Why Most Magazine Industry Metrics are Bogus

Behind the numbers...nothing.

By Henry Donahue 05/04/2009 -02:11 PM

The first quarter PIB ad page numbers painted a pretty bleak picture for the industry. The revenue numbers told an equally sorry story for all but a few publications. Among the top revenue gainers were Hallmark Magazine (up 53.5 percent in revenue) and Disney's Wondertime (8 percent).

What's that you say? Hallmark and Wondertime have both been shut down?  How could that be? It's because the PIB revenue numbers bear only a fleeting resemblance to reality.

More broadly, many magazine business metrics reported in the trade press and analyzed by media planners provide misleading views of what's really going on in the industry.

Here are three of the most prominent examples, and three modest proposals on how to fix them:

The Problem: PIB

PIB's advertising revenue numbers are notoriously inflated because they rely on rate cards. For many publishers, the real revenue per ad page can be 50 percent of the rate card after taking into account advertiser discounts, bonus pages, advertorials and remnant rates. The advertising page counts are also subject to some distortions but to a far lesser degree.

The Fix: Keep the ad page counts. Kill the ad revenue report.

The Problem: ABC

ABC's twice-yearly FAS-FAX circulation report also gets a lot of media attention when it comes out. Trade stories usually center on two themes: Which magazines grew their total circulation and which magazines missed rate base. Media planners also look at these two metrics to determine a magazine's "circulation vitality."

Unfortunately, total circulation and making rate base are two of the least informative pieces of information on a magazine's pink sheet. In both cases, publishers can directly control their numbers by paying for verified and/or public place subscriptions. From a pure economic perspective, the excessive focus on rate base can also lead to bad business decisions as publishers pay to acquire and print subscription copies that have no advertising benefit.

The Fix: Media planners-along with ABC and the trade press-should be emphasizing the trends in paid (instead of total) subscriptions and single copy sales, the two metrics that relate directly to the economic health of a title.

The Problem: Mr. Magazine

I give a lot of credit to Samir "Mr. Magazine" Husni. Anyone who bets their career so solidly on the magazine industry is a comrade of mine and anyone who reads this site. That being said, his "magazines launched this month" numbers really tell us very little about the health of the industry.

In February 2009 for example, Husni's site claims that, incredibly, 80 new magazine titles were launched, compared to approximately 50 in February 2008 and 35 in February 2007. Husni himself promotes the February numbers in his blog as proof that "print is not dead"—and he is something of a fixture in the magazine trade press.

Who could these brave magazine-launching souls possibly be? The Mr. Magazine site helpfully provides the cover of each launched title so we can do some additional analysis. Roughly 90 percent of the titles presented as "new launches" are actually newsstand special issues from medium and large publishers. Having worked at an enthusiast publisher, I can say that more newsstand one-shots are a signal that publishers are trying to stretch their investments in editorial (by repurposing old content) and newsstand distribution (by "stacking" another release onto an existing bipad).

The Fix: Mr. Magazine (or his students) should count new bipads instead of titles. A new bipad shows that a publisher is investing in a new magazine with its own distribution profile. A new magazine on an old bipad (e.g., "Taste of Home Presents: Casserole Slow Cooker & Soups") is not a "new title."

Are there other metrics that you find irksome or misleading? Comment below and I will incorporate them into a future blog post.

Henry Donahue is the CEO of Discover Media LLC, the publisher of DISCOVER magazine and discovermagazine.com. Prior to leading Discover, Henry was the Group CFO of Primedia's Lifestyles Magazine Group, a 30+ magazine division, which included the company’s Soap Opera, Crafts, Boating, Equine and History titles.