If, as many believe, the future of magazine publishing is niche, then it makes sense to look to niche publishers for clues to revenue models, products and strategies that will carry the industry forward. As experts on the passions and preferences of audiences, no sector of this business may be better equipped to lead the way forward than those in the enthusiast camp.
"We are in the market niche that everybody says you want to be in, which is specialty markets," says Kevin Keefe, editorial vice president and publisher at Waukesha, WI-based Kalmbach Publishing. "We've been very successful and lucky over the years to have markets where it is easy to establish and identify what the core group's passion is."
None of which is to say enthusiast publishers don't work very hard to earn and keep their readers. When Kalmbach moved all editorial operations of Discover magazine (which it bought from Discover Media LLC in 2010) from New York to suburban Milwaukee, the company took pains to highlight the scientific and journalistic expertise of the carefully-picked staff. More than any other consumer publishing sector, enthusiast audiences know their subject, and demand quality.
They can also be famously loyal, renewing at above-average rates and providing circulation revenue support at percentages Conde Nast would envy. At Kalmbach, two-thirds of revenue comes from subscriptions and newsstand sales, Keefe says.
"One of the many reasons we were attracted to Discover was because … it has a higher-than-average subscription base," he says. "There are a lot of people who have been subscribing for a long time and they renew at an above-average rate. And that is the model for this company, as opposed to an ad-driven model."
Capturing a devoted audience naturally makes a publisher more recession proof; many enthusiast publishers weathered the dark days of 2009-2010 better than their industry peers. It also brings a special responsibility.
"A lot of areas we are in are just tailor-made for being able to maintain that subscription relationship for many years," Keefe says. "As long as you deliver the goods, of course. We have to produce really great magazines to make it work."
"The enthusiasts we serve have a passion for what they do, as it defines who they are," agrees Sara Domville, president of Cincinnati, Ohio-based F+W Media. "We provide the authoritative content to help inspire and instruct these passionate enthusiasts."
So, beyond a focus on quality, what's their secret sauce?
El Segundo, Calif.-based Active Interest Media has always relied more heavily on advertisers looking to target its affluent audiences for magazines like Yoga Journal, Dressage Today, Old House Journal and Power and Motoryacht. In 2012, the publisher saw 40 percent of revenue coming from print and digital advertising, and just under 20 percent from subscriptions and newsstand sales. The second-largest chunk of earnings—33 percent—came from events, according to Efrem "Skip" Zimbalist III, chairman and CEO.
Zimbalist says events are a natural area of growth in the enthusiast and hobbiest sector, an essential part of a path to purchase that creates touchpoint opportunities for all of AIM's products.
"There is a cycle that enthusiasts have in enjoying their sport, their hobby—part of it is vicariously enjoying the sport when they can't be doing it," he says. "They do that through the pages of a magazine, whether digital or print, and that is an ongoing 12-months-a-year process. They also become familiar with things they can spend money on for the hobby [in the magazine]. If they are ready to make a transaction, or if they want more detailed information, then they go on the Web and do searches for product or knowledge based on their own queries. If it is a particularly complex or expensive product or subject matter, that's where events come in."
Events associated with trusted brands are a powerful draw for audiences and sponsors, Zimbalist says, both for the ability to sample products (such as at AIM's Fort Lauderdale International Boat Show) and network with like-minded enthusiasts. Many advertisers in the magazines are also Web and event sponsors. "It's a way for them to connect with the consumer 360 degrees," he notes.
Publishers have an advantage in producing events, not only because of the cross-platform advertising opportunities but also in promotion and market research. "You know geographically from your own data where to place the events and when, and how to slice and dice them in terms of demographics or [whether it] is an event for experts or beginners."
"It also gives you a lot of credibility with advertisers," he continues. "There is always a question mark in their minds [with print]: Who sees the ad? When they see 100,000 people show up at an event—end of argument."
A good example is AIM's Yoga Journal-branded events. Each year in San Francisco, for instance, 2500 yoga practitioners get together for five days; there are tracks for instructors, business owners, experts, beginners, pregnant women and the elderly. Attendees can dive into their niche while making new friends and doing business in a "very conducive atmosphere," Zimbalist says.
Over at F+W Media, events are also increasingly important in the product mix.
"Events is a healthy, growing business and we see it as the ultimate way to deepen a relationship with the consumer, which is core to our mission," Domville says. "… We are continually launching new events, like the inaugural Healthy Beverage Expo, an outgrowth of our World Tea Media division."
HOW Design Live, a show for Web and graphic designers, is one of F+W's largest events, growing from a single day 20 years ago to a full week of programming (this year at Moscone West in San Francisco) with multiple tracks aimed at designers of all levels. "Today it's the premiere event in the space," Domville says.
