Magazine Merger Redux
I was deluged by responses to my article about Macworld and MacUser merging last week (TidBITS-392). Frankly, I was surprised by the volume, since I hadn’t made any controversial comments in the article. People obviously take their magazine subscriptions seriously.
Subscriptions — First off, a FAQ on MacUser’s Web site makes it clear that the merged magazines will be honoring subscriptions appropriately. So, Macworld subscriptions will continue with the new Macworld. MacUser subscriptions will convert to Macworld subscriptions. And, if you subscribed to both Macworld and MacUser, your MacUser subscription will be tacked on the end of your Macworld subscription.
<http://www.zdnet.com/macuser/mumwfaq.html>
International Clarification — Next, I should have noted that the international versions of MacUser and Macworld are unrelated to the U.S. magazines of the same name, although they sometimes republish U.S. content. The Macworld/MacUser merger in no way affects these international publications.
The Role of the Internet — Most of the messages commented on my musings about the role played by the Internet in the collective woes of the magazines. Numerous readers said that they’d stopped subscribing to Macworld or MacUser because they could now get information on the Internet (even from the Macworld and MacUser Web sites) in a more timely and less expensive fashion (the prices of U.S. magazine in other countries are often exorbitant). As expected, most of the people complaining about the timeliness and cost of the monthly magazines were from countries other than the U.S and Canada, but even people in North America noted that they preferred the Internet to paper. Of course, TidBITS readers are self-selected for being the sort of people to move from print to the Internet for their information, and none of the folks I’ve talked to at Macworld or MacUser believe the Internet played a major role in the loss of subscribers and ad revenue.
However, there is a temptation for U.S.-based folk to assume that overseas readers made up a relatively small percentage of the Macworld and MacUser circulation numbers. Those numbers are unknown, though we do know, for instance, that roughly 20 percent of the 47,000 people on the TidBITS mailing list are from other countries. Still, Andrew Nielsen <[email protected]> warns:
Care should be taken with generalisations relating to "foreign" consumption of U.S.-produced items, particularly when no actual data is used to back such suggestions. It took a long time for the powers-that-be at Apple to recognise that some 40 percent of Macs were being purchased off-shore. I also remember being irate at Apple at the first WWDC I went to where there were many registration queues for U.S. attendees, and only one for "world-wide" attendees – figure that one out.
What about MacAddict? A number of people wondered if MacAddict, which has been publishing for about a year, may have caused some of the woes of Macworld and MacUser. I spoke with Cheryl England of MacAddict, who joked that MacAddict was obviously the primary reason for the merger. On a more serious note, she said that MacAddict’s circulation is up to about 160,000 now, and has been growing steadily since the magazine’s last audited circulation of 127,000 six months ago. There’s no question that MacAddict’s optimism and brash upstart attitude provide an alternative to the more-established tones of Macworld and MacUser, and that was reflected in comments from some readers as well.
Cheryl noted that MacAddict may have affected Macworld and MacUser in other ways. First, newsstand sales for those magazines may have suffered when MacAddict joined them on the shelves. People browsing for a Macintosh magazine were suddenly offered three choices rather than two, which couldn’t have helped Macworld and MacUser.
Second, Cheryl said that MacAddict’s CD-ROM, which is integrated with every issue (as is the MacAddict Web site, since the magazine, CD-ROM, and Web site were designed simultaneously), might have lured some advertising away from the larger magazines; America Online, for instance, could buy space on the MacAddict CD-ROM rather than sponsoring an entire CD-ROM. CD-ROM advertising would seem very different from print or online advertising since it’s primarily a method of distributing large files, such as the AOL client software or massive game demos.
Ad Sales Rule — This talk of circulation numbers may be deceptive since print magazines make most of their money on advertising. I’ve been told that subscription fees roughly pay for the cost of printing and distributing the magazine, whereas advertising pays for the staff and infrastructure, plus provides any profit. Considering the number of people it takes to create a large glossy magazine, especially one with a testing lab, the advertising money must roll in for a magazine to remain healthy. (Only a few paper-based magazines, including Consumer Reports and Cook’s Illustrated, shun advertising in favor of a subscription-based business model, but they’re exceptions to the rule.)
Circulation and advertising are related – the higher the circulation, the more you can charge for an ad. However, the number of companies who want to advertise in a Macintosh publication is finite, and from a pure revenue stance, Macworld and MacUser were beating each other up over the same set of advertisers. Even worse, major mergers remove advertisers – if both Fractal Design and MetaTools advertised in a magazine, when they merged into MetaCreations, there’s a net loss of a big advertiser. Ceasing the battle for the remaining advertisers was probably the most significant reason for the merger.
However, there’s another twist on the ad sales front that may be even more important. Roy Leban <[email protected]> of Akimbo Systems notes:
You didn’t mention the role played in the merger by the mail-order catalogs. The decline in ad revenue for the magazines can be tracked to the rise of catalogs. Every square inch in a catalog, except for the table of contents, index, and address/postage area is a paid advertisement, and this includes even the front and back covers. If a company doesn’t advertise in a catalog, that catalog won’t carry its products. Period. If you stop advertising for even a month, the catalogs stop carrying your products.
This means that many companies choose to advertise in catalogs instead of magazines rather than in addition to magazines. After all, what good is a magazine ad if customers call the catalogs and can’t buy the product? Only well-off companies can afford to advertise everywhere.
In the Macintosh world, catalog sales make up a much higher percentage of the market than in the Windows world, and I think that has a lot to do with why the catalogs have had a greater negative impact on Macworld and MacUser’s ad revenues.
Oddly enough, this information isn’t common knowledge. Perhaps all the loyal fans who have come out to support Apple lately will spend some energy supporting the small Macintosh companies who so desperately need their support.