Charging for Content

The cover story of the February 16 issue of Time magazine is a "modest proposal" by former managing editor Walter Isaacson, on how to save newspapers. His answer, by the way, is to require subscriptions for online versions, a la Wall Street Journal, so that readers pay for good content and newspapers are not beholden to advertisers.

Ironically, Isaacson's plan is needed just as desperately in the magazine world. The Wall Street Journal reported that newsstand sales of magazines fell at their fastest rate in decades during the second half of 2008. According to figures released last week by the Audit Bureau of Circulations, "total single-copy magazine sales fell 11%." And this was on top of a 6.3% drop in the first half of the year.

Publishers are attributing the decline to all sorts of factors, predominantly the fact that people are not shopping as much so they have fewer chances to buy magazines. They also note that cover prices of magazines have risen even as publishers focus on wooing subscribers and advertisers. Advertisers are willing to pay to reach a guaranteed number of readers but it is getting tougher and tougher for publishers to guarantee that number.

As a result, have you noticed how thin your magazines are lately? According to the Publishers Information Bureau, the number of ad pages in consumer magazines fell 12% last year and were down 17% in the fourth quarter.

So we are in a viscous cycle. Advertisers won't pay the same rates to reach a smaller number of readers and magazines count on those rates to make money. And truthfully, how much longer are advertisers going to be willing to shell out big bucks for print ads anyway, especially when they might be able to reach their market more directly on the internet?

"Magazine publishers need to take a step back and rethink their circulation and honestly, rethink their whole business plan," said Brenda White, senior vice-president of media-buying agency Starcom USA. She predicts that only the strong brands will survive.

And by strong I think she means those willing to charge for content based on what they think that content is actually worth, which may be more than we're paying now. And should probably include internet as well as print access to what they have to say.

Isaacson is on to something: "Charging for content forces discipline on journalists: they must produce things people actually value." I would add that value is in the eye of the beholder. People always like it if they think they are getting more than their money's worth, which is just another way of saying, we need to raise both the bar and the ante.