Subscription Phobia: How Will it Affect the Future of Magazines?

By Andrew Gordon

March 1st 2010

The print publishing industry, like the music industry, is struggling to find new ways to make money.

Currently, magazines are focusing on three main revenue streams: advertising, newsstand sales and

subscription. Given the number of magazines that folded in 2009 (notably Gourmet, a popular food and

drink magazine, and Country Home, a magazine that had over a million circulated copies), it is not a

stretch to say that the standard avenues of income for magazines are dwindling. As a solution, many

magazines have been focusing on drawing readers and advertisers through smartphone and tablet

applications. The problem with this is that it merely extends the problems that magazines already have

(acquiring subscribers and advertisers and making sales) into different mediums. Instead, magazine

publishers should broaden their horizons and look into new, less related ways of increasing profit

margins.

Five years from now, successful magazines will be defined not only by how many readers are

aware of their brand but by the size of the brand. Successful web-based businesses, such as Google and

webcomics like Penny Arcade and XKCD, survive because they became more than what they started out

as. Google started as a search engine and now provides e-mail, maps, calendars, the unique Google

Street View and much more. Penny Arcade began as solely a webcomic, and now runs a video-game

convention, a charity for children, an online store and even a scholarship program. Magazine publishers

view expansion in the digital age more narrowly than these successful web brands. Cathie Black, the

president of Hearst, sees “360-degree experience” as “offering liquid content by using print, web,

mobile and television to get the brand to the audience.”

Instead of focusing solely on making the public aware of the brand, magazines should leverage

the brand recognition that they already have to sell products, even if they aren’t directly related to

magazine publishing. Penny Arcade has successfully done this; they began by building up a following for

their main product (the comic), but instead of selling only prints of the comics and collections in book

form they chose to expand and now they sell a Penny Arcade card game, t-shirts, video games. These

are all products that appeal to the Penny Arcade’s audience (mainly young men). Any magazine can

follow this example by knowing their audience and creating and selling products for them. For example,

Vogue could create a fashion line and use the brand recognition they have in the fashion world to sell it.

Developing these alternate revenue streams is especially important now as subscription and

circulation decline. The Globe and Mail reported that “In the first six months of 2009, of the nearly 600

consumer magazines in U.S. and Canada to report such figures, 67 per cent saw their paid circulation

drop from the same period last year.” Part of the reason for this decline is that “the market is so much

more fragmented.” The internet provides many options for potential subscribers, and as a result

choosing one magazine to subscribe is a heavy commitment. By paying to subscribe to, say, Canadian

Living, and will likely not also subscribe to Chatelaine. What is the benefit of subscribing when readers

have so many options to choose from online? As more and more content publishers appear online,

choosing to commit to one hinders rather than helps.

A successful magazine will not be one that does simply force its current business model onto

new technology but one that is able to adapt. It’s not enough to use the web to create a fancy gimmick

like “the December issue of Esquire which features Robert Downey Jr. perched on top of a augmented

reality box” (Maloney, 2009). Consider Erick Schonfeld’s response to the Sports Illustrated iPad

application on his blog, Tech Crunch: “If I still read magazines, I’d much rather consume them in this

form than on paper” (Schonfeld, 2009). Presenting the same content in new ways will not revolutionize

the business model and miraculously create profits, just as the advent of the internet did not. In order to

succeed, magazine publishers need to recognize that what they need are new revenue streams, not

different ways to promote old ones.