Modest Mag Industry Recovery Seen After Short-Term Pain

The U.S. consumer magazine industry will recover modestly by 2013, but only after falling sharply in the near-term, tamped down by the economic downturn and continued shift of readers and advertisers from print to digital, projects a new five-year forecast. Between 2008 and 2010, print advertising will plummet 22.8 percent to $9.8 billion before rising 14.3 percent to $11.2 billion by 2013, according to PricewaterhouseCoopers’ Global Entertainment and Media Outlook: 2009-2013.The weakened economy also will continue to take its toll on circulation as consumers forgo magazines and more titles shut down. The forecast calls for circulation spending to decline a sharp 8.3 percent in 2009 as shoppers buy fewer copies at the newsstand and cut back on subscriptions to save money.By 2013, the improved economy will boost newsstand and subscription sales. But for the five-year period, circulation spending will decline to $8.4 billion in 2013 from $9.7 billion in 2008, a 2.8 percent decrease compounded annually, per the forecast.“Magazines are very much a discretionary purchase,” said Timothy Corrigan, a partner in PricewaterhouseCoopers’ Entertainment, Media & Communications practice. As such, he said, a pickup in subscription sales will take time because it will lag the economic recovery.As for digital advertising, the next five years will sound a lot like the past five. Digital advertising will grow rapidly, but not enough to make up for declines in print advertising. As magazines expand their Web site traffic, add features like video and launch mobile sites, their overall digital ad revenue will increase at a compound annual rate of 15.1 percent to $1.8 billion in 2013. At that point, digital advertising will equal 13.8 percent of total advertising in 2013, up from 6.5 percent in 2008.While the forecast doesn’t address individual magazine companies, it does single out Time Inc. as the industry leader in digital, saying the company generated $200 million in Web advertising across its magazine sites in 2008, slightly more than 20 percent of its total ad revenue.“Publishers are being very creative online,” Corrigan said. “We’re seeing mobile access increase as well. But we’re not expecting that to generate the same amount of dollars that will be sufficient to offset what they’re losing in print.”

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Modest Mag Industry Recovery Seen After Short-Term Pain

Lucia Moses

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Lucia Moses