People and Time Reduce Rate Bases

magazines

Time_magazine_logoPeople and Time are trimming their rate bases. According to Ad Age, People will reduce its circulation guarentee by 50,000 copies per issue and Time will cut its guarantee by 250,000 copies per issue. Beginning in January, People’s new rate base will be 3.4 million; Time’s 3.4  million.

The change is odd, as typically, the higher a magazine’s rate base the more it can charge advertisers for ads. A Time spokesperson told Ad Age that the magazine cut its circulation guarantee out of a “desire to optimize… marketing spend and cut less profitable circulation.”

In other words, this might have something to do with MediaVest — a huge media buying agency — who announced it will no longer count tablet subscriptions when considering magazines’ rate bases. By doing so, magazines might not be able to charge as much for ads.

The Time spokesperson, of course, denied MediaVest’s move had anything to do with it. “It felt like it was time to make a cut” said the person.