Magazine publishers still giving away the store
Big magazine companies continue to get serious about harnessing the latest digital innovation to remake their businesses for a new media age – so why are they still kissing opportunity goodbye when it comes to their core print brands?
Hearst Corp. in recent days scored headlines for a raft of digital developments, including the expansion of its digital marketing shop iCrossing in Latin America, the broadening of its consumer marketing, e-commerce and content pact with Amazon.com, the launch of a campaign with jewelry brand Hearts On Fire that integrated print inserts in titles such as Cosmopolitan, Harper's Bazaar and O, The Oprah Magazine with an online sweepstakes, and the conversion of a majority of its magazine websites, starting with Good Housekeeping, to HTML5.
Meantime, Hearst Magazines president David Carey said at this week's paidContent Advertising Conference that “new device opportunities” should allow Hearst to move its digital revenue model away from advertising dependency and toward 50/50 equivalence with reader revenue, the site reported.
And yet, with the rebound in magazine advertising, publishers including Hearst seem to be back to their old tricks when it comes to discounting those paper subs, keeping paid circulation afloat by giving away the fruits of their labor, often with the aid of direct marketing appeals.
For too long, critics (including this one) have argued that magazine companies – faced with a perfect storm of exploding media choices for consumers, stratospheric production and distribution costs, and an unpredictable economy and advertising environment – ought to quit foolishly forfeiting circulation revenue and start charging consumers what their products are worth. They have been a little bolder over the years with the pricing of newsstand issues. But when it comes to subscriptions, too many magazines, now enjoying double-digit gains in ad business, are back out there with those cut-rate offers, hawking magazines for mere pennies.
There are exceptions, like the premium-priced People and The Economist. And yet, most magazines can't seem to stop the madness.
In a blog post this week dubbed “The Insane American Magazine Business Model Is Back With a Vengeance,” self-styled “Mr. Magazine” Samir Husni, who heads the Magazine Innovation Center at the University of Mississippi's School of Journalism, complained of recent, ridiculous bargain offers from two publishing heavyweights.
Hearst, Husni points out, just peddled subs to virtually every magazine in its stable (save for the hot new Food Network Magazine) for about the price of a Venti latte. The $5 per year offer for such titles as Esquire, Seventeen and Redbook was billed as a “pre-holiday price, for one week only!” reported Husni. Meantime, a promotional email from Conde Nast invited subscribers to renew their annual subs to Vanity Fair and Wired for a deep discount – but it didn't stop there. In doing so, subscribers not only got a free gift, but also a complimentary, one-year subscription for a friend.
Husni urged publishers to “stop committing suicide.”
Yes, especially when they've got so much to live for.