Editorial: Circulation's Bad Times

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Magazines are having a tough time finding subscribers these days. Circulation has been flat for several years. The Audit Bureau of Circulation says numbers were down for five of the 10 largest paid-circulation magazines last year. Newsstand sales have dropped as much as 30 percent. Total ad spending declined for January and February, too, thanks to the economy. The ABC board is making long overdue changes in how it measures subscribers as it gave initial approval this month to counting a subscription at any price as paid circulation. The qualifying rule currently is 50 percent of the cover price. Using sweepstakes to solicit subscriptions is all but dead, the stampsheet marketers hit too often with lawsuits from state attorneys general. The latest to settle is Reader's Digest, which agreed this month to revamp its direct mail sweepstakes disclosures and pay $6 million in restitution to consumers in 32 states who made purchases of $2,500 or more from 1998 to 2000.

The cost to deliver magazines isn't helping the situation, either. The U.S. Postal Service raised the periodical rate 10 percent in its latest increase, and another rate case will be filed this summer. (Expect an average increase of 15 percent for all mail categories. The USPS is in dire straits, folks.) The only success story of last year: Oprah Winfrey's O magazine, which began with a circulation of 500,000 and increased to 2.16 million after just five issues. Readers liked what they saw, and the circulation skyrocketed accordingly.

Dan Capell, publisher of Capell's Circulation Report, told me direct mail still accounts for 24 percent to 25 percent of new subscriptions, though it's down from 30 percent a few years ago. That must explain the 11 solicitations I received in a recent 10-day span, with titles ranging from Time to Computer Gaming World and Yahoo Internet Life (actually, I got two from Yahoo). Most of these can be attributed to a recent subscription to eCompany Now because my name is spelled wrong. Two offers were in the form of e-mails, a growing area but one that Capell doesn't recommend because e-mail addresses can go bad so quickly.


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