Talks involving the two companies center on the tobacco marketer relinquishing editorial control to Hachette and allowing Unlimited to become a full-blown magazine, with subscription and newsstand distribution. Currently, only smokers who pay $6.95 per year or fork over 100 "Marlboro Miles" proofs-of-purchase receive the title, which bills itself as focusing on "action, adventure, good times."
A decision on the switchover is expected by summer. Under the current custom-publishing contract, the fifth and final issue of Unlimited is set to be distributed in November.
NEW NAME LIKELY
Hachette declined comment and Philip Morris did not return phone calls by deadline. PM agency Leo Burnett USA, Chicago, is involved in the talks but referred calls to PM.
Publishing insiders said they expect that if a deal is done, the title will drop the Unlimited name for a new moniker and a new cover design that would make the magazine stand out on newsstands.
Should PM give up the magazine, it might well mean the end of the reported $500 million "Unlimited" promotion for the U.S.' 14 million Marlboro smokers. The Unlimited marketing strategy includes other consumer promotional elements, such as branded clothing and a private train ride sweepstakes that has been plagued by delays. Consumers trade Marlboro Miles for the prizes.
If the magazine makes the relatively rare jump from a custom project to a stand-alone consumer title, it will have a powerful base from which to launch, since current circulation of Unlimited is 1.5 million.
Hachette is already selling ads to companies other than PM in non-competitive categories. The debut issue featured ads from Pioneer
Electronics, Southern Comfort, Absolut vodka, Coty's Gravity for Men fragrance and Paramount Pictures. The current cost of a color page is
$30,000, relatively low for such a broad-reach vehicle. Despite potential drawbacks-such as convincing readers and advertisers of the magazine's editorial independence-there could be advantages to both parties in letting
Hachette take control of Unlimited.
Hachette would be able to launch a new title while holding down start-up costs by taking advantage of PM's database of smokers. Magazines traditionally spend $15 to $20 per name building subscriber lists through the direct-mail route. PM, meanwhile, could reduce the marketing costs involved with the custom magazine while maintaining a deal that gives category exclusivity to its cigarette brands. It may also be looking to ease regulatory pressure on tobacco marketing