This morning, Jeff Jarvis asks a question to which I have an answer. He asks (in light of the closure of Business 2.0 and House & Garden) contemplatively, “Magazines won’t die. But I wonder how many new ones will be born.”
First, the precise answer to Jeff’s question can be found on Samir Husni’s website. He actually tracks how many magazines are born each month. And, as I pointed to in a link the other day, October was a big month, and September was a bad month. So it goes.
However, the part of Jeff’s post I want to address is this:
“A launch can easily cost $40 million before break-even. Entertainment Weekly, my baby, went through $200 million before turning profitable (that wasn’t my fault!). It’s a $300-million-plus-a-year franchise now. But you can bet that it wouldn’t be launched today.”
As anyone who reads this blog knows — and as he knows — I’m a big fan of Jeff Jarvis, but when it comes to magazine publishing, his career at Time Inc. and at Conde Nast has corrupted his thinking.
The magazine format is not a business model.
The magazine format (like its close online cousin, the weblog) can plug-into a wide array of business models. Some of those business models — like the ones operated by his former employers — require revenues of over $100 million to fit within the context of a global media company. Those are the types of magazines that require $40 million before break-even.
However, the magazine format can be plugged into the business model of a non-profit organization, or a university development program, or an entrepreneur who discovers any niche audience who have a passion for a specific topic.
Jeff’s answer to his own question can actually be found in his last paragraph in which he wonders about the free magazines that are replacing the free sheets in London. That’s another business model issue. The magazine format plugs into the free, local distribution model, better than the newspaper format. The same economics work: advertising with no subscription acquisition costs and (comparatively) low distribution costs; but the shelf-life of a magazine is longer than that of a newsprint tabloid or broadsheet.
Another post for another day: How technology has driven down the costs of producing a magazine.
Bottomline: It’s not the magazine format that’s under threat. It’s the consumer, mass-appeal, mass-marketed, subscriber/newstand/advertising business model that is built on a magazine that costs $40 million before break-even that’s under threat.
(Disclosure: I’m in the business of helping such clients publish magazines. Indeed, in the past quarter, we’ve helped a client launch a magazine that has a circulation larger than Time magazine — that has nothing to do with the business model Jeff describes.)