• by Jack Wright , September 5, 2008

Reports of its death are greatly exaggerated.

To celebrate its 75th anniversary, Esquire became the first magazine to publish an electronic cover. Its October issue features words and images scrolling across the page, using electronic ink, with a battery life of 90 days. "Magazines have basically looked the same for 150 years," says editor-in-chief David Granger, who hopes the issue will end up in the Smithsonian (though it might be more at home in Times Square).

Hearst put a great deal of time and money into this publishing innovation, but let's get this out of the way and agree, before we proceed, that this is not the future of magazines.

The Securities and Exchange Commission announced in July that it would begin examining rumor-spreading intended to manipulate securities prices. The move came after Wall Street malcontents wreaked havoc in an already floundering mortgage market. "Traders know there is false information in the market. They need to think twice if they are going to pass it on," said a spokesman for the SEC.

Imagine if the publishing industry had such a regulatory body - authors of snarky stories on media Web sites being indicted for spreading false rumors about cataclysmic circulation plunges and job cuts. (Of course, some of the stories are true.) "We are advocates of our own demise," says Samir Husni, chairman of the journalism department at the University of Mississippi, but more commonly known as Mr. Magazine.

"I read a recent piece online that rated seven weeklies on which one was going out of business first. They were actually offering odds. How are outsiders going to believe we have a future when we give the impression that Armageddon is around the corner? This is an industry that thrives on self-pity and bad news."

One man who makes a living from bad news is Keith Kelly, whose weekly Media Ink column in the New York Post revels in blood-spattered revelations in magazineland. Is Kelly a doomsday merchant? "Well, if they are doing what they are supposed to be doing, which is selling more magazines, that's not a story," he says. "We have millions of people successfully crossing the road in New York every day. But we only write about them when they get run over."

But could such a regular diet of bad news be hurting the publishing industry? "Okay, it does hurt when it becomes a relentless crescendo of negativity," Kelly says.

If there were a Prophet of Doom award in the publishing industry, the 2008 winner could have been announced already. Step up to the stage, Steve Ballmer, CEO of Microsoft, who made this prediction to the Washington Post in June: "There will be no media consumption left in 10 years that is not delivered over an IP network. There will be no newspapers, no magazines that are delivered in paper form. Everything gets delivered in an electronic form." (The question the Post forgot to ask: "Forget the demise of print, dude. Will Vista actually be working properly in 10 years' time?")

When I called Ballmer's office in Seattle, I was asked to submit an interview request. I figured I could send an e-mail or perhaps activate a secret code in my Windows-compliant smartphone that would whizz a message straight to Microsoft HQ.

"No e-mails. Please send a fax," said his assistant. (How's that paperless universe coming along, Mr. Ballmer?)

It's too easy to make fun of Ballmer's apocalyptic claim (he never responded to my request, by the way), so without further ado: "There are two people who make predictions," Husni says. "God, and fools. And Mr. Ballmer isn't God."

"I would say he's 100 percent wrong," says George Green, president of Hearst Magazines International. "When people have been working at a computer all day long, do you think they then want to continue doing what they have been doing and read a screen until their eyes hurt?"

"It's absurd," says Kelly, laughing (he probably secretly wishes he could have a Post exclusive on that story: "Every Magazine Company in America to Cease Production by 2018").

So exactly how big a threat does the Internet pose to the future of magazines?

"A new form of entertainment called silent movies was going to hurt magazine circulations. Then radio came along, then TV, then cable TV and the Internet," Green says.

"But magazines are like cockroaches. When we're threatened, we evolve into a different form, and that's what we will continue to do." (It's a great quote, but I wish he hadn't said "cockroaches" - it kinda messes with the argument I make later about magazines being beautiful and elegant creatures.)

Kelly says, "The magazine industry is not in as rough shape as newspapers. Classified advertising, which was never really a big deal in magazines, has hurt newspapers in a big way. Magazines are not going to disappear, but they will have to be reconciled to less dynamic ad growth. And yes, there may be fewer magazines around in the future, but that isn't a bad thing."

