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Chapter%205%20-%20Lecture%205 - CHAPTER FIVE Magazines...

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Unformatted text preview: CHAPTER FIVE Magazines Snapshot of the magazine industry in 2010 Unlike newspapers, magazine circulations have exceeded the growth rate of the adult U.S. population since the 1980s. Since 1970 the number of viable magazine titles has increased 200%. Magazines remain the most specialized of all the mass media in terms of audience segmentation. Nevertheless, cable TV and the Internet have begun to encroach upon magazine publishers' biggest selling point--a specialized audience. The economic health of the magazine industry is positively correlated with the overall health of the U.S. economy due to: reliance on advertising revenue to keep subscription prices low, and circulations high heavy competition among publishers of consumer magazines, most of which remain headquartered in New York City. . . . . . but not all. Meredith, headquartered in Des Moines, publishes 12 magazines including some of the nation's most successful: Better Homes & Gardens Ladies' Home Journal Family Circle The recession has been rough for magazine publishers. Paper prices have skyrocketed. Advertising has been sluggish. Magazine reading among teenagers is increasingly displaced by alternative activities including social networking sites and mobile media. Managers of supermarkets and big discount stores have became highly selective about the number of magazine titles displayed on their shelves. Magazine titles as brands Due to the tremendous competition in the magazine industry, publishers tend to manage their magazine titles as brands. A brand is a name, term, sign, or design that identifies and distinguishes a product or service from those of competitors (e.g., Time, Newsweek, U.S. News and World Report are brands of weekly news magazines). Brands have both rational and emotional elements. (Think about the reasons you favor a certain media product.) Print vs. online startups The production and distribution costs of starting a new massmarket monthly print magazine are staggering. Internet magazines are far less expensive to launch. Yahoo started Shine (targeted at women 25 to 54 years of age) as an online site with an editorial staff of only 12. Definition: A magazine is a periodical published at fixed intervals ranging from weekly to quarterly that contains a variety of articles financed by a combination of advertising and subscription. Magazines have served three important functions in our country provided a national forum for ideas that helped to promote a sense of national community following the Civil War a medium for nationwide advertising in the absence of nationally distributed newspapers early in our nation's history provided a national forum for social reform in the early 20th century Magazines have been published in America since the 1700s The first magazines in British America were published during colonial times. The audiences for early magazines were similar to the audiences for colonial newspapers. Early magazines sold at a high cost and carried little advertising. Most early American magazines were literary, political, or religious in content. Although some popular magazines emerged along with the penny newspapers in the 1830s, only 260 magazines were published in the U.S. by 1860. The Postal Act of 1879 and the subsequent magazine boom Legislative intent: To bind the nation together following the Civil War by making business conditions favorable for nationwide delivery of newspapers and magazines Accomplished by: Establishing rural free delivery and reducing secondclass postage to one penny per pound Result: By 1885, 3,300 magazines were published in the U.S. Ladies' Home Journal was the most successful massmarket magazine to emerge after the Postal Act of 1879. Its early publisher, Cyrus H. Curtis, was the first to demonstrate what became the fundamental business plan for consumer magazines: build circulation by selling copies at a low price sell advertising space on the basis of circulation The Muckrakers Muckraking was a derogatory term from The Pilgrim's Progress applied by President T. Roosevelt to the literature of exposure featured by many magazine publishers during the early years of the 20th century. The muckrakers were flaming young reformers and pioneer investigative journalists. Muckraking was aided by the rise of the 10 to 15cent magazines, especially Ladies' Home Journal, Collier's, McClure's, Cosmopolitan, Munsey's, and Everybody's. The muckraking expose was popular from around 1903 until the U.S. faced a common external enemy in World War I. Some famous muckrakers Upton Sinclair (worker exploitation and unsanitary conditions in Chicago's meatpacking industry) Burton J. Hendrick (prostitution, McClure's) Samuel Hopkins Adams (patent medicine industry, Collier's) Some legislative legacies of the muckrakers Meat Inspection Act (1906) followed Sinclair's The Jungle Pure Food and Drug Act (1907) followed Adams' "The Great American Fraud." Mann Act (1909) followed Hendrick's "Daughters of the Poor." Magazines have been major media vehicles for national advertising Magazines were the primary national medium available to advertisers prior to the emergence of radio networks around 1930. Magazines were the primary national visual medium available to advertisers from the mid 1920s until television networks diffused nationwide in the early 1950s. Some prominent 20thcentury