Rodale's Prevention Cuts Rate Base 15%

Chasing Subscriptions Doesn't Bring in Ad Revenue

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NEW YORK ( -- There's not much shock value anymore when big magazines cut their paid circulations, so Prevention's decision to shrink by 500,000 copies isn't making much of a stir.

The 15% cut returns Prevention to a rate base it hasn't seen since 1986.
The 15% cut returns Prevention to a rate base it hasn't seen since 1986.
The 15% cut, which reduces the circulation guarantee to 2.8 million, is substantial, to be sure. It also returns Prevention to a rate base it hasn't seen since 1986.

But the downsizing follows major paid circulation cuts at magazines including Newsweek, Time, U.S. News & World Report, Playboy, Reader's Digest, Outdoor Life, Star, In Touch, Life & Style, Woman's Day, BusinessWeek, Ski, Skiing, TV Guide and The Sporting News. The industry had run up paid circulation in the hunt for higher ad rates, but competition from new media and then the recession made advertising much less likely to support that model. The business needed, among other things, to rethink its approach to rate base.

The real surprise is that these cuts aren't happening more, publishers and ad buyers frequently say.

"What's happening is that some of the magazines are using verified," said George Janson, managing partner and director of print communications at Mediaedge:cia. "Verified" means copies that the industry considers "paid" even though publishers distribute them free to public places such as hair salons and waiting rooms.

The category was controversial at first, but in a weird twist, digital media's disruptive influence has actually given magazines better cover for relying on those copies.

"The research doesn't bear out that there's a necessary drop-off in user engagement and wanted-ness, so you have to look at the venues and the trends," Mr. Janson said. "In an ideal world we'd want consumers to pay, but in an era when consumers are getting free information and content from the web, it's not possible," he added. "You have to look at it on a case-by-case basis."

Last week, Blender magazine demonstrated that verified has its limits. The title quit print despite pushing its paid circulation to 1 million from 800,000 in just a few years -- largely by increasing its verified circulation to 100,000 in the second half of last year from just 13,000 the year before.

Prevention reported average paid circulation of 3.3 million copies in the second half of 2008, down 1% from the second half of 2007, including a 14% drop on newsstands, according to its reports to the Audit Bureau of Circulations. Ad pages fell 12% last year, according to the Publishers Information Bureau, and another 23% from January through April, according to Media Industry Newsletter.

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