Why BusinessWeek Deal Is Good for Future of Content

An Ad Age Editorial

Published on .

What a wrenching year for the magazine industry. When Condé Nast Publications (which in the not-too-distant past was thumping its chest about passing Time Inc. in ad-page totals) shuts down four titles, it's time to reassess the measures by which we deem a magazine business successful or unsuccessful. Such a reassessment is one of the reasons we feel optimistic about the purchase of BusinessWeek by Bloomberg LP. It's a vote of confidence that a future can be found in asking readers to pay more for content.

Bloomberg does not have a great history in ad-page sales. What it does know is how to give its very specific audience the news and information it wants in a package that commands a high price. Bloomberg President Daniel L. Doctoroff said last week that BusinessWeek could also be asking its readers to pay more, noting that BusinessWeek's subscription price is $35, whereas The Economist charges $106.

When Condé Nast shuttered Gourmet, observers were quick to bring up its polar opposite in business models, Cooks Illustrated, which boasts that it takes no advertising and charges readers $24.95 for an annual six-issue subscription and access to its website ($34.95 for a yearly membership). Gourmet's website was free, and its annual subscription price for 12 issues was $15. Gourmet's editorial wasn't the problem, as is evident from the great outpouring of shock and disbelief among readers that it was closing. It was its business model that did not adjust quickly enough.

Consumers paying more for access to entertainment and information, delivered how and when they want it, is a trend that is solidifying into conventional wisdom. Even McGraw-Hill, which sold its flagship title for under $5 million -- an amount that three years ago would have seemed absurd -- was getting kudos for shedding an ad-dependent business to focus on specialized-information businesses commanding high prices.

Here at Ad Age, we've done a reassessment of The A List, our annual awards for magazines, to take into account the shifting landscape.

We're betting that magazine brands with the brightest future are those that have a deep connection with their audience, tailor content and information in smart packages, and find more ways of making revenue than just racking up the ad pages.

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