Results, while promising, were hardly dramatic, according to Advertising Age's 14th annual Magazine 300 report. The report calculated gross revenue growth of 3.1% to $29.40 billion from these elite publications for the year, the sum of gross ad revenue (up 3.4%) and gross circulation dollars (up 2.4%).
The ad-page tally, however, remained adrift, dropping 4.4% atop a disastrous 15.1% decline in 2001, according to the compendium of 232 consumer and 68 business publications that range from AOL Time Warner's People at $1.2 billion gross revenue, up 6%, to Reed Elsevier's Publisher's Weekly at $17.9 million, down 6.6%.
The rebound from 2001-the nadir year for magazines-set the industry on more solid footing to expand in 2003. In 2001, the Top 300, held in thrall by recession and the events of Sept. 11, declined 3.1% in collective revenue, represented by a 6.9% slump in ad revenue and a growth in circulation revenue of 3.2%.
Publishers this year increased their ad-page rates an average 6.2%, up from a 5.7% hike in 2002 for a one-time b&w ad, a key measurement monitored by Ad Age in this report. They also have shied from fiddling with subscription and newsstand pricing, holding the line on both. In 2002, sub prices grew 3.3% and newsstand prices 6%, tandem moves that boosted circulation revenue 2.4% but lost readers. In 2002, sub growth for the Top 300 notched a 0.1% gain to 316.66 million subscribers; newsstand copies sold hit a collective 44.69 million, down 2.9%.
JUST FOUR CUT RATE BASE
Only four of the Top 300 magazines lowered their guaranteed rate base in 2003; most kept the same base as 2002 or upped it slightly-good reason to keep circulation prices stable. The trade-off in raising subscription and newsstand rates is a reduction in paid circulation. In 2002, People suffered a 2.4% decline in paid circulation although its gross revenue from circulation rose largely because of a 30-cent per issue hike at the newsstand.
The ad side is definitely brightening in 2003. In the first eight months of 2003, consumer magazines were up 9.6% in ad revenue on 1.1% more pages than in the corresponding period in 2002, according to PIB/TNS Media Intelligence/CMR Magazines. Business publications were down only 5.3% in ad revenue on an 8.8% decline in pages in the first half of 2003 compared to the prior-year period, according to TNS/MI/CMR's business-to-business data.
The business data, while hardly sterling, improves on the 10.4% slump in ad revenue and 10.5% decline in pages for 2002 by business publications in the Top 300. Consumer magazines easily outperformed their business counterparts in the Top 300, generating 5.7% growth in ad revenue on 1% fewer ad pages in 2002. In circulation, consumer magazines rose 2.5% in gross revenue in 2002 as subscribers flattened out (up 0.2%) and newsstand buyers slipped 2.8%; business pubs fell 0.5% in gross circulation revenue as their sub count fell 1.8% and newsstand copies plunged 11.8%. Corporate cutbacks in ad spending and rising unemployment have hurt business publications among the Top 300.
The shaky economy proved perilous to a host of Top 300 magazines: In 2002, Primedia closed Teen and Skin Diver; Reader's Digest Association shuttered New Choices; Ziff Davis Media darkened Ziff Davis Smart Business and Yahoo! Internet Life; Bauer Publishing Co. axed Soap Opera Update; MCG Capital Corp. closed Upside; AOL Time Warner terminated Mutual Funds and Sports Illustrated for Women, and Bertelsmann ended its run with Rosie. Closings have continued in 2003, and include Red Herring Communications' Red Herring, Hachette Filipacchi Media U.S.' Travel Holiday, Hearst Corp.'s Victoria and AARP's My Generation.
In 2002, 13 publications fought back declining ad pages by reducing page rates, ranging from a 2% dip at Reader's Digest Association's Reader's Digest to 50% at Primedia's Soap Opera Digest. In 2001, 19 of the Top 300 cut ad rates, and by mid-2003, 12 of those had yet to hike it back to pre-2001 levels.
For the third year in a row, People claimed the top spot, with $713.6 million in gross ad revenue, up 8.7%, contributing most of its $1.20 billion gross revenue take. Sibling publication Sports Illustrated rose from No. 4 position in 2001 to wrest the No. 2 spot from Gemstar-TV Guide International's TV Guide. Most of SI's $919.4 million gross revenue, up 9.2%, came from the ad side. TV Guide's gross revenue was $904.5 million, down 5.4%, with most of its decline due to a lower ad take.
TV Guide collected $552.5 million gross from circulation, a slippage of 2.5% credited to a 24% plunge in single-copy sales that cut newsstand purchases below one million for the first time in the history of this report.