• by Paul Gough , March 3, 2004

Advertising and subscription sales seem to be on the upswing at TV Guide, but newsstand sales continue to slide, despite a $20 million facelift unveiled last fall.

The magazine is almost as old as commercial television itself. But it hasn't grown with TV, and has suffered a two-decade decline, particularly on the newsstand. Average weekly sales, for instance, dropped from 1.3 million single copies in the second half of 2000 to 650,000 by the second half of 2003, with some weeks falling significantly below this margin.

"It is of no comfort that TV Guide is not alone in grappling with falling newsstand sales," says John Loughlin, president of the TV Guide Publishing Group. But he adds that few titles have suffered as steep a decline.

Loughlin says that single-copy sales increased following TV Guide's relaunch, but in January resumed their downward trend. TV Guide is taking steps to try to turn around newsstand sales, including a new deal with a Time Warner-owned distribution company that will help market the magazine. It's also working on creating more attractive covers and pretesting cover design and content with a Web-based survey, Loughlin says.

TV Guide will also soon go on sale on the Thursday before the TV listings begin, compared to the current Monday, to take advantage of the biggest shopping days of the week.

The situation is a bit brighter on the ad front and in subscriptions. Ad pages declined about 1 percent year-over-year in 2003, and ad revenue was about flat at TV Guide. Since the relaunch in September, TV Guide has added about 200 new clients, including Dell, Microsoft, Ford, Johnson & Johnson, Visa, and Quaker Oats. Program promotion advertising dipped, with increases from cable networks unable to offset declines by two of the largest networks. Advertising revenue fell $4.9 million in the fourth quarter, and circulation/newsstand revenue dropped $13.2 million.

An intense direct mail campaign and a revamped Web site have been successful in stemming the tide of defections in subscriptions, and TV Guide has also been able to cut the bane of advertisers--sponsored subscriptions that end up in doctor's offices and beauty parlors. Of TV Guide's 9 million rate base, there were 3 million sponsored sales in mid-2003, which had declined to 2.6 million by the end of the year. TV Guide hopes that sponsored subscriptions will fall to 2 million by the end of 2004. Eighty percent are now hotel-related, compared to 40 percent a year ago.

Loughlin also extolls the improved editorial product, and says that further enhancements will be implemented in the second quarter.

"We believe the relaunch activity of the last six months was a necessary first step in the long-term process," Loughlin says.

Chief Executive Jeff Shell underscores how important the magazine was to Gemstar-TV Guide International.

"TV Guide Magazine is a primary driver of our brand," Shell says. "There's no doubt that we need to improve the financial performance of this magazine ... It is also imperative that our magazine is sharply defined and clearly differentiated."

Executives at Gemstar-TV Guide International Inc. updated investors and media analysts during its quarterly and year-end conference call on the latest in what has been a pretty tough couple of years for the Los Angeles-based company, which owns TV Guide Channel and an interactive programming guide business in addition to TV Guide. While Gemstar-TV Guide is doing better than it was even a year ago, Shell didn't mince words: 2003 wasn't a great year. Revenues fell from $244.7 million in the fourth quarter of 2002 to $217 million a year later. Its net loss improved, from $1.3 billion/$3.19 a share in the fourth quarter 2002 to $491.4 million/ $1.20 a share a year later.