American Media Inc. is whacking the circulation it guarantees to advertisers at three of its titles to keep costs in line with declining ad revenue.
Star is cutting its rate base by 12 percent to 1.1 million with the April 6 issue following a 7 percent cut to 1.25 million in June 2008. At the same time, the weekly is raising its subscription price 20 percent, publisher David Jackson said. “There’s been a move to make the title a little more profitable,” said Jackson. “Seeing the newsstand volatility, we wanted to give more of a cushion.” Star’s circ fell 10.3 percent in second half ’08 on a 13.4 percent decline in single-copy sales, per the Audit Bureau of Circulations.
Meanwhile, AMI’s Men’s Fitness will cut its rate base by 14 percent to 600,000 effective with August, and Natural Health will go down by 14 percent to 300,000 with its July/August issue.
The three titles plan to achieve the reductions by chucking free, public-place copies and/or agent-sourced subscriptions, which deliver a significant portion of revenue to the agent but offer little benefit to the magazine. “We’re trying to make the magazine more profitable, and those are not profitable,” said Eileen Chiafair, Natural Health’s publisher.
More titles are cutting rate base as they battle shortfalls in advertising as well as newsstand sales, which declined an estimated 12 percent in first quarter ’09. Under the ad-reliant magazine model in place at most magazines, circulation has served to attract advertising.
But as that revenue shrinks—magazine ad pages fell 25.9 percent in the first quarter of this year, per Publishers Information Bureau—publishers are examining the cost of maintaining their current rate bases.
Earlier this year, Rodale’s Prevention said it would cut its rate base 15 percent to 2.8 million with its July issue, mainly by cutting public-place copies. Newsweek plans to reduce its rate base to 1.9 million in July from 2.6 million and again to 1.5 million in January 2010.