• by Frank Saxe , December 4, 2002

Premiere magazine, among the top titles targeting the mainstream reader obsessed with all things Hollywood, is preparing to raise the curtain on the biggest debut in its recent history. The February issue will sport a new look and a new publishing strategy, one that Hachette Filipacchi Media president/CEO Jack Kliger vows will better serve advertisers and readers alike, while at the same time building a stronger company. It may also be the beginning of a trend in the magazine industry.

“A lot of magazine companies are trying to put their houses in order,” says Kliger. “In the case of Premiere, we had to figure out just what the core readership was and how we could get more money from them.” Its solution was to raise the cover price from $3.99 to $4.50, and increase its introductory subscription price by 20%. As part of a new nine-point strategy, Premiere will also return to its larger trim size and it will get a more contemporary saddle stitched binding, along with eight more edit pages.

Hachette predicts the changes will likely mean the lost of a nearly a fifth of its readers, so it is decreasing its rate base by 100,000 to 500,000. “We got tired of trying to attract marginal readers,” explains Kliger. “This also allows us to set our long-term circulation strategy in a way that doesn’t make a priority the propping-up of a circulation level that is higher than it should be.”

Within the next few months, Hachette will apply the same strategy to two other titles as well. Sound & Vision will drop its rate base to 400,000 from 450,000 and raise its cover price from $4.50 to $4.99, while American Photo will reduce its base from 250,000 to 200,000 and raise its cover price from $3.99 to $4.50.

“The whole industry has let its economics get ass-backwards,” continues Kliger, adding, “When advertising was fairly bountiful, the concept of using circulation as a loss leader that was compensated for by advertising, was one thing. Today, costs for circulation are higher and you can’t just go out and drive your circulation regardless of how much it costs to produce and deliver the product and expect that advertisers will fund that part of your business.” Perhaps partly because of that, he says the advertising community has reacted positively to an announcement that would typically be seen as a dire prognostication of a magazine’s health. “Advertisers don’t necessarily see it as sign of weakness. They see it as an approach to managing our business that doesn’t put too much emphasis on ad revenue.” While admitting the changes have made Hachette ad salespeople somewhat nervous, Kliger says buyers’ reaction has tempered that anxiety. “We are giving them a targeted vehicle. It should always have been bought as a targeted vehicle. We don’t believe that 600,000 versus 500,000 is the core number. The question is, what is the quality and involvement of the readers that advertisers are getting. If we’re asking people to pay more for the product and we’re giving them more product, we believe you are going to have a more involved readership that is core to connection with the magazine.”

Premiere’s ad sales needed a jumpstart. Through October its ad pages were down 9.8%, although it appears momentum is in Premiere’s favor. Its December ad pages were up 65%, pushing the fourth quarter to a 35% increase over 2001. The magazine has attracted 60 new advertisers in 2002, including BMW Mini, Corvette, Glenfiddich, J-Lo Fragrance, Kenneth Cole Fragrances, Mastercard, and Skyy Vodka. “Our success on the advertising side reaffirms the vitality and relevance of the Premiere brand,” says publisher Kim Pinto Korda, noting it is increasingly being seen as a way to reach the young affluent innovator demographic. They hope the impending changes will help move that effort forward.

Investors are also giving it a positive review, says Kliger. “It is much more logical to sell fewer units at a higher price. Investors more than anything want to know that you’re managing your business effectively and profitably, and selling circulation at a loss is not a smart business play.”

Circulation has been a tough haul for the 15 year old Premiere for sometime. Through the first half of 2002, Premiere’s circulation rose 1.9%, yet newsstand sales declined 18.7% according to the Audit Bureau of Circulation. With a 12.5% increase in its cover price it would be expected that newsstand sales would continue to suffer post-redesign. Yet Kliger says the opposite may be true. “We expect this new [larger] format and editorial content will actually help improve our newsstand circulation.” To help drive that, Hachette is counting on increased point of sale promotion, particularly at strategic high-traffic locations such as airports, bookstores, and train stations.

Kliger expects it will be at least six months before they have a firm sense on whether advertisers and readers embrace the changes. In the meantime, Hachette is reviewing its other titles to see if a similar strategy should also be applied. “We will take each one on a case-by-case basis,” he says.

Moreover, Kliger believes they are simply the beginning of a larger trend in publishing. “More and more magazines are going to be doing this, and I think advertisers will applaud these moves if they make good sense from the consumer product’s perspective. Everyone will always negotiate here and there, but overall, advertisers do not feel raising your prices to the consumer, charging more and giving them more, is a bad move – even if it means lower circulation.”