The ad economy is expected to improve in 2010, if modestly, as consumers begin spending again and marketers ramp up their advertising to reach them.
The question, as in all recoveries, is who will be lifted with the rising tide in spending?
Magazines most likely will not be, and in fact 2010 could be a worse year than 2009 in some ways. More titles will fold, and probably bigger titles. Others will cut back circulation and frequencies while raising newsstand and subscription prices in an attempt to reduce losses, but the losses will continue.
We will see more efforts to shift into digital publishing by means of mobile apps and the like, and publishers will step up belated efforts to expand onto the internet, but whatever successes they see will fall well short of making up for their losses on their print publications.
Some magazines will defy the trend. The traditional women's service titles have done surprisingly well through this ad recession. But the exceptions will be few.
Print is by no means dead. People will always read magazines. But as readers continue their drift to the internet, and as advertisers follow, the economics of magazine publishing are undergoing a dramatic change, and none of it bodes well for mainstream publishing.
To gather what 2010 holds, it’s worth looking at where magazines have come from in recent years. Back in year 2000, a good year for publishers, the top several hundred titles tracked by Publishers Information Bureau reported 292,498 pages of advertising. Through September of this year, publishers reported 122,614 pages. If the year ends with, say, 160,000 pages that would be a decline of 45 percent. That hurts.
Some of the worst hurt came this year. When 2009 is over, magazine ad revenues will be down 19.2 percent, following a 10.7 percent decline in 2008, according to a recent forecast by Magna.
Magna forecasts revenues to drop another 6.2 percent next year and to continue to decline through 2014, if at a lesser pace.
Declines in circulation are not nearly as severe but still notable. Through the first half of 2009, total paid and verified magazine circulation was off 1.19 percent, according to the Audit Bureau of Circulations, following a 0.86 percent decline during the second half of last year.
But what was alarming were the steep declines in newsstand sales, regarded as a key indicator of the value consumers place on magazines. Through the first half of 2009, newsstand sales fell 12.36 percent, and that came after an 11.12 percent decrease in newsstand sales during the second half of 2008 and a decline of 6.34 percent in the first.
There were two big-buzz magazine stories of 2008: the sale of BusinessWeek for cents on the dollar and the huge cuts at Conde Nast that led to the closing of four magazines, including Gourmet, and dozens of staffers on the streets. That followed the shuttering of Portfolio, the ambitious business title the publishing house launched in 2007.
Those stories came atop the dismal quarterly PIB reports of sliding ad pages.
Here are some things to watch for in 2010:
--More restructurings along the lines of we saw at Conde Nast. All the major publishing houses are reevaluating their portfolios with an eye to chopping money-losing and redundant titles.
--More big titles closing. Most of the closings during this ad recession have been smaller and often independent titles without the deep pockets to weather an extended downturn. But as revenues continue to decline we will likely see a rash of big titles being shuttered.
Entertainment Weekly, the Time Inc. publication, is at the top of the list as a title that could well be axed in 2010. Back in October, the Grim Reaper, who tracks magazine closings on the web site magazinedeathpool.com, wrote of EW: “Ad pages are plummeting faster than Jon Gosselin's popularity with women. It's thinner than the last photos of I saw of Mischa Barton.” He predicts it will be folded into People.
--Continuing woes at the newsstand. “Unfortunately, newsstand performance is very dependent on economic conditions, and there is little indication that supermarkets, discount stores, drugstores are recovering,” says John Harrington of the New Single Copy, which tracks newsstand sales.
“Additionally, a number of key retail analysts say that consumer attitudes may have permanently changed, maintaining a frugal mindset even after their financial conditions have improved. That’s not good for impulse items like magazines.”
--How BusinessWeek fares under its new owner.
Can Bloomberg return the long-ailing business title to profitability by slashing costs and refocusing editorial to a more general-interest readership? Or is it simply too late? If Bloomberg can pull it off, that would bode well for the business category and magazines in general.
