Rodale Makes Strides, Time Inc. Slides in 2Q

Mens Health August 2008 coverRodale, the publisher of Men's Health, Best Life and Prevention, continued to stand out as a consumer magazine success story in the second quarter of 2008--posting an overall revenue increase of 7.6%, compared to the same period last year. The growth is especially remarkable in light of substantial revenue declines at other publishers, like Time Inc., which also released figures Wednesday as part of Time Warner's overall second-quarter earnings announcement.

The 7.6% increase in total revenues was driven by an 8.3% increase in print advertising revenue, and a 27.1% increase in online revenue. The increase in print ad revenue compares favorably with a 4.9% decline for the magazine business in general. Rodale said total ad pages were basically flat, with a 0.5% increase, as the industry overall saw ad pages fall 8.4%.



Rodale President and CEO Steven Murphy credited the success to a three-pronged strategy, formulated two years ago, that emphasizes integrated marketing solutions, e-commerce and international sales. Murphy said integrated deals increased 76%, and Web sales of books, DVDs, and mag subscriptions rose 39%.

A privately held company, Rodale does not release dollar figures for total revenues or specific categories. However, last year the company was reported to take in about $625 million in revenues, or about $156 million per quarter. (Actual revenues are likely subject to seasonal variation.) The 7.6% increase follows a 5.1% increase in the first quarter of 2008; if the company maintained a roughly 6% growth rate in 2008, total revenues would be about $660 million by year's end.

Runner's World, one of the flagship titles, saw ad revenues increase 18.1% as ad pages jumped 10.5%. Women's Health, a relatively new brand, continued its strong growth with a 40.4% increase in revenues, driven by a 23.7% increase in ad pages. Revenues for the magazine's Web site increased 100.7%. Revenues for Best Life, another relatively new title, were up 38.9%, as ad pages rose 22.5% and Web revenue climbed 91.2%.

It's not all good news. Some of the company's flagship titles are suffering declines in print advertising comparable to the rest of the business. Men's Health saw ad pages fall 13% as rate-card revenues sank 7.8%, according to the Publishers Information Bureau-- drops that should have alarm bells ringing in the corporate office. However, these losses were offset by a 42.4% increase in ad revenues for the magazine's Web site. Prevention saw ad pages slide 11.4%, and rate-card revenues 6.8%. Ad revenue declines at both brands were also offset by strong book sales; Rodale Books, a separate division, enjoyed 19% growth in revenues on the strength of new diet and exercise books.

For comparison, Time Inc. said total sales decreased 6% during the second quarter to $1.18 billion, in large part because of a 9% decrease in ad revenues. According to the PIB, ad pages at flagship newsweekly Time fell 23.7% in the second quarter, while People fell 8.9%. Entertainment Weekly was down 13.1%, InStyle 10.4%, and Sports Illustrated 11.5%. Fortune and Money were basically flat, with modest increases of 2.7% and 0.3%, respectively.

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