Kelly doesn't see the Internet vacuuming up the lion's share of advertising revenue any time soon. "If the Internet was such a great driver of revenue, there wouldn't be anything left for the print magazines. I think the value of the Internet is over-hyped." I asked Kelly if he thought Time and Newsweek were going to be around in 20 years, given that most observers believe newsweeklies are most vulnerable. "I think they will be, but they will be a smaller-circulation version of themselves, with a much more lively Web site presence."

Husni is optimistic and has the numbers to back it up: "There were more than 700 magazine launches last year. Okay, that was a drop on two years ago, but it's still four times the number of launches in 1980. Is that a sign of an industry in crisis?"

So does he think Time and Newsweek will hang around? "Yes, but only because they are no longer newsweeklies. They deal in analysis now. I think Time did a great job of reinventing itself last year. I love to read it."

Vanity Fair editor Graydon Carter, a champion of long-form journalism and lavish photography spreads, the likes of which could never be replicated online, nevertheless sees a very digital future. He told The New York Observer that people will soon be taking handhelds onto subways and planes, at the expense of the print form. "You'll subscribe to five magazines and six newspapers," Mr. Carter said.

Some would say that's already happening, though I wonder how many of you have actually seen, or used, Amazon's electronic reader, the Kindle, which launched last November and carries a $359 price tag. Amazon boasts that 145,000 books, newspapers, magazines and blogs are available, but when I checked on Aug. 1, only 16 magazine subscriptions were listed, and, to be polite, let's call that very short list "eclectic" (Ellery Queen's Mystery Magazine and Asimov's Science Fiction were in there, along with Time and Newsweek).

"The Kindle is promising - it's a glimpse of the future - but it's not a replacement," says David Willey, who took over the editorship of Rodale's Runner's World in 2003 and has overseen a circulation rise of more than 23 percent, from 520,000 to 640,000. Willey is also president of the American Society of Magazine Editors and thinks the medium offers many advantages over the Internet and e-books. "A magazine is the best way to have an immersive reading experience. It's a tactile, aesthetic experience. We hear all the time from readers who can't wait to get the latest copy and read it from front to back. They will save it for an hour at the end of the day and go to their favorite reading chair and lose themselves in a product they love. No one can make a convincing case that the Web is capable of this. The typical online experience is that it's a tool, an incredibly useful tool, but it's not an engaging, delightful experience.

"And lastly, there is the portability. You can put it in your bag and take it anywhere. You can get sand on it, spill your coffee on it. It doesn't matter."

Or as Richard Parsons, Time Warner's chairman of the board, says (quoting an unnamed Time Inc. executive), "Magazines will thrive as long as there is no technological alternative for the three B's: the beach, the bedroom and the bathroom."

Someone who ought to know more about the future than most magazine editors is Chris Anderson of Wired. "Obviously, newspapers are going to be changing dramatically over the next few years, but magazines are not newspapers. And I think magazines 10 years from now are going to look something like they do now. In 10 years, I think my magazine will look like it looks today," Anderson told The New York Observer.


So let's assume the magazine industry is not doomed. But let's also assume that Darwinism will ensure there will be victims. Possibly a lot of victims.

Is there still time for those who haven't yet figured out the way ahead? And can we - gasp - learn anything from overseas?

"Absolutely," says Green, who launched Cosmopolitan in Russia in 1994 and continues to oversee nearly 200 Hearst magazines worldwide. "We have a problem here in the U.S., and it's called NIH: Not Invented Here. If we didn't come up with it, we don't want anything to do with it. We don't take advantage of the opportunities we have to learn from overseas. We ask, 'Why should we change?' But we will have to."

So to whom should we be looking? "The most efficient model is in Australia. They create editorial pages and sell advertising space with much fewer people compared with what we have in the U.S. The same applies, to a lesser extent, in western Europe and Asia."

Does that mean major job cuts are necessary in the States to turn our magazines into lean, mean, fighting machines? "I will say that we will change. I don't know exactly how, but we will have to change the way we do business here."

