MARKETRENDS; HEARST REWRITES BASE, AD RATES; RIVALS PLAN LESS DARING MOVES

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Hearst Magazines made a bold statement last week, hiking ad rates 5% across the board while reducing rate bases effective Nov. 1, but others in the publishing industry say they're loath to make such dramatic moves.

Instead, most other major publishers say they are planning ad rate increases of close to 10%, but not until January when some rate base guarantees also will be trimmed.

"It's a bold move," said Time Inc. President-CEO Don Logan. "I applaud them for stepping up and taking the lead on this issue."

Hearst President Claeys Bah-renburg said the moves are designed to shed marginal readers. The company is also raising cover prices as of Nov. 1.

"We are concentrating on our core, franchise readers, and asking them to pay more," he said.

Mr. Bahrenburg is counting on audience readership levels-which include paid circulation and pass-along readers-to hold steady. "Total audience will not decline," he said. "We are convinced of that."

Hearst executives concede an advertising falloff of 5% to 10% is "conceivable."

Industry experts say the move will shave some $30 million off printing, postage, paper and production costs next year for Hearst. Readers are being asked to pay more with aggressive newsstand and subscription prices.

Start-up Marie Claire and SmartMoney, a joint venture with Dow Jones & Co., are the only titles exempt from the rate base reductions. For example, Good Housekeeping's base will drop 10% to 4.5 million; Redbook will fall 12.5% to 2.8 million. Good Housekeeping's subscription price jumps $2 to $19.97 per year while Cosmopolitan's newsstand price goes up 50 cents to $2.95, and Esquire also tacks on 50 cents to $3.

The decision came just before Hearst's new trade ad campaign, breaking Aug. 14, from Landey & Partners/Ground Morris, New York, with the theme "Redefining magazines into the 21st century." "If advertisers are buying strong editorial environments it won't hurt, but for people buying eyeballs at the lowest possible price it may hurt" ad sales, said Roberta Garfinkle, senior vp/director of print media at McCann Erickson, New York. All magazine publishers are reacting to paper prices which have gone up for six consecutive quarters stretching back to last fall. The overall price this year is 40% higher than a year ago and early indications are for another hike in coated groundwood in October.

So far, however, nobody is falling in line with the same sweeping approach as Hearst.

Conde Nast President Steve Florio said he was still sticking by his early pledge not to put in any midyear rate increases. But on Jan. 1 Conde Nast plans to hike ad rates by 9.5% on all magazines, including Vogue, Glamour and Vanity Fair.

David Pecker, CEO of Hachette Filipacchi Magazines, said he plans to hike the ad rates of Woman's Day by 12% Jan. 1. Elle at that time will jump 8%, but most of the other magazines in the company will probably jump 6% to 8%. The only rate base decline will come at newly acquired Mirabella, but that had already been planned. For its relaunch in September, Mirabella's rate base will be 550,000, down 50,000.

Time Inc. pushed through midyear ad rate increases of about 5% for Money and Entertainment Weekly, which also raised its rate base 2.2% to 1.15 million. Money's rate base didn't change. Mr. Logan said he plans to be "more aggressive" in raising ad rates in January than in past years.

At Meredith Magazines, President Christopher Little called the Hearst move "extraordinary and unprecedented . . . What a lot of people are overlooking is that one of the world's largest consumers of coated groundwood paper has suddenly said they are going to cut back their consumption by 10%-and it's likely to be permanent."

Media buyer reaction was mixed.

"I can't believe that [Hearst] thinks it can cut the rate base and raise the ad rates at the same time," said Michael Lotino, exec VP-chief media officer of Ammirati & Puris/Lintas, New York.

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