Time Inc.'s flagship newsweekly showed the magazine industry the way last week, with bold moves to pare its guaranteed paid circulation by almost 20% and let advertisers choose total audience -- online as well as print -- guarantees for the first time.
A crown-jewel title
Magazines have trimmed rate base before, just by far less and usually out of necessity. (Time itself last cut rate base in 1989, to 4.1 million from 4.6 million.) And publishers who are pushing audience figures have lacked both timely metrics and enthusiasm from buyers. But because Time leads its category and remains a crown jewel for the country's biggest magazine publisher, its latest moves will push the whole game forward.
With a difficult newsstand environment, reader migration to the web and the call for transparency from buyers in how circulation is counted, magazines have been talking about switching to total audience. A total audience sell gives magazines a much larger number to bring to marketers than paid-circulation figures -- in Time's case, an audience of 19.5 million vs. its new rate base of 3.25 million. It's a move many have talked about but not committed to. Whether it works depends on reception from advertisers and agencies.
"This is a new gambit on our part, OK?" said Edward R. McCarrick, president-worldwide publisher at the Time Group, who has been with the magazine for 34 years. "We have to wait to see. I may be sending you postcards from St. Barts if this isn't successful."
Media buyers who control millions of dollars worth of advertisers' budgets said they welcomed the rate base reduction but were less convinced that the audience play represents anything big -- yet.
"I'm all for it," said Eric Blankfein, senior VP-channel insights director, Horizon Media, about the rate-base cut, to 3.25 million from 4 million. The reduction takes Time within spitting distance of Newsweek and its 3.1 million rate base but looks good to buyers because it suggests Time won't spend a lot of energy meeting a higher guarantee with less-valuable circulation channels.
The emphasis on audience is more tangled, buyers said. Being able to offer a near-real-time guarantee for audience, which Time pegged at 19.5 million, is an advance. That's thanks to Mediamark Research, which is supplementing its twice-a-year figures with a more frequent, issue-specific audience-accumulation survey. Time is its first customer.
"Selling on an audience basis is fine," Mr. Blankfein said, "but you can't weight the third or fourth reader down the line equally with the person who bought the magazine." As cutting rate base to push for "quality" circulation suggests, after all, publishing is less and less about quantity and more and more about quality.
George Janson, Mediaedge:cia's managing partner-director of print, agreed that guaranteeing eyeballs doesn't address the targeting advertisers demand. "If you do buy readership, you buy against a certain demographic," he said. "You could buy against 18- to 34-year-olds or against professional managerials."
Mr. McCarrick declined to address some issues not mentioned in the announcement, such as rumors among staff that layoffs are coming before Christmas. "We're not even talking about layoffs at this point," he said. "We want to stay focused on revolutionizing and changing the entire publishing formula."
Other changes: a cover-price hike to $4.95 from $3.95, which will no doubt get played up when Time makes its "quality circulation" argument; elimination of circulation sponsored by outside partners; and a cost-saving reduction in targeted editions such as Time Gold, which had been aimed at readers over 50.
Of course Time will have to swallow an ad-rate cut commensurate with its reduction in paid circulation, Mr. McCarrick allowed. But the business isn't just about magazines anymore -- at least not the way magazines used to operate. "We will eventually be able to have some format of total audience delivery between the net and the magazine, of the Time brand as opposed to Time magazine and Time.com," he said. "That's a work in progress."