Husni could not agree more. "When it comes to the rest of the world, we have blinders on. I took students to Panorama magazine in Milan. It is a newsweekly with between 200 and 400 pages. The entire staff, including advertising, is 65 people. Newsweek has dropped their editorial staff in half, to 300 people, and they are producing around 60 pages. People in newsrooms want to kill me when they hear me say this. But we have become lazy."

Green and Husni agree that American staffs will have to be trimmed back. So what else can we learn from the Old World? "In Europe, people pay so much more for their magazines," Husni says. "There, they try to find customers who count. Here, we simply count the customers. Bob Sacks [a publishing veteran] says this is the only country in the world were a new magazine will give advertisers a guaranteed rate base even before they have published a single issue."

I came to the U.S. from the UK 10 years ago and was shocked at the price of subscriptions. In my homeland, magazines enjoy healthy newsstand sales. There, as in much of the world, subscriptions do not make up the majority of a magazine's circulation, and they are often four or five times more expensive than they are here.

Don't get Husni started on subscription prices. "When will we learn about this? I want to take a 2-by-4 and hit people over the head with it. On Hearst's Web site, they offer their magazines at a year's subscription of $6.99, with the only exceptions being Cosmopolitan and Oprah. Town and Country magazine, with its upscale, gorgeous layouts, is $6.99 for 12 issues. What does that tell you?"

Over at Time Inc., there are some curious disparities. "People magazine makes as much money from newsstands and subscriptions as it does from advertising," Husni says. "They charge $99 a year. But Time magazine charges $19.95. So if you want to know what's up with Britney or Angelina, you pay $99 a year. If you want to know what the future of the world is, it's $19.95."

Consider The Economist, the British-based newsweekly that has seen its circulation more than double in six years to nearly 700,000, while selling an annual subscription that's typically four times the cost of Time or Newsweek.

The consensus is that the magazine as a medium can remain a viable option well into the future, but that the typical business model is broken. That is, a model that relies, in some cases, almost entirely on advertising revenue - the 50 cents a copy that Condé Nast, Hearst and Time Inc. are charging for many of their publications is barely covering postage.

"We have to stop giving away material for free. We are the only industry that does this," Husni says.

"We are going to have to migrate away from the model that relies on pure advertising," says Willey, whose Runner's World posted its highest-ever newsstand sale for the first six months of 2008 (up 4 percent on 2007), and that was after Rodale jacked up the cover price by a dollar to $5.

Still not convinced that higher subscriptions can form the basis for a successful magazine?

"Look at Highlights for Children," Husni says. "It has a circulation of 2 million, with subscriptions at $30, and they don't accept advertising."

Husni consults with magazine publishers on new launches all over the world and has this advice: "If you start your own magazine, you should build a business plan where you expect zero advertising dollars. And when it comes in, it's gravy. How? By charging for good-quality content that people really want. This is the opposite of what we have been doing."

Husni's suggestion might seem revolutionary to some - to others, simply insane.

But this upside-down version of the traditional magazine business model is already happening, and, in some cases, it's thriving.

Consider Make and Craft, both from O'Reilly Media, which made its name by publishing acclaimed technology guidebooks. These Reader's Digest-size quarterly magazines barely carry any advertising at all and sell for a whopping $14.99 on the newsstand. Subscribers pay $34.95, which is still nearly $9 an issue. And how are sales for these niche titles? Make launched three years ago and has a circulation of 130,000, while Craft launched in 2006 and has a circulation of 80,000. Both are part of what Husni says is the biggest-growing sector in the magazine market: the do-it-yourself category.

Both also offer a lesson in how to combine print and digital. The magazines' Web sites (makezine.com and craftzine.com) are well-conceived and well-executed, greatly expanding on the content carried in the magazine while building a community of fiercely loyal readers.

It's the only way, says Paste magazine publisher Nick Purdy, who offers another feel-good story for the doubters. Purdy, along with two friends, launched the music magazine out of Decatur, Georgia, in 2002 with an initial print run of 10,000. Their rate base is now 180,000, with a projection of 205,000 next year. All this in the most digital demographic of all - the majority of Paste's readers are in their 20s.

