It’s not all gloom and doom for magazine publishers. Despite a number of structural problems still plaguing ink-and-paper businesses, analysts predict the global magazine industry may return to profitability this year. But that will only happen if publishers rebound from a particularly brutal set of year-end statistics from the Alliance for Audited Media, which found retail magazine sales took yet another nosedive in 2014.
“They're about what I thought they'd be -- terrible,” John Harrington, a partner at Harrington Associates, a consultancy serving the industry, said of the numbers, which were published last week in Folio. “Everybody involved in the newsstand [business] for the last six years has been saying, 'Where's the bottom?' Nobody knows.”
Overall, consumer magazine circulation declined more than 2 percent last year, while paid subscriptions, the industry term for subscriptions made by individuals, declined 1.5 percent. But the biggest, deepest cuts came at the newsstands. The number of single-copy issues sold at newsstands and other retailers continued its precipitous slide, falling more than 14 percent in 2014. Though newsstand revenues have been falling for years, this year's decline could be attributed in large part to the bankruptcy of Source Interlink, the country’s largest magazine distributor and the source of about 30 percent of magazines' remaining newsstand business. Its bankruptcy, which occurred in late May last year, hit the entire industry hard, and last week's numbers may not even convey the full impact.
"My understanding is the alliance allowed publishers to make some adjustments," Harrington said. "The accounting was abysmal or nonexistent, particularly for issues that went out June and July." Next year’s newsstand numbers may not have those adjustments, and so could be even worse.
A Handful of Winners
Though the industry's numbers declined overall, a select number of categories did well. Specialty automobile magazines like Car Craft, Sportscar, Street Rodder and Super Street all posted gains, as did titles like Motorhome and Trailer Life, which are focused on mobile homes. “There are always categories that do well sometimes because of what's going on in the economy,” Harrington said. “I think the pickup on some of the automotive titles is a response to that.”
The year's biggest individual winners bore little resemblance to one another. Allrecipes, a magazine built out of the popular website portal of the same name, more than doubled its number of paid and verified subscribers, increasing its totals to more than 877,000 nationwide. AAA Living, a magazine owned by the large automobile association, increased its totals by 43 percent, bringing its total number of paid and verified subscriptions to more than 3.4 million.
Yet those numbers, Harrington said, should be taken with a grain of salt. “A publisher can always get subscriptions," Harrington said. "There are association sales, group sales, all kinds of things that fit under that category."
Several large titles, including Time, Good Housekeeping and Entertainment Weekly, posted tremendous gains in a category called verified subscriptions, which are made not by individuals but by doctors or salon owners, who display the magazines in waiting rooms. Those numbers are easy to game, Harrington said, because they are often offered at steep discounts to the customers -- whether anyone reads them or not.
“The waiting room buyers are basically getting those magazines for free,” he said. “They'll take them even if their customers aren't using them.”
The publishers offer their wares at steep discounts in an effort to maintain an attractive subscriber base. Without those numbers, sales teams will have trouble convincing advertisers they will be able to reach a sufficient number of people.
“The interesting thing would be to find out what they are paying for them,” Harrington said.