Mr. Magazine’s M.O. : 3 Lessons Magazines Can Learn from Cable TelevisionJuly 2011 By Samir “Mr. Magazine” Husni, Ph.D.
Change is the only constant in our magazine business; however, most apply that change to content and design rather than their business model for a changing magazine industry.
Since its birth, the American consumer magazine has followed a variation of one business model: circulation revenue from single-copy sales and subscriptions, and later advertising. In the early days, circulation was the major source of revenue; later, advertising became the major source, reaching a whopping 80 percent of the total revenue. When the economy collapsed in September 2008, the advertising market dried up, leaving the magazine industry facing a major crisis.
Add to that technological advances, expansion of digital media and the creation of tablets, and it's clear that signs of the demise of the magazine industry's business model were written all the over the wall. All of a sudden, industry leaders started talking about the need to reinvent the business model and to become more "consumer-centric" rather than "advertising-centric." With the economy rebounding and digital solutions explored, the talks about the new business model have dried up, and we are back to our old ways.
1: Content and 2: Price
For years I have felt that cable television has been the best thing to ever happen to the magazine industry, and that we can learn and apply a lot from both its content and its business models in our own business. From its very beginnings, cable television has followed a consumer-centric model, regardless of how much advertising was later added to its programming. Consumers had to pay a price (and a high price, for that matter) for the premium channels they wanted to receive. That price came on the heels of free television when all consumers had to do was pay for the television set. Today, the average family pays almost $70 a month for cable services—compare that to free television just 30 years ago.
Having more choices means less time spent on different channels, but it also means paying much higher prices for those channels. The more specialized the channel, the more specific the amount of time spent with it and the higher the price paid for it. Whether it is the Playboy Channel or HBO, people are willing to pay more for it.
The same should be the case with magazines. Having 10,000 titles available for the general public today, compared to 3,000 only 30 years back, does not translate to selling more magazines. In fact, the opposite is true. More means less. However, for example, when an almost ad-free magazine caters to the needs of a specialized, literary-minded audience who are interested in food as a culture, Lucky Peach magazine is born with a single-issue price ($10, in this case) that is equal to almost a two-year subscription to a host of general-interest magazines.