How Inflated Are PIB Revenue Figures? A Lot

Time magazineIt's an open secret that big magazine publishers offer advertisers discounts on the prices listed on official advertising rate cards, especially when times are tough. As a result, media types tend to use the Publishers Information Bureau's figures for ad pages as an index for magazine health, rather than rate card revenue figures, which may be inflated.

So a periodic reality check can put the PIB revenue figures in perspective. Just how big are discounts on magazine rate cards nowadays? The short answer is: a lot. The long answer is: anywhere from 40% to 75%, depending on the publisher.

It's also important to note that only a few publicly traded companies release actual revenue figures that allow comparisons as part of SEC filings and earnings announcements. Two of the largest publishers--Conde Nast and Hearst--are privately owned, so figures for discounts at either company would be based on hearsay. Publicly traded companies will have to serve as proxies for the magazine business overall.



Three of the biggest publicly trade magazine publishers are Time Inc., a division of Time Warner, publisher of Time, Meredith Corp., publisher of well-known women's interest titles, and Martha Stewart Living Omnimedia, purveyor of shelter mags espousing domestic wisdom.

Comparing the PIB ad revenue figures for the first six months of 2008 to their actual ad revenues, as disclosed in financial statements, reveals evidence of substantial discounts.

Time Warner reported total publishing advertising revenues of about $1.2 billion in the first half of 2008--of which 9% or $100 million was online advertising, leaving print ad revenues of $1.1 billion. That compares with PIB's rate card revenue figure of $2.14 billion, meaning that Time Inc.'s two dozen American magazines are collectively offering discounts of almost 50% off the official rates.

At Meredith, the discounts are even steeper. The company reported publishing ad revenues of $308 million in the first half of 2008, compared to PIB rate card revenues of $1.16 billion. This suggests that its 25 consumer magazines are collectively offering discounts of almost 75% off the official rates.

Martha Stewart Living is offering smaller discounts than Time Inc. or Meredith, but they are still in the double digits. In the first six months of 2008, MSLO reported print advertising revenues of $85 million, compared to PIB's figure of $142.4 million. That means MSLO's five main titles are collectively offering discounts of about 40% off the official rates.


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