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Tuesday, April 10, 2012

Magazines, Skirts & Books

There’s a saying on Wall Street that stocks rise when skirt lengths shorten.  In bad times, longer skirts tend to be the fashion.  There may be a similar parallel when examining the health and success of magazines with that of book publishing.

In 2007, 2008, and 2009, magazines were folding up at a fast pace.  In each of those years, more than 700 closed shop.  Based on the first quarter of 2012, when just 12 folded up, we are on pace for fewer than 50 to go under for the year.  Could the magazine industry be making a comeback after combating the Great Recession and confronting the growth of the Internet.

To examine how the magazine industry is doing a number of factors need to be explored:

·         Newsstand sales
·         Subscription fees
·         Subscription totals
·         Cover price
·         Number of ad pages
·         Revenue from ad pages

Additionally, how are magazines making money off their Web site and digital properties?  Are ad revenues or online subscriptions on the rise?

Book publishing looks at different numbers, such as:

·         Price of a hardcover and number of sales
·         Price of a trade paperback or q mass market paperback and number of sales
·         Price of an eBook and number of sales

It also looks at selling various rights, such as:

·         Audiobooks
·         Foreign language
·         Movie or TV

It doesn’t collect any kind of ad revenue nor does it have any type of loyal customer subscription rate—at least not yet.

Book publishing does look to see if an author can brand his or her name, as well as if the sale of a new book gives resurgence to sales of the author’s prior books.

So, to measure the health of either industry, is, to a degree, measureable and statistically possible but to compare them to one another is a bit more challenging.  Nevertheless, when print magazines show growth it can only be a positive indication that the book industry will grow too.  Why?

For one, when consumers spend more on information and entertainment such as a magazine—it is an indicator that people have discretionary income for things like books.

Second, the fact that people pay for a magazine when they can get a lot of the content for free online is another sign people will buy books, which offer longer content that is based on experience, research, and access to information not always found elsewhere.

Third, some magazines cost more than a discounted paperback or an e-book so if people can afford magazines, they can buy books.

Lastly, many magazines write about books so the more people read about books, the more likely they will buy them as well.  Wall Street has been way up the last few years, but I haven’t seen a rash of mini-skirts flood the streets yet, so maybe seeing magazine closings decrease dramatically may not mean the book industry will grow wildly but I see reason for optimism. 

And I look forward to seeing shorter skirts this summer.

Brian Feinblum’s views, opinions, and ideas expressed in this blog are his alone and not that of his employer. You can follow him on Twitter @theprexpert and email him at brianfeinblum@gmail.com. He feels more important when discussed in the third-person.

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