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Unconventional Business Models in Independent Magazine Publishing |
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| Dec 12 2007, 7:45 AM EST (current) | brm237 | 44 words added, 4 photos added |
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by Ben Muessig
A decade ago, when the internet was nascent and the economy was strong, the magazine business wasn't a safe industry. Way back in 1998, when Slate was groundbreaking and blogging hadn't yet replaced Geocities.com, media scholar Christopher Harper wrote that "only 1 in 10 new magazines will succeed and hundreds each year don’t even get off the drawing board. Dozens of publishers never produce a first issue, either because of dismal test results or a lack of money. Dozens more fail in their first couple of years" (29).
Magazines do not fail because of their content. They fail when they lose money. Magazines "are subject to factors of success or failure much as are other commercial enterprises" (Wollesly, 51). So far this year, 20 magazines have gone defunct or suspended publishing. In 2006, 36 magazines went under.
Considering the climate for print media today, it's surprising that the number of casualties isn't greater. According to this year's Project for Excellence In Journalism's "State of the News Media," the foreseeable future looks no brighter: "After a series of down years, there is no projected upturn on the horizon, and falling subscriber bases may be leading advertisers to look elsewhere to spend their dollars."
In recent years, magazines large and small have been ambushed from all fronts by losses in readership , declining ad sales, and increased postage rates.
For an independent magazine publisher, the traditional profit structure of the magazine industry is no longer solvent. The classic two-tiered business plan of ad sales and magazine sales is no longer viable. If you intend to start a new magazine, you'll have to find a different profit orientation.
Sponsors
The easiest way to put out an independent magazine is with a trust fund. If you don't have one, seek investors. When looking for investors, follow Slate's model and aim high. The online political and cultural magazine survived on a stipend from Bill Gates' for eight years. In a 2002 interview with CNET, former Slate editor Michael Kinsey admited that Slate had never been profitable. "It just hasn't gotten there yet," he said.
Microsoft funded Slate until 2004.
-image from www.slate.com
When Microsoft sold Slate to the Washington Post two years later, the magazine had only yielded one quarter in the black and was a "break-even proposition on revenue of about $6 million." Yet with Microsoft's funding, Slate was able to persist a prolonged and unprofitable adolescence that allowed it to mature into a successful magazine. A publication with smaller pockets could never survive eight years in the red.
If you can't find a multi-billionaire to keep your magazine afloat, look for different kinds of investors. Vice Magazine, the hip lifestyle glossy that has defined cool for the better part of the decade, debuted in Montreal, Canada in 1994, funded bywelfare money.
If you can't find an investor, the rational progression would be to seek money through advertising. But why waste your time trying to make hard sells? You could always go with…
If you can't find a multi-billionaire to keep your magazine afloat, look for different kinds of investors. Vice Magazine, the hip lifestyle glossy that has defined cool for the better part of the decade, debuted in Montreal, Canada in 1994, funded bywelfare money.
If you can't find an investor, the rational progression would be to seek money through advertising. But why waste your time trying to make hard sells? You could always go with…
No Advertising
Some publications have achieved relative success nixing ads entirely. With a hefty $10 cover price, The Believer, the lit mag published by lit magnates Dave Eggers and Heidi Julavitz, survived sans print advertisements from 2003 until this summer, when the indie mag "began running one tastefully designed ad per issue."
Until 2003, The Believer did not run advertisements.
-image from www.believermag.com
The Sun Magazine, which retails for $7, has been running ad-free since 1990. After 16 years taking advertisements, the Sun cut ads because its editor "wanted the magazine to be like an intimate conversation between reader and writer, and he didn't want that conversation to be interrupted by a sales pitch." With a high enough cover price, it's possible for a magazine to cover costs without advertising. Not to say you'll be rolling in money – this sidebar requesting tax-deductible donations says enough.
There's an audience that seeks ad-free media and it's not just Noam Chomsky and Marshall McLuhan. By coming out ad-free, a magazine can reach a demographic that is sick of advertising. Considering the success of magazines like Adbusters (which is almost entirely free of ads), and recent legislation in Sao Paolo, Brazil that banned all outdoor advertisements, it seems that an anti-advertising movement is gaining momentum.
Creating a magazine without ads does more than just build a niche audience – it makes life as a publisher easier. Without needing to sell ads, you might have enough time to actually be involved in the part of magazine production that drew you to the field in the first place. If you're planning to start a magazine with a larger staff, cut the business department out of your budget. Going ad-free can save you time and money in everything from office space to salaries – just make sure you're making enough from retail to support your costs and pay your employees.
If you've built a solid brand, you'd be surprised how much people will pay for an ad-free magazine. The most recent issue of the Soho-based fashion mag, Visionaire, retailed for $250. A four-issue subscription costs $675. Although the magazine includes no traditional ads, it accepts sponsorship from high-end brands including Gucci and Hermes. Visionaire also limits its circulation, printing between 1000 and 6000 copies per issue.
"Making your magazine limited run will make your fanbase feel that that print version is important – that they need to own it themselves," said Fubz, the publisher of the independent art and culture magazine Beautiful/Decay.
By removing advertising, charging such a steep cover price and limiting its circulation, Visionaire has become more of a luxury item than a magazine. Yet even with its expensive price tag, Visionaire barely breaks even and never pays its contributors(considering that the contributors include fashion icon Marc Jacobs, musicians David Byrne and Michael Stipe, and film directors Wong Kar Wai and Pedro Almodovar, that might not be a big deal).
