Commentary
'Fortune' To Add Paywall, Raise Print Cover Price
- by May 30, 2019
Six months ago, Meredith Corp. sold the magazine to Thai businessman Chatchaval Jiaravanon, a member of Thailand’s richest family, for $150 million. Jiaravanon rarely talks to the press and appears willing to let Fortune’s existing management develop a strategy for sales, marketing and circulation.
The latest moves are aimed at reducing a reliance on print advertising, which has declined as audiences and ad dollars shift to digital media, The Wall Street Journal reported. Fortune’s ad pages fell 54% to 630 last year from 1,364 in 2014, according to the Publishers Information Bureau.
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Alan Murray, the former Chief Content Officer of Time Inc. who is president-CEO of Fortune, said consumer revenue is “the only way for serious journalism to survive in the current environment.”
He declined to discuss how much the magazine plans to raise its cover price from the current $6.99. Fortune will relaunch the publication next year and print it on better-quality paper.
When Henry Luce, cofounder of Time Inc., founded Fortune in 1930, the magazine had a cover price of $1 -- the equivalent of about $15 in today’s prices. Luce priced Fortune as a premium product that wealthy and influential people would see as a status symbol.
Newsstand sales averaged 8,206 copies an issue last year, about half their 2015 levels, according to the Alliance for Audited Media.
The digital paywall will come into effect later this year, after Fortune takes full control of its digital properties from Meredith in July.
Fortune will join the ranks of publishers that have added paywalls to their websites to boost revenue. Publisher Condé Nast plans put all its titles behind paywalls this year, following similar moves by Business Insider and New York.
Fortune’s audience of C-suite executives likely will be willing to pay for the paywall and treat it as a business expense. Its average monthly audience of 20 million readers probably will shrink. But readers who are committed to paying for the content are a more desirable audience, anyway.
The company also plans to expand its conference business by adding three events to this year’s calendar. This year, it's estimated to generate between $40 million and $43 million in revenue. Seven of its 20 conferences are outside the United States, including two in China.
The conference business makes up about 40% of its yearly revenue, while digital advertising accounts for 20%. Prints ads and circulation contribute the rest.
In early September, Fortune will exit Meredith’s New York office at 225 Liberty St. and move to 40 Fulton St. in lower Manhattan.
Rob, the problems facing magazines are not a function of losing their readers to digital media. The core problem is the loss in advertising support. For broader based publications---womens' service, home service, fashion, sports, news, etc. books---- non-endemic advertisers have cut back on print mainly to fund rising TV CPMs. Other, more selective, publications, such as "Fortune", have also suffered such losses but, worse, lost endemic ads as well---in the latter case, often to digital media. The obvious solution for those publishers still in the ball game----if it's not too late---is to focus much more on digital content, subscribers and ad sales---in particular, video ads----while integrating what remains of their print activities with digital. Hearst now seems to be going strongly in this direction and I wish them success. In my opinion, a similar move made ten years ago might have saved Time Inc.
Ed, it's easy to say this should have happened 10 years ago. Were you saying the same thing then? A national magazine with limited circ has no chance in todays world, only a billionaire looking to lose money would buy a title like Fortune.
Actually, Jay, I used to write a column for MIN about once a month and for some time in the early 2000s I was warning the magazine industry about not wasting its time with ROI studies that showed print topping TV by an unbelievable ten -to-one margin and protecting what ad revenues magazines were still getting. I also suggested ways that magazines could go in convincing advertisers of their merits as a medium---instead of badmouthing eachother and rate slashing to try to win a page or two from a rival. Needless to say this kind of advice didn't sit well so I and MIN parted ways. More recently, I have advocated the creation of digital networks by magazines---Time Inc was my first choice for such a move----which would create special content for the publications' websites and sell TV-fixated advertisers video ads--not banners---on a network basis, just like CBS, ABC, etc.---except with a far better audience, demographically, and, hopefully, less ad clutter. So, yes, I've been saying this kind of thing for some time---I didn't just start today---as you seem to be suggesting.
Ed,
Thanks for the comment!
Rob
All the more reason to get your news at nofeenews.com