Slow-moving train crash


Watching a slow-moving train crash: The NY Times’ David Carr reports The Atlantic will cut its advertising rate base and raise significantly its subscription price, which I (if I lived in a vacuum) would say is a logical, businesslike theory. Unfortunately, it’s a theory unlikely to work. I wish them the best of luck as The Atlantic is one of the truly great magazines published today. The problem is that the marketplace for “truly great” is not that large.

David Carey is probably correct in his assesment of his competitor’s plan:

David Carey, the publisher of The New Yorker, said of The Atlantic’s plan: “Historically, this is really a `bet the franchise’ move, and the people who have tried it before have lost. For better or worse, the modern-day publishing model is ad leveraged, not circulation leveraged, despite the efforts of some smart people to change that.” Mr. Carey has successfully raised The New Yorker’s subscription prices in recent years.

Despite advertisers’ rhetoric that they prize the quality of circulation more than the quantity, the Hall of Fame for pioneers in circulation is small and littered with corpses. In the summer of 1995, D. Claeys Bahrenburg, then the chief executive of Hearst Magazines, announced that his company would lower the rate bases for 13 of its 15 magazines while raising advertising rates at the same time. Advertisers, none too pleased to be paying more for less, revolted, and Mr. Bahrenburg was out of a job before the end of that year.

As I said, the logic and theory underpenning The Atlantic’s decision is sound. The disconnect comes from the mistaken belief that readers, even affluent, educated ones, will follow the theory if it means spending more for a subscription. Many will, but not enough to compensate for those who won’t. Even more challenging to the theory is a media planning and buying community whose DNA will never allow them to make the philosophical leap this change will require them to undertake. They won’t buy it.