If you try going ad-free, but your retail sales aren't covering your costs of production, make your magazine…
A Jack of All Trades
In 1998, Harper wrote that at the helm of "most magazine start-ups is a young, energetic, never-say-die individual who, if he or she weren't selling a magazine, might enthusiastically be selling something else; someone who would sell the house, sell the car, sell the home-heating oil, if need be, to make his or her magazine go" (54).
This might have been true a few years ago, but today, to make a magazine survive, you have to sell all of these things and more.
"Unless you have a backer, it's impossible to create a real, fully functioning print magazine in 2007 without numerous streams of revenue," Fubz said. "We don't profit on our magazine, I mean we barely do, but it's nothing to talk about. The money comes from the apparel and the online store. We started selling things online, making t-shirts and throwing parties because it was a good stream of revenue."
Beautiful/Decay makes most of its money from its clothing line and its online store. These revenue sources rely on the strength of the brand that Beautiful/Decay has built since its first issue in 1996. The website and online store are viable because visitors trust the magazine's content. The clothing line thrives only because it reflects the styles of graphic design and contemporary art depicted in the print magazine. Although the magazine is by no means an afterthought, economically it is the least productive part of the Beautiful/Decay brand.
Beautiful/Decay also sells clothing and promotes parties.
-image from www.beautifuldecay.com
Magazines such as Vice make most of their profits from alternate sources of revenue. Alongside the print magazine, Vice Records releases scenester music from artists including Bloc Party, The Streets and Justice. Vice publishes fashion books available at Barnes and Nobles. Recently, Vice launched VBS TV, an internet television venture funded by Viacom that targets Vice Magazine's demographic with programming about skateboarding, independent music, and environmental issues. A staffer who wished to remain anonymous recently explained to me that Vice makes a significant chunk of its money from its marketing arm, Virtue, which offers "traditional ad agency services" to other brands, looking to cash in on Vice's edgy appeal.
The hip, downtown magazine Frank151runs a barber shop on Essex St., in the Lower East Side. "The Chop Shop" creates an alternate revenue stream and allows the magazine to add cool points by blogging about the cultural icons who show up for trims and shape-ups. Frank151 also profits from its marketing branch, Malbon Bros Farms, which promotes brandssuck as Coca Cola and Ride Snowboards.
If you make enough money off of alternate streams of revenue, you can release your magazine at a loss. When the magazine doesn't need to be profitable, you can print whatever kind of content you'd like. Just remember, if you choose to incorporate alternate streams of revenue, they'll only succeed so long as your magazine remains relevant. The only way to keep your magazine relevant is to keep people reading it. If you're having a hard time maintaining readers, why don't you just…
Give it away
Free magazines aren't exactly a new idea. Reader's Digest operated as a take-one from 1922-1955, but rising production cost forced ads back into its pages (Wolseley, 50). In recent years, plenty of independent magazines have adopted free models.
"The thing with free media, is that if you do it right, it's much more effective," Fubz said. "When you have a free magazine you take yourself out of bookstores and big chains, but you put yourself into other markets that mags can't penetrate, like coffeeshops, clubs, and skateshops."
Reaching these markets gives your magazine access to a youthful demographic without the competition you'd face at newsstands and bookstores. If you can draw these readers, you should have a solid chance to land advertisers who want to reach this exact demographic. Now all you've got to do is pray that the kids take some of your take-ones.
"Most free magazines don't get looked at all. It's almost impossible to create something national and free," Fubz said.
Vice Magazine and Arthur, a Los Angeles-based music magazine, are two of the few free, indepenent magazines that are national.
As a free magazine, Vice reaches a different audience than retail publications.
-image from www.viceland.com
If you're set on free content and you want a wide audience, why don't you just take it...
Online
The future of the magazine will be online. Today's tweens have never lived without the internet. With adolescents choosing the net over the mags, now is the time to start an online magazine.
"Unlike their print counterparts," write Randy Reddick and Eliott King, "Web magazines can be "published" incrementally as different sections are updated or changed. A weekly or monthly magazine may be changed virtually every day or even several times a day. Moreover, magazines can experiment with different types of information such as audio and video. Finally, since print magazines generally carry longer articles than newspapers, online magazine publishers seem to have been bolder in experimenting with new methods of gathering and reporting information (231).
Web magazines, especially those that cover specific niches, have proven to be influential, if not wildly profitable. Perhaps more surprising than the success of Slate and Salon has been Pitchforkmedia's arrival as anincreasingly relevant music magazine, deemed by the music blog Stereogum to be the "The New Rolling Stone."
The web allows magazines to take new shapes. Perhaps more importantly, the web gives magazines a means of cuttings costs and making profits. Magazines no longer have to waste their money onpaper, ink and shipping, nor must they limit advertising to a set number of pages.
Due to their short history, there are few rules when making an online magazine. Just keep this in mind – online users expect free content. When Slate removed a paid-subscription mondel, the website's "readership grew tenfold and advertisers six times over."
Otherwise, just be creative and capitalistic.
"When you do your website, do what nobody else is doing," Fubz said. "And find a way that there's always a commodity that you can sell."
Bibliography
Harper, Christopher. And That's the Way It Will Be: News and Information in a Digital World. New York: New York University Press, 1998.Bibliography
Randy Reddick and Elliot King. The Online Journ@list: Using the Internet and Other Electronic Resources. New York: Harcourt Brace College Publishers, 1997.
Wolseley, Roland. Understanding Magazines. Ames, Iowa: Iowa State University Press, 1965.
