Wednesday

Reader's Digest
trimming circ by 1M

Will end sweepstakes for recruiting subscribers

   Reader's Digest might seem like an unlikely magazine to be emphasizing quality of circulation over quantity, but that is just what it's doing.
   Starting in January, the Pleasantville, N.Y.-based general interest title is taking its rate base down from 11 million to 10 million. The reduction will be accomplished by eliminating sweepstakes as a source of circulation and cutting back on use of subscription agents. Both methods of acquiring subscribers tend to generate poor renewal rates.
   Reader's Digest, which had already dialed back its circulation guarantee twice since 2001, when it stood at 12.5 million, says it will keep the new rate base for at least five years.
    With the cost of circulation acquisition rising, slashing rate base is a way to improve profitability while opening up Reader's Digest's pages to advertisers who previously found themselves priced out.
   In a further bid to make the title more attractive to advertisers, Readers Digest Association is working to lower the magazine's median reader age by encouraging older subscribers to switch to the large-print edition of the magazine. Both the large-print edition and Selecciones, Readers Digest's Spanish-language companion, have experienced double-digit circulation growth over recent years.
   Reader’s Digest has given away more than $200 million in prizes since it began running sweepstakes in 1962. Sweepstakes-generated subscriptions, which once constituted more than 50 percent of the magazine’s circulation, now account for only about 8 percent.
    Across the industry, sweepstakes operators including Publishers Clearing House and American Family Publishers were forced to curtail their activities dramatically in the late 1990s under pressure of lawsuits from the states, which accused them of misleading consumers.
   Facing lawsuits from 32 states and Washington D.C., Reader's Digest Association agreed in 2001 to pay a settlement of $8 million.
   One factor that will help compensate for Reader’s Digest's loss of sweepstakes as a source of subscriptions is the company’s purchase of Wisconsin-based Reiman Publications, a publisher of advertising-free cooking and special interest titles. Reader’s Digest says Reiman has provided it with 250,000 new subscriptions.
   In the first quarter of 2003, ad pages in Reader’s Digest were down 12.8 percent from last year, totaling 200.2. Ad revenue fell 19.1 percent to $49 million, according to the Publishers Information Bureau.

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