Outlook for 2012:
A year of struggle
Or rather another year of struggle, and more to come
By Diego Vasquez
Dec 22, 2011
This year brought mixed results for magazines, which saw advertising decline after a solid 2010 but also began to explore digital initiatives more aggressively.
Next year likely will bring more of the same ups and downs. While print revenue will continue its decline, a trend that will hold for the foreseeable future, digital magazines will become more commonplace.
Digital advertising won't offset the slide in print revenue. But there is long-term promise for the industry if it can figure out how to monetize this new media.
One forecast has overall magazine revenue bottoming out over the next several years and then climbing back as digital advertising and subscriptions take off. But even then revenues by 2020 will be just two thirds of what they were in 2007.
The need to harness the power of digital is thus more pressing than ever before, as evidenced by Time Inc.'s recent hiring of
new CEO Laura Lang, a woman with no publishing-side experience but with extensive knowledge of new media as head of the digital agency Digitas.
Analysts say that an industry-wide shift toward digital will happen within the next five to 10 years.
"It won't be next year, but it's not decades away," says Martin S. Walker, chairman at Walker Communications, a magazine consultancy.
"The only problem is, will there be something else that comes out that changes the landscape once more? Competitors to the iPad are beginning to come out, such as Android tablets and the Nook and Amazon tablets. So it remains to be seen what they contribute to the issue."
One major hurdle for magazines will be figuring out the new subscription structure. This past year
publishers tussled with Apple over its digital newsstand, objecting to some of the customer information sharing that the company insisted on.
But publishers have also struggled with their own attempts at building digital newsstands.
Earlier this year, after 18 months in the planning stage, a consortium of five publishers launched the
Next Issue Media digital newsstand, but it has not seen widespread success.
While it seems counterintuitive, publishers who usually compete with each other will continue to have to pull together to find the right model.
"It's still a problem to get people to subscribe to digital editions. Publishing companies are doing it differently--some are bundling, some are selling separate digital subscriptions," Walker says.
Still, for all the challenges and promise of digital media, print remains the main revenue generator for magazines, and print is headed into some tough years.
London agency ZenithOptimedia predicts that consumer magazine ad spending will slide 2 percent next year.
That looks optimistic compared to Brian Wieser's forecast for Pivotal Research. He predicts that magazine ad revenue will be off 4.2 percent next year, citing continued concerns about
declining circulation, which creates the damning perception of an industry in trouble.
This year ad pages will be down, though just how much remains to be seen. According to the Publishers Information Bureau,
pages were off 1.1 percent through the first three quarters of the year.
By contrast, ad pages were flat in 2010 and revenue was up slightly.
Walker says the ad page declines can be attributed to the weak state of the economy as much as to any advertiser trepidation about investing in magazines.
He thinks that, despite the predictions for continued decline next year, things could get better if the economy improves.
"Certainly the economy caused the ad slowdown," he says.
"But it seems to be turning and things should get slightly better next year. Except for if the issues the governments in Europe are having causes that economy to fall apart. That would be a negative impact."
As for which ad categories will hold up best, high-end advertisers seem to be sticking with magazines. Technology and financial companies advertised heavily to end the year.
But food and home furnishings were off sharply from 2010, a trend that may continue into the new year with the economic uncertainty hurting sales in both categories.
|
Magazines
Advertising Revenue
2008-2013 ($ Billions) |
|
Year |
Spending |
% Change |
|
2008 |
23,633 |
- |
|
2009 |
18,568 |
-21.4 |
|
2010 |
18,769 |
1.1 |
|
2011 |
18,621 |
-0.8 |
|
2012 |
18,213 |
-2.2 |
|
2013 |
17,814 |
-2.2 |
|
Source: ZenithOptimedia |
|
|
|
