Many U.S. magazines are barely keeping their heads above water. And with further advertising declines, more paper price increases, a newsstand system that’s circling the drain and the prospect of huge postal increases, it’s likely to get uglier in Magazine Land.
You need to ask a fundamental question — and re-ask it every time the landscape shifts significantly: Would you be more profitable without the magazine than with it?
A financial statement showing that the title is losing money doesn’t tell the full story.
Here are some tips for assessing the health of your magazine.
Is Your Magazine Carrying Extra Weight?
Are all of your costs properly allocated among magazine, web, and other ventures? And would all of those “magazine” costs actually disappear just because the magazine disappears? If someone writes magazine articles that also appear on your website, how are the costs allocated? And how will the website afford such articles if there’s no longer a magazine to help pick up the tab?
On the other hand, you may be devoting significant space on your website and in your newsletters to selling magazine subscriptions. What’s the opportunity cost of not devoting that space to paid ads?
Will Your Brand Suffer Without A Print Magazine?
Would your website suffer — in credibility, search, or in ad rates — if it’s no longer associated with a publication? How about your events and webinars? After all, digital-only publishing ventures don’t look so hot now that the venture-capital opportunists are less willing to prop them up. And I’ve lost count of the digital-native publishers that are now publishing magazines, largely with the intent of strengthening their brand images.
Can It Be Fixed?
If your magazine is on the ropes, you’ve probably already tried many of the usual tweaks — editorial redesign, revised advertising strategy, cheaper paper, fewer pages, trimming staff.
But to paraphrase Samuel Johnson, heading toward the gallows “concentrates the mind wonderfully.” When you face up to the fact that your magazine may cease publication, you become open to more radical changes that were previously off the table — changes that might actually save the magazine.
Consider doing “major surgery” on your magazine, such as implementing frequency changes and reduced circulation, which can put struggling magazines on a more sustainable path.
What Are the Costs of Shutting Down?
There’s another problem with shuttering a magazine: You may not be able to afford it.
For many consumer magazines, “managing cash flow” has meant sending renewal notices to people who have two years remaining on a three-year subscription. Some subscription agents have also thrived on a knack for selling renewal on top of renewal, leading to stories about 80-year-old people who have 40 years remaining on their subscriptions.
Short of bankruptcy, you can’t just shut down the magazine and walk away from those subscriptions. You are legally obligated either to refund the subscribers or to provide them something of similar value. The usual exit strategy has been to merge an unprofitable title into a profitable one or to sell off the subscription list to a competitor.
But in the current declining magazine market, selling — or even giving away — a subscription list and its associated liabilities may not be possible.
Creating more double issues will slash your postage and some printing costs immediately without slowing the rate at which your subscription liability is burned off. (Trust me, despite what you may have read elsewhere about frequency reductions, in my experience their goal is always to reduce costs, not to increase newsstand sales.)
You can reduce both your expenses and your subscription liability by eliminating any circulation promotions that aren’t profitable in the short run. That will probably mean eliminating most new-subscription efforts, raising some subscribers’ renewal rates, and slashing your newsstand promotions.
All this, of course, will cause your circulation to decline, but it will also make shutting down the magazine more feasible. And, who knows, you might find that after some slimming down you once again have a viable magazine on your hands.