publishers of consumer magazines before TV DeWitt and Lila Wallace (Reader's Digest, 1922) Henry Luce (Time, 1922; later Life, Sports Illustrated, People, etc.) John Johnson (Ebony, 1945; later Jet, etc.) The impact of television on the consumer magazine industry Television and generalinterest consumer magazines were functional equivalents; both were essentially entertainmentoriented media supported by advertising. TV was the cheaper advertising medium: For the same amount of money, an advertiser could reach about six times the number of television viewers as readers of a generalinterest consumer magazine. But, in the early years of TV, only three national networks served the country. Magazines were more flexible than TV networks: The magazine industry responded to competition from TV by producing specialized publications that reached specific demographic groups of advertising prospects (something TV could not do until the cable revolution decades later). Some prominent 20thcentury publishers and editors of consumer magazines after the age of TV Walter Annenberg (TV Guide, 1948) Hugh Hefner (Playboy, 1953) Helen Gurley Brown (became editor of the Hearst family's Cosmopolitan in 1965) Defining features in 2010: Magazines deliver the most specialized audience of any massmedia industry provide readers with content that is conveniently packaged provide advertisers with highquality printing and superior graphics have evolved into a flexible industry that can respond quickly to changes in social, demographic, economic, and cultural trends Six content categories of magazines Consumer magazines (e.g., People) are targeted to everybody and sold via paid subscription and single copy. Business magazines (e.g., National Hog Farmer) are designed for selected readers, often defined in terms of occupation. Custom magazines (e.g., Sony's Style) are largely designed to maintain current customers while attracting new ones. Most literary reviews and academic journals have small circulations and high subscription prices. Most newsletters also have small circulations and high subscription prices. Public relations magazines serve mostly internal and external PR functions for a sponsoring organization. Major types of business magazines Trades feature content and ads targeted to readers who buy finished products for resale (e.g., local tire and battery store). Industrial magazines emphasize content and ads targeted to readers who buy machinery or services from other companies (e.g., television licensees who contract with construction firms that specialize in the building of steel towers). Management magazines feature content and ads targeted to managers in general. Professional magazines feature content and ads targeted to members of professional societies. Structure of business magazines Vertical magazines cover an entire industry (e.g., dairy farming). Horizontal magazines cover a single function that cuts across industries (e.g., payroll). Functional magazine categories Production (editorial content and layout; manufacturing processes of printing and binding) Distribution (delivering copies to destinations) 89% of magazines are delivered to subscribers. Paid circulation (available to anybody who wishes to purchase a copy; low postal rates) Controlled circulation (specific qualifications for who may receive a copy; high postal rates) Single copies sold at retail accounts for the other 11%. 46% of singlecopy purchases are made at supermarkets; 12% specifically at WalMart. Audience feedback The Audit Bureau of Circulations (ABC) estimates consumer magazine circulations (as in the newspaper industry). Mediamark Research (MRI) measures consumer magazine readership via surveys. Business Publications Audit of Circulation International (BPA) serves a function similar to the ABC for business publications, including those with controlled circulations. The metrics of circulation vs. readership are sharply divided in the magazine industry. Advertisers in consumer magazines place more value on paid circulation than pass along readership. Advertisers in business magazines place more value on readership than circulation. Characteristics of the consumer magazine audience About 85% of adults read at least one magazine per month. Magazine readers tend to be more educated and more affluent than nonreaders. Magazine readers tend to be joiners and are more likely than nonreaders to belong to religious, professional, and scientific organizations. The typical mix of revenues at the top300 consumer magazines Advertising: 70% Subscriptions: 20% Singlecopy sales: 10% The mix varies. TV Guide derives about 47% of revenue from subscriptions, compared with Cosmo at roughly 7% from subscriptions. Expenses Costs associated with manufacturing, distribution, and circulation consume about 70 cents of each dollar earned by magazine publishers. Major items include the cost of coated paper and postage. Cyber publishing is far less costly than print, but paperless distribution of magazines has a downside. Reasons people give for not reading magazines online: online magazines are inconvenient banners and popup ads are annoying. Marketing research suggests that readers pay more attention to print versions of ads than online versions. Last fall, Disney bought Marvel (comics) for $4B. Why? Disney wants to reach the 30 million boys between ages 5 and 18 who consume billions on apparel, toys, and video games. CAREER OUTLOOK Go to www.bls.gov for current employment data! ...
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