Magazine of the year: People

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Midafternoon on Sept. 6, hours before People had to close its annual "Best & Worst Dressed" issue, Managing Editor Martha Nelson called her production department to ask for an extra eight pages.

They were for Katrina, although Julia Roberts's twins were too young to volunteer to help, Jennifer Aniston wasn't Breaking Her Silence and Kenny Chesney wasn't a hurricane victim (other troubles awaited him).

After confirming the capability of all five production plants and the cooperation of Publisher Paul Caine, Ms. Nelson assembled a cover that neatly reflected the contradictions of mass-market magazine publishing this year-not just for the cover line "Courage in Chaos."

It pictured New Orleans residents fighting through chest-deep water, an exhausted-looking rescuer wiping his face and a house nearly flooded to the eaves. At the top right, the cover also said, "Plus Our Annual Best & Worst Dressed."

For handling the Katrina disaster more deftly than the government, but more importantly for reaching the highest circulation in its 31 years, holding its position atop Time Inc.'s formidable magazine portfolio and confidently navigating the foamy, sometimes filthy, currents of celebrity weeklies, People is Advertising Age's 2005 Magazine of the Year.

REALITY VENUE

"In a way, you could say People is the original reality venue, with their stories on the one hand about celebrities and on the other hand glorifying real people and kind of treating them like celebrities," says Beth Fidoten, senior VP-director of print services at Initiative, New York. "Its reach, its immediacy, that combination of celebrity and real people, and the generally positive environment are very advertiser-friendly."

When Time's single page of weekly celebrity news coverage expanded into People in 1974, featuring Mia Farrow on the first cover, reasonable skeptics wondered whether Americans would read (and look) so much on the famous.

Reasonable skeptics ask the same question today about proliferating celebrity weeklies, syndicated entertainment news shows, Hollywood gossip columns and stargazing blogs. And every day, celebrity magazine sales still leave skeptics looking unhinged.

People remains at the top of those sales. It claimed an average paid circulation of nearly 3.8 million for the first half of 2005 in its statement to the Audit Bureau of Circulations. (For those-like the U.S. Attorney in the Eastern District of the Court of New York-keeping an eye on sponsored sales programs, People reported just 62,431 sponsored copies.)

That franchise-record circulation represented a gain of just 1.3% over a year earlier and placed People No. 11 among magazines in circulation. But only four of the top 10 grew at all, and none grew more than People.

No less impressive, People charges an average of $99 a year for a subscription. That's a mere tank of gas to many, but it's also way above industry norms.

"It is a staggering number," Jennifer Ogden-Reese, consumer marketing director, says with evident pride.

People is widely believed to be the most profitable magazine being published, contributing more than $400 million to Time Warner's bottom line. Ad Age's Magazine 300 Special Report (AA, Sept. 26) placed People at the top with total gross advertising and circulation revenue of $1.3 billion in 2004, up 2.9% from 2003.

When Ms. Nelson returned to People as its editor on April 1, 2002, following a triumphant turn as the founding editor of In Style, she had plans, she had wisdom and she had control of the strongest pop weekly going. Then she had a problem: Bonnie Fuller's relaunch of Us Weekly shot into the stratosphere.

"Before I even had a chance to begin to do all the things I wanted to do at People, I was thrown into a new competitive arena, the likes of which no one had ever seen before," Ms. Nelson says. "It's only gotten crazier and more crowded each year."

CELEBRITIES GALORE

Advertisers and readers then began to believe that People had direct competition in Us Weekly (2004 Magazine of the Year).

Publishers thought so, too, and filled the space with weeklies loaded with celebrity content. The pack now includes In Touch Weekly, Celebrity Living, the revamped Star, Life & Style Weekly, Inside TV and most recently OK.

Mr. Caine, the publisher, insists that People still stands alone. "Celebrity tabloids have definitely created a very exciting and new category," he says. "Because of their frequency and use of celebrities, many advertisers think now there's a direct competitor to People. But there still is not. We compete with the mass-reach titles, all the weeklies and anyone who reaches women."

People does restrain itself in ways rivals do not, as in Web coverage of baby deliveries in progress. "I prefer to wait until there is a happy birth to announce," Ms. Nelson says. "I don't think that People needs to be a magazine that's telling you about what contraction a woman is having."

But it's OK to announce an impending blessed event, like earlier this month when People.com broke the news that actress Katie Holmes was pregnant with fiance Tom Cruise's child.

And that's not to say People is above the lowbrow, trivial or sordid. Take its exclusive excerpt from the book by Amber Frey, whose main hold on public attention was having slept with Scott Peterson, the man later convicted of murdering his pregnant wife, Laci, in a case that received a disturbing degree of attention.

The combination of confection and caring-to say nothing of the title's mass reach-has consistently seduced advertisers. From January through September, People racked up 2,718.7 ad pages, according to Publishers Information Bureau, more than any other magazine and 6.5% more pages than it accrued during the same period in 2004.

By percentage gains, Bauer Publishing's In Touch won the celebrity pack with a 37.8% improvement, but in absolute terms it totaled just 466.7 pages. American Media's Star came next, with a 29.4% increase and 688.9 pages. Us Weekly, a joint effort of Wenner Media and Walt Disney Co., tacked up a 13.3% jump to reach 1,311.4 pages. On average, all magazines tracked eked out an ad-page increase of 1%.

The runaway champ is, of course, trying to solidify and expand its power, partly by cooperating with No. 1 retailer Wal-Mart Stores, Ms. Ogden-Reese says. People created an outdoor promotional program called "People Live" that visited parking lots outside 20 Wal-Mart supercenters last year.

The magazine also created new rack displays for its "Sexiest Man Alive" issue just for Wal-Mart. People sales in Wal-Mart last August were 50% higher than 18 months earlier.

For millions of readers, People remains a first read and Us Weekly or another celebrity weekly is a second, as if People were The Wall Street Journal and its competitors were local business sections.

"We do know that our consumers sample the competition," Ms. Ogden-Reese says. "They do not defect."

Prime-time ‘People’

People, with $1.3 billion in gross revenue, according to the Magazine 300 report (AA, Sept. 26), leads the Time Inc. powerhouse stable that includes Sports Illustrated and Time

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