No such thing as a free launch

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In a more freewheeling time, people like Jann Wenner, Bob Guccione Jr. and Jane Pratt had the inspiration and audacity to go against the grain. These scrappy, hungry dreamers emerged to create brands, not just for their magazines-Rolling Stone, Spin, and Sassy, respectively-but for themselves as well.

So who are this generation's iconoclasts in the magazine world?

With trends like the growing consolidation under a handful of major publishing houses-which has led to an emphasis on multititle ad buys-and the difficulties posed by an overcrowded newsstand, it seems increasingly prohibitive for new rebels in independent publishing to emerge.

"Wholesalers were distributing more than 5,000 titles in 2000, so we're reaching saturation in the marketplace," says Samir Husni, professor of journalism at the University of Mississippi. "That along with postal hikes and the dismal ad situation is squeezing little guys and only people who can brand their name in more than one medium will make it."

Consider that O, the Oprah Magazine, one of the few legitimately blockbuster magazine start-ups in the last few years, was launched under the auspices of the deep-pocketed Hearst Magazines and leveraged the existing popularity of talk show host Oprah Winfrey.

Many of the newcomers on newsstands offer stylish visions, such as Flaunt, Nylon, Surface and NY Black Book, but how far can these single titles get on good looks and charm? Even before the tragic events of Sept. 11, the number of magazine launches was decreasing. According to Mr. Husni, 450 new magazines were launched nationwide this year through August, which is almost 150 titles less (a 25% drop) than the comparable period last year.

Making the odds longer is the growing reticence of venture capitalists and other sources of private equity. "If you're profitable, there's money out there. If you're in the start-up phase, there's no money out there," says Mark Edmiston, managing director of AdMedia Partners and a former veteran Newsweek executive. "You'd have to finance it yourself in that case."

That is exactly what Lara Hedberg Deam has done with her upstart shelter every-other-monthly, Dwell, which claims a year after launch has grown its circulation to 100,000. Ms. Hedberg Deam has the advantage, however, of having benefited from what she jokingly refers to as the "birth lottery." With no previous journalism or ad sales experience-she had been active as a philanthropist-Ms. Hedberg Deam developed a passion for modern design and a strong urge to express her own ideas while remodeling her California home, which ultimately led to the creation of Dwell.

"People are more design savvy than ever before and that's translating into their homes. Relating more intellectually to their spaces is a trend," Ms. Hedberg Deam says.

Mr. Husni is impressed. "It's down-to-earth and doesn't have the grandiose approach that [the now defunct] One did."

Ms. Hedberg Deam created a national sales force stretching from New York to California. "Right now, it seems like we're growing faster than we anticipated and that may require more financing. I'm looking at all options including continuing to finance the operation myself."

Of course, most people aren't as fortunate as Ms. Hedberg Deam. Just talk to Eric Garland, the former CEO and editor of Dads, which withered into oblivion earlier this year when the cash ran out after just three issues.


"You can launch independently an extremely targeted niche magazine with circulation in the tens of thousands, but to launch a full-fledged national consumer book is difficult," says Mr. Garland. "I learned a tough lesson."

Mr. Garland refuses to blame the economy. He believes that even if the flush times during the dot-com infatuation hadn't petered out, venture capitalists would still have been loathe to finance a print vehicle.

"Once a month, I get young people who want to start a magazine, and it's sad because their ideas are just as good as Sassy [launched in 1987]," says Ms. Pratt, now the editor in chief of Fairchild Publications' Jane. "The climate is so different. The crazy, rebellious types are on the Internet now as opposed to magazines."

"The independent success story seems to be a once-in-a-decade phenomenon-Wired is probably the last example," Mr. Garland says.

Chip Block, publishing strategist at Ziff Davis Media, agrees. "If entrepreneurs have a good idea, the best thing to do is run it on a tight basis and hope to catch lightning in a bottle. Magazine launches nowadays are mostly a big company exercise."

Bob Guccione Jr., who made his bones with Spin before starting his current venture Gear, goes as far to advise, "If I were in the shoes of these young guys, I might very well become a part of a conglomerate, because it will be like hitching a ride on the learning curve. ... The only option is to have a lot of money to throw at it until you learn the business."

Reed Phillips, managing partner of DeSilva & Phillips, a company that specializes in magazine brokering, takes a more sanguine view. "Good start-up ideas seem to find money regardless of the economic environment," he says. "What will happen now is that not-so-good-ideas probably won't get funding."

But the recent closing of the independently launched Mode points to the increased pressures single-title publishers face. Though on the market for months, no publisher in the end was willing to pony up what was expected to be a relatively small sum to purchase the title from half-owner Freedom Magazines.

"The market was certainly the reason for folding. ... It's unfortunate that this distinct category of full-figured fashion will now be left with a huge void," says Publication Director Nancy LeWinter.

The fashion title was aimed at the 65 million American women, who wear a size 12 or higher who, Ms. LeWinter claims, possess in excess of $50 billion in annual purchasing power.

The steady growth notwithstanding-in four years, circulation grew to 600,000-co-founders Ms. LeWinter and Julie Lewit-Nirenberg were concerned about the current downturn in the fashion industry, and the events of Sept. 11 did nothing to buoy their spirits. "We were much more susceptible to swings in this market as a stand-alone," Ms. LeWinter says.


So if magazine entrepreneurs are indeed personas non grata to the capital markets and you don't have millions stashed away, then starting a new magazine as an offshoot of a pre-existing business model could be a viable strategy.

Rob Stone and Jon Cohen, two music executives, in 1999 launched The Fader, a quarterly out of New York that covers urban culture, fashion and music, after having established themselves through Cornerstone Promotion, a music marketing outfit. With a 75,000 circulation geared toward "taste-makers," Messrs. Stone and Cohen are committed to growing the circulation to 200,000 by the end of 2002, but have no designs about expanding beyond that.

"We want to expand revenue, but we don't want 1 million circulation," Mr. Cohen says. "We want to remain committed to a niche audience where we reach those tastemakers."

But for the majority of independent publishers, Mr. Husni points to the trail of broken dreams-littered with such roadkill as POV, Icon and Swing-that paints a bleak picture for young turks hoping to succeed.

"The breakeven point used to be two to three years. Now it's taking five years, which makes financing tough," Mr. Husni says. "We'll have smaller circulation magazines survive, but it's going to be hard to find the next Jann Wenner."

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