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The Future of Magazines: An Essay

March 1, 2010

Why magazines should embrace a swag business model

The print publishing industry, like the music industry, is struggling to find new ways to make money. Currently, magazines are focusing on three main revenue streams: advertising, newsstand sales and subscription. Given the number of magazines that folded in 2009 (notably Gourmet, a popular food and drink magazine, and Country Home, a magazine that had over a million circulated copies), it is not a stretch to say that the standard avenues of income for magazines are dwindling.

As a solution, many magazines have been focusing on drawing readers and advertisers through smartphone and tablet applications. The problem with this is that it merely extends the problems that magazines already have (acquiring subscribers and advertisers and making sales) into different mediums. Instead, magazine publishers should broaden their horizons and look into new, less related ways of increasing profit margins.

Google and successful webcomics paved the way

Five years from now, successful magazines will be defined not only by how many readers are aware of their brand but by the size of the brand. Successful web-based businesses, such as Google and webcomics like Penny Arcade and XKCD, survive because they became more than what they started out as. Google started as a search engine and now provides e-mail, maps, calendars, the unique Google Street View and much more.

Penny Arcade began as solely a webcomic, and now runs a video-game convention, a charity for children, an online store and even a scholarship program. Magazine publishers view expansion in the digital age more narrowly than these successful web brands. Cathie Black, the president of Hearst, sees “360-degree experience” as “offering liquid content by using print, web, mobile and television to get the brand to the audience.”

Magazines should follow the well-traveled path

Follow that car! I mean, webcomic

Instead of focusing solely on making the public aware of the brand, magazines should leverage the brand recognition that they already have to sell products, even if they aren’t directly related to magazine publishing.

Penny Arcade has successfully done this; they began by building up a following for their main product (the comic), but instead of selling only prints of the comics and collections in book form they chose to expand and now they sell a Penny Arcade card game, t-shirts, video games. These are all products that appeal to the Penny Arcade’s audience (mainly young men). Any magazine can follow this example by knowing their audience and creating and selling products for them. For example, Vogue could create a fashion line and use the brand recognition they have in the fashion world to sell it.

It’s that subscription-commitment phobia again

Developing these alternate revenue streams is especially important now as subscription and circulation decline. The Globe and Mail reported that “In the first six months of 2009, of the nearly 600 consumer magazines in U.S. and Canada to report such figures, 67 per cent saw their paid circulation drop from the same period last year.” Part of the reason for this decline is that “the market is so much more fragmented.”

The internet provides many options for potential subscribers, and as a result choosing one magazine to subscribe is a heavy commitment. By paying to subscribe to, say, Canadian Living, and will likely not also subscribe to Chatelaine. What is the benefit of subscribing when readers have so many options to choose from online? As more and more content publishers appear online, choosing to commit to one hinders rather than helps.

A successful magazine will not be one that does simply force its current business model onto new technology but one that is able to adapt. It’s not enough to use the web to create a fancy gimmick like “the December issue of Esquire which features Robert Downey Jr. perched on top of an augmented reality box.”

Consider Erick Schonfeld’s response to the Sports Illustrated iPad application on his blog, Tech Crunch: “If I still read magazines, I’d much rather consume them in this form than on paper.” Presenting the same content in new ways will not revolutionize the business model and miraculously create profits, just as the advent of the internet did not. In order to succeed, magazine publishers need to recognize that what they need are new revenue streams, not different ways to promote old ones.

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