Not Yet At the Bottom
An analysis of first-half 2009 circulation levels of audited consumer magazines reveals that the end of the circ decline is nowhere in sight.
By Baird Davis
Monday, January 4, 2010
In the first half of 2009, paid and verified circulation of audited consumer magazines (this excludes titles whose circulation is derived primarily from “association” circ sources, e.g., AARP The Magazine) fell an unprecedented 6.3 percent from 273.8 million to 256.5 million. This is believed to be the steepest circulation level decline in more than 40 years. And there are no signs that consumer magazine circulation levels have bottomed out.
To the contrary, there are strong indications that the deep circulation level hole the industry dug for itself, as it eagerly embraced the advertising-driven circ model philosophy, still has more subscription circ to discharge before it arrives at a more optimal circulation level.
However, the steep circ declines reported in the first half of 2009 appear to be a kind of industry cathartic turning point—a moment in time when publishers finally seemed to realize the seriousness of the “over-circulated” condition they have built for themselves.
In this article we’ll review some of the causal reasons for the steep circ level decline in the first half of this year, while discussing the six key circulation trends which point to the continued circ decline of audited consumer magazine circ levels.
1. Newsstand Circ Continues to Dramatically Decline
Newsstand circ fell from 45.5 million a year ago to 37.0 million in the current period—a staggering 18.7 percent decline of 8.5 million circ. As a result, newsstand circulation’s share of total verified/paid circulation fell to 14.4 percent. This compares to a 20.7 percent ratio just 8 years ago.
TREND POINT: The continuing decline of newsstand sales and the drop in the newsstand circ share of total circulation are key indicators that the industry’s circ levels are not optimal.
2. Number of Audited Consumer Titles Continue to Rapidly Decline
Newsstand circ was a big contributor to the industry’s circ level decline, but the largest contributor was the loss of 69 titles that were discontinued or ceased being audited. The number of audited publications fell by 8.4 percent—from 545 titles a year ago to 499 in the first half of 2009. These discontinued titles accounted for 16.2 million circ. Twelve of these titles reported circ of more than 500,000 in the year previous. This group included; Cosmo Girl (1,400,000), Country Home (1,272,000), Domino (1,115,000), Blender (952,000), Vibe (876,000), Home (829,000), Hallmark Magazine (749,000), Figure (724,000), O at Home (704,000), PC Magazine (646,000), Electronic Gaming (603,000) and BestLife (508,000).
The record title losses were only slightly mitigated by the addition of 23 titles to the auditing ranks. The newly audited titles added 5.1 million circ. However, these newly audited titles (Country, Reminisce, and Birds & Blooms) published by Reader’s Digest accounted for the majority (4.3 million) of the new circ. It should also be noted that these three titles are not newly launched publications, but rather are part of a cadre of unaudited titles Reader’s Digest purchased from Riemann several years ago. The other 20 newly audited titles all had relatively low circulation profiles—less than 150,000 circ.
The net “lost” circulation (newly audited titles, less departing titles) was 11.1 million, which accounts for a major portion of the industry’s 17.3 million circ fall.
*TREND POINT: The trend toward a reduced number of audited titles is likely to continue and it will help accelerate industry circ level declines.
3. More Cautious Circ Level Management Leads to Lower Circ Levels
In the first half of 2009 there were 183 publications that decreased circ five percent or more. This compares to 142 in the year previous and 101 two years ago. Partially offsetting these declines were a record low 41 publications that increased circ five percent or more versus 76 the year previous.
In the first half of 2009 thirty-six publications reported circ decreases of 50,000 or more of which 19 reduced their circ 100,000 or more and six titles that reported drops of more than 200,000—U.S. News (462,000), National Geographic (353,000), TV Guide (339,000), Country Weekly (298,000), Reader’s Digest (289,000) and Playboy (248,000).
There were only 16 titles increasing circ levels 50,000 or more in the first half of the year. This compares to 24 titles in this category a year ago. However, the paid circ increases for three of these titles—FamilyFun, Gamer Informer and Parenting—involved merely substituting analyzed non-paid circ with paid circ. Five of these titles (all relatively new titles) reported increases of more than 100,000—Women’s Health (338,000), People Stylewatch (188,000), Taste of Home (105,000), All You (104,000) and Everyday Food (102,000).
In this period the net level impact of the big gainers and big losers produced an industry circ decline of 3.1 million.
TREND POINT: The growing trend of more cautiously managing circ levels will continue to push publishers toward seeking more optimal circ levels.
4. Announcements for More Discontinued Titles and More Circ Level Reductions Are Waiting in the Wings
There are at least 11 audited titles, whose circ was reported in the first half of 2009, which will be discontinued by 2010. They include Gourmet, National Geographic Adventure, Nickelodeon, Metropolitan Home, Cookie, Fortune Small Business, Southern Accents, Giant, Modern Bride, Nick, Jr. and Fit Pregnancy Moms. Combined these titles reported 5.3 million circ in the first half.
During the second half of this year five publications announced rate base/circ level reductions of 300,000 or more that will take effect in 2010. The effected titles include—Reader’s Digest (2.6 million), Newsweek (1.1 million), Playboy (900,000), Prevention (500,000) and Good Housekeeping (300,000). These reductions account for 5.4 million circ.
In addition, a number of publications announced frequency reductions, including Fortune, Jet, Ladies Home Journal, Reader’s Digest and Playboy.
TREND POINT: These announcements are likely to be a precursor of more title closings and circ level reductions to follow in the next year or two.