Kalmbach has seen huge success with its yearly Bead and Button Show in Milwaukee and regards it as a template for possible future projects. "We love that event and we like the implications it has for other things in the future," Keefe says.
Not surprisingly, enthusiast publishers have jumped into social media as a way to further galvanize and inspire special interest crowds. A Facebook campaign by Active Interest Media spoofing the Sports Illustrated swimsuit issue asked Yoga Journal followers to post poses for a mock "model search," and get friends to vote for them. "We blew out the servers," Zimbalist says. The second year, the event was sold to a sponsor for six figures.
Yoga Journal also promotes a 21-day yoga challenge on Facebook and its website—also sponsored.
F+W Media interacts with millions daily on social media, Domville says, with content from experts in various fields. "We test new audience development initatives on an ongoing basis through social media, from free ebook downloads to exclusive offers, promotions, contests, sales and more. Social media is just one part of our larger, shared responsibilty across the company to grow our audience via all channels, on- and offline. For F+W, social media is an entry to the company, not a passive follower/fan relationship."
For Kalmbach, growth in digital has not changed the fact that most of their money comes from selling print magazines like Trains and Model Railroader.
"Our magazines dominate the various fields they are in and no one has come along with an exclusively digital product that has been much of a competitive threat," Keefe says. "I still believe people in these markets want print magazines or, increasingly, the next closest relative of a print magazine, which is a rich digital [replica]."
Zimbalist believes the two types of magazines most likely to survive in print are long-form, text-heavy magazines like The New Yorker and those with rich photography. "In terms of enthusiast magazines there are advantages to digital—you can have a lot of enhancements in video, audio; you can personalize it—but a lot of people prefer print, and I think it is going to evolve slowly and generationally."
The pressure is not from advertisers, Zimbalist adds, who are fairly platform neutral. Choice of platform instead has more to do with the size of the advertiser and their budget. "The smaller advertisers look to us to help them navigate the digital universe," he says. "They love digital publishing, they just don't know how to do it. … I think they are as excited about it as anyone else."
Active Interest Media has pursued innovative revenue opportunities arising from its niche relationships, such as USRider, a sort of AAA for horse trailers providing towing and horse stabling in the event of a breakdown on the road. "We know horse users well, and this is basically a subscription service we are selling much like we would a subscription to a magazine. We are using our lists and our consumer marketing talents to run this business and it is growing rapidly and doing well," Zimbalist says.
AIM also works with a partner to sell liability insurance to yoga studios as well as running a service for boat owners called Vessel Vanguard, which distills complex boat operations manuals into a digital platform that keeps records and sends out periodic reminders of when maintenance is due.
E-commerce is increasingly important to F+W. A division that began in 2008 with one online store has grown to 30 niche sites such as WritersDigestShop.Com and MyDesignShop.Com, selling their own products and those of third-party vendors, Domville says.
Active Interest Media has a growing business selling books, videos, subscriptions and event tickets online, though Zimbalist says selling third-party merchandise is "not the future of AIM."
"I think selling merchandise is best left to merchandisers," he says.
Online, Kalmbach thinks more in terms of tiered access and rich offerings to paid subscribers, such as exclusive projects and designs for jewelry makers and model train enthusiasts or subscription-only industry news feeds.
An Evolving Market
Challenges for AIM include managing the reduction of newsstand sales as a source of circulation, as well as the shift of the "whole ecosystem" of print distribution—direct mail, fulfillment, marketing, etc.—to digital channels. "How do you go out there and reach consumers and get them into the [app] store and get them to subscribe and renew? You need a whole new skill set that all of us are developing."
A big challenge for any enthusiast publisher is the volume of distractions people have today, Keefe points out. "We are not immune to the alternatives the Internet has given people," he says. "The trick is for us to help readers understand that the curated, edited, vetted material we publish is more reliable and more rewarding than looking up on the Internet how to build a model railroad layout."
Kalmbach has big plans for Discover, having launched a website redesign in November 2012 and preparing for a major print redesign this fall. "We're not planning any major changes in the DNA of the magazine," he says. "We bought what we consider to be a very successful magazine … it's done a wonderful job for a long time of serving a broad audience of people with an interest in science."
F+W recently acquired Interweave, a publisher of craft books and magazines. In addition to new magazine and event brands, the purchase adds a line of online craft education and streaming video to the company's stable of craft-related products, as well as community marketing and digital magazine expertise, Domville says. "There was surprisingly little crossover between the business as [there are] some very distinctive strengths on both sides." PE