, publishers need to act quickly to capitalize on brand assets and provide accessible, compelling content to readers—who already have access to a wealth of content online.”
“You have to get your brand online—95% of the magazines out there haven't really done that,” Jim Spanfeller, CEO of Forbes.com, tells eMarketer. “They’re not putting out a product that is compelling for an online audience.”
Digital ad revenues for consumer magazines averaged 6.4% in 2008, according to an analysis of 11 major magazine group publishers by Advertising Age, suggesting the publishers have a long way to go in building their digital businesses.
Time Inc. tallied the most digital money in 2008—$245 million. However, that still only accounted for 10% of its total ad revenues. On the other end of the scale, Bauer Publishing had no revenues traced to digital ads.
“The good news is that—unlike many newspaper publishers—magazine publishers have not simply taken all their offline content and offered it online free of charge,” says Ms. Krol. “As a result, they have the opportunity to develop premium content models and to package the offline and online products together.”