READER'S DIGEST TO SHUTTER, SELL HEALTH MAGAZINE: TIME INC. SET TO BUY ASSETS OF 'AMERICAN HEALTH' TITLE

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Reader's Digest Association is folding its ailing American Health after nearly a decade of financial struggles, and will sell the magazine's assets to Time Inc.

Time Inc. publishes rival Health and will use American Health's subscriber list to boost its own circulation, according to executives close to the company.

The October issue, which has gone to press, is expected to be the last.

Gregory G. Coleman, RDA senior VP and president of U.S. magazine publishing, said, "I can't discuss any of that stuff until we have all our ducks in a row."

However, on Aug. 13, users who tried to visit American Health's Web site were automatically shifted to the site of its parent company, which no longer listed American Health among its properties.

FINDING A VOICE

The 17-year-old health and wellness publication has had difficulty finding a distinctive voice in recent years, even as Americans' demands for health-related information has soared. The magazine saw circulation zoom up to more than 1 million last year, but an executive familiar with the publication said it has never turned a profit since RDA purchased it from Owen Lipstein in 1990 for a reported $29.1 million.

The executive said things were so difficult that bundled ad sales with flagship Reader's Digest were keeping American Health afloat.

Ad pages this year are up 9.4% over the same period last year, to 373. Yet, even as healthcare marketers have increased ad spending, total ad pages for 1998 fell 1.6% from the previous year, to 520, according to Publishers Information Bureau. American Health's ad pages lately have trailed Health and Prevention.

"The predominant focus of the company in terms of new growth has been on the Internet or alliances as far as building the brand," said analyst Rudolf Hokanson of CIBC Oppenheimer Corp. "It has not been in building the non-Reader's Digest readership stable."

American Health has a paid circulation of 1,007,972, compared to 1,059,079 for Health and 3,143,783 million for Rodale's Prevention, according to the Audit Bureau of Circulations.

'NEVER FLOURISHED'

"It never under Reader's Digest flourished and finally it was just a matter of time," said Samir Husni, a professor of journalism at the University of Mississippi and close industry observer. "It was like a patient with terminal illness."

Mr. Husni and other industry observers said the magazine has labored unsuccessfully to find a niche within the expanding health information market, which has recently grown more crowded with the proliferation of health-focused Internet sites.

"They've been struggling editorially," said Roberta Garfinkle, senior VP-director of print media at McCann-Erickson Worldwide, New York. "It's sad, but

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