I asked Purdy if launching a print magazine had to be done hand-in-hand with a well-conceived Web site. "I would go one step further. I would spend six months to a year [publishing online] before you print. Use that time to gather an audience and develop your voice." That's the model the guys at Paste have in mind for their second launch: "A modern Southern magazine, like a New York for the South."

Paste's subscriptions cost $19.95, unless you were one of the people who took advantage of last year's "Pay What You Want" offer. "We posted an offer on our Web site telling readers that for a limited time, they could pay whatever they wanted for a one-year subscription, with a minimum of $1," Purdy says. "It brought us in 31,000 subscribers. It was a huge success for us."

So what did people pay? "An average of $4.50, but that's a much better return than we would get using direct mail, where it costs you $25 to get a new subscriber. This way, we actually made money on new subscribers."

Not surprisingly, Purdy sees a bright future for magazines. (As for Paste, the plan is to hop over Spin in the next two years for the No. 3 slot in the music category, behind Rolling Stone and Blender.) "I love the print form and believe in it. There's physical interaction you don't get with the Web. One of the holdups for enjoying digital is the physical flexibility. I am looking forward to the technology that brings a nice floppy feel to a digital reader, where the page appears in bright color and I can put it in my bag or my pocket. When that happens, it will be impactful, and I am excited by that.

"But I still don't see the Web as competition for magazines, though it can be if you do it wrong. They are two very different things, and that's what publishers have to realize. As for print, I think that magazines are going to become even more beautiful in the future - I'm thinking of McSweeney's Quarterly as an example. I think we will see more innovations in print."

So the Internet can be a magazine's best friend? Willey agrees with Purdy. "All of us from now on need to think that way. It's become almost impossible to consider yourself only as a print publisher. As successful as Runner's World has been, our Web site has been doubly so. We just had our best month ever and are close to receiving 20 million page views."

Like Make, Craft and Paste, the Runner's World site builds a vibrant community. "It's the place where all these passionate and involved people come and interact," Willey says. "Our print strategy is to have great writing, beautiful photography and service journalism, while online we carry incredibly useful information and daily news. It's a hand-in-glove format. A lot of our readers would sooner give up their Starbucks venti lattes rather than give up Runner's World, and the Web plays a big part in all of this."


At the watercooler, we're talking about fuel-efficient cars, better sources of energy, the rising cost of food and making the world a greener place. And yet, can you imagine a more inefficient and environmentally unfriendly business model than the American magazine? You discount subscriptions by up to 85 percent, then junk two-thirds of the magazines you were trying to sell on newsstands. And you hope to hell that your advertising revenue doesn't go away.

What gives?

"There is a huge paper crisis that is on the horizon," Willey says. "Paper costs are next year going to start increasing by 20 to 30 percent. Postal costs are going to go up, too. Look at the newsstand. A home run on newsstands - and it has happened to us only once in six years - is a 50 percent sell-through. The industry average is 33 percent.

"This is going to become an issue. Readers are going to realize this huge waste is happening, and they are going to demand that we do something about it. The magazine industry needs to get ahead of that and think about the efficiency of distribution in a more sustainable and affordable way. It's a moral and a business issue.

"At Rodale we are thinking about this in a pretty big way and working on getting in front of it, but it requires the guys from Time Inc., Condé Nast and Hearst to get involved."

So let's create the magazine of the future. Tonight's homework is: Create an interactive Web site that augments and aggressively markets your print magazine. Then, decrease your print runs; increase subscription and newsstand prices to offset the loss of advertising revenue; look at making staff cuts; cultivate more realistic and sustainable circulation bases; and find a very clever way of avoiding waste at the newsstand (we're still waiting for the "Eureka!" moment on that one).

Or simply comfort yourself with the words of publishing consultant Rex Hammock, who writes on his site, rexblog.com, "Magazines that people display on coffee tables will exist as long as there are coffee tables."

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