Publishers Spinning Straw into Gold

NME-Cover-100thingstodothissummer-090616.magazine (1)Drop your price, sell more ads: How this innovation is working for some big name magazines.

If you want to survive in a changing world, you have to let go of old business models that are holding you back.

It’s the one thing I stress when talking about new revenue models in publishing. Digital has foisted great change on this industry. As with any time of great change, it’s also a time of great opportunity for brands that dare to innovate.

“While many magazines saw a decline on the newsstand, that doesn’t necessarily mean the readership has been impacted,” Jessica Goodfellow writes in The Medium. (Goodfellow is referring to the ABC audit numbers, the UK’s equivalent of the MPA report.) “This was the argument put forward by Sarah Perry, head of magazines and women’s media at Northern & Shell, which operates OK! Magazine, which saw a decrease in print and digital sales over last.

“What the ABCs fail to take into account, Perry said, is that there has been a general shift from people actively purchasing at the newsstand to consuming their magazine brand through other channels,” Goodfellow continues.

Those other channels – paywalled or free – represent a huge opportunity for publishers willing to step away from a business model that is no longer working for them, and adopt a true audience-centric approach.

In 2014 Hearst’s Cosmopolitan was in bad shape, with sales at an all-time low. Two years later, the title is one of the biggest success stories on the list, with a 59.9% increase in circulation.

How did they do it? They dropped their cover price and gave away 100,000 copies.

Some said it was a crazy idea, but it laid the groundwork for a return to robust ad sales. Advertisers want eyeballs and Hearst has definitely figured out how to provide them with Cosmopolitan.

Time UK is seeing similar results. Last year the brand repositioned its music title NME as a free magazine, gambling that the increased circulation would more than make up for the loss in sales revenue. It worked. They report that ad revenue was up 13% over the same time period last year and the audience continues to grow rapidly.

Paul Cheal of Time UK said: “NME has never been more influential and the brand is in a state of healthy growth. We’ve achieved big commercial wins across fashion, film and music this period including our first wholly native issue with Adidas, and advertising revenues have climbed by 13% in the period and 128% on the year. NME now reaches 2.4 million via social and NME.COM has 5.8 million unique users each month.”

There are a lot of different models out there – some make sense, and some, like relying on sponsored content as a main revenue source, could spell the death of media brands.

What’s happening now is a perfect storm for publishers. Advertisers still crave eyeballs, and consumers are increasingly tuning out digital ads. Meanwhile those same consumers want relationships with their favorite print magazines, and advertisers are looking for channels that best support their message.

Print – free, paid, or otherwise – is an advertiser’s dream. And voila, publishers see a new path the sustainable growth and ad revenues, one that’s built on a traditional and much-loved media.

Welcome to magazines in the 21st century.