Thursday, January 26, 2006


Understanding Our Industry

Tracking changes in magazine pages can help us under- stand what is happen- ing to the overall use of print. Ad pages are an important measure, because you don't need to adjust them for inflation.

For our industry, we're missing a part from the puzzle; circulation. This would give us implied run length. From other industry data, we know that circulation has been flat for 15 years. Recent postal data indicate that the total tons of periodicals mailed has been flat as well. All this has occurred at a time when the number of titles has been increasing.

But now to our data: for the 12 months of 2005, consumer magazine pages were up 1%. For 11 months of 2005, business publication pages were down -0.6%. Both of the organizations that report these data put the best face possible on the data, often reporting the dollar value of the pages. The consumer magazines data are based on "rate card" prices, similar to judging Wal-Mart's sales on retail list prices.

When compared to GDP, ad pages are clearly falling behind, an indication of a constantly changing media mix. While some are forecasting a crash in the magazine business, that doesn't seem quite likely to me. Publishers are still grappling with new formats and the creation of revenue streams from them. In the 1990s it was common to hear that "content is king." Yet you must eventually get to a bottom line: industries that cannot produce profits don't survive. That realization is causing incredible amounts of hand-wringing in the publishing business, and, of course, in ours.

In the long run, more low-circulation magazines seem to be an entrenched trend. This trend creates havoc with high-overhead, high- fixed cost publishing and printing infrastructures. Unraveling that structure is hard; organizations have an urge to protect legacy functions at great expense. Starting from scratch may actually be easier.

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