Magazines’ Subscription Solution

Since launching in the U.S. four years ago, British import OK! has been determined to grow its newsstand sales, slashing its cover price and spending lavishly for celebrity exclusives.
Now, with the realities of the economy and rivals coming to bear, OK! is changing course.

Rather than cut its weekly circ guarantee to advertisers, OK! will reduce its newsstand, dropping it from almost half its circulation to about one-third. Leaning more on subscriptions, publisher Lori Burgess said, “just alleviates that intense pressure.”

While newsstand sales have long been a sign of health, particularly for celebrity weeklies, those days are waning, as titles have offset weak newsstand sales with subscriptions. Ten years ago, consumer magazines got 18 percent of their circ from newsstand. Today, that figure is less than 13 percent, as single-copy volume has declined about 29 percent.

For titles that derive a large volume of their sales from the newsstand, single-copy sales remain important. “Newsstand is definitely a barometer of wantedness,” said Paul Caine, president, group publisher, Time Inc. Style and Entertainment Group, whose People magazine is the No. 2 magazine on the newsstand behind Cosmopolitan, with more than 1.3 million in average weekly sales.

“These are valuable shoppers,” said Ian Scott, president of Bauer Media Group, whose titles In Touch and Life & Style are almost entirely newsstand-based. “Newsstand buyers choose the magazine, pay full price and engage in the advertising.”

Yet buyers aren’t so sure anymore. They said it matters less to them today if a magazine gets its circulation from the newsstand as opposed to subscriptions. “We always made the case [that] the newsstand buyer traditionally pays more,” said Roberta Garfinkle, svp, director of print strategy, TargetCast. “But I’m not sure how relevant that is now.”

Robin Steinberg, svp, director of print investment and activation, MediaVest, said newsstand has long been a yardstick of a magazine’s vitality.

However, as consumers make fewer trips to the newsstand under economic pressures, annual subscriptions are offered at extreme discounts and content is available free online, that practice seems to have lost validity. Besides, data (Affinity) have shown no significant difference in how single-copy buyers and subscribers respond to ads, Steinberg said.

Us Weekly is another title that has hiked its reliance on subscriptions to make its rate base promise. Its 1.9 million-circ is more than 57 percent subscriptions, up almost 10 percentage points over the past two years. Vicci Lasdon Rose, publisher of Us, said that while “advertisers are attracted to magazines with strong single-copy sales,” Us’ 1 million-plus subscribers, paying more than $1 a copy, also are a quality audience.

While it’s true subscriptions provide a steadier stream of revenue than do single-copy sales, at a lower per-issue price, they’re less profitable if at all.

That was a problem Star faced when it opted to reduce its rate base in 2009 and again in 2010, by 15 percent to 925,000, rather than replace newsstand with money-losing subs, said David Leckey, evp, consumer marketing for Star’s parent American Media Inc.

“We just don’t have the benefit of the advertising dollars being able to support subscriptions’ lost profitability,” he said. Circulation, he said, “has to contribute.”

Related: Mags See Newsstand Woes Waning