Meredith Cuts 'LHJ,' 'Trad Home' Rate Base

Traditional Home

One of the nation's largest women's magazines is about to get a little smaller, with Meredith Corp.'s decision to cut the guaranteed circulation of Ladies' Home Journal 16% from 3.8 million to 3.2 million. Plus, one of its big shelter titles, Traditional Home, is slimming its rate base by just over 10% from 950,000 to 850,000.

Meredith may also raise the price for newsstand copies and subscriptions for both titles. Meredith last cut LHJ's rate base in January 2007.

The news comes as Meredith seeks to regain a firm financial footing following big losses during the recession. Aggressive cost-control measures and a tentative rebound in magazine ad spending have helped reverse a long decline.

In the quarter ending in March, Meredith's total revenues increased 5% to $353 million. This included a 2% increase in revenues at the National Media Group, consisting of Meredith's magazine properties, to $285 million. The increase was due in part to a 4% increase in ad revenues, to $137 million. Circulation revenues increased 2% to $75 million.



Meredith said the potential increase in newsstand and subscription prices comes in response to increasing costs for paper, printing and distribution. Ppaper prices have increased 10% over the last year, according to the 2009 annual report. Circulation revenues currently provide 25% of the publishing division's revenues and 20% of the company's revenues overall.

If Meredith does decide to increase circulation revenues through newsstand price hikes, it certainly won't be alone.

Many of magazines' print cousins in the newspaper business have been raising newsstand and subscription prices for several years to offset steep losses in ad revenues. The last couple of years have seen newsstand price hikes at a number of big papers, including The New York Times, The Wall Street Journal and the Chicago Tribune, among others.

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