Mag Profits Drying Up As Readers Go Online

Even if there wasn’t a recession this year, 2009 was always going to be a crunch year for B2B and consumer magazine publishers, given the pull of online media and social networking on their readers.

So how have they fared? Awkwardly, publishers’ balance sheets show us…

NatMags: The Hearst-owned Esquire publisher made a pre-tax loss of £42.8 million in 2008 — compared to a £10.8 million profit in 2007, according to newly filed documents at Companies House (via The loss is incurred due to a £55.7 million impairment charge, £51.7 million of which was written off as goodwill. Revenue down 3.5 percent at £344 million NatMags’ total circulation grew 26.6 percent due to its acquisition of the remaining half of Australian publisher ACP.

Haymarket: The privately held Mediaweek and Management Today owner saw its pre-tax profits fall from £8 million in 2007 to £4.5 in 2008, despite a revenue rise of 8.9 percent to £269 million. The company spent £7.2 million on restructuring costs and paid a hefty £1.4 million to close down Eve magazine. Haymarket laid off 50 jobs last November.

Most consumer and business publishers have unsurprisingly lost profits and revenue in last two years, against a backdrop of falling readership: the ABC figures for the first half of 2009 show that readership declined 21.5 percent — a loss of 17.4 million copies — compared to H208.

But what’s the solution? Condé Nast International chairman Jonathan Newhouse told publishers at the Fipp magazine congress this year that, “if you love your readers, they will love you” — or, if you make your print brands better, the revenue will come.

But that’s not strictly true: both readers and advertisers are becoming too promiscuous to have their attention held by monthly or weekly titles — and business subscribers are struggling to justify discretionary spend on media.

Still scared of cannibalising expensive print operations by publishing content online, mag companies either need to publish online and find a way to charge for it, or become genuine multimedia online producers. If not, they may find someone else has beaten them to it.

And here’s how other mag publishers are surviving the recession so far:

Reed Business Information: Profits fell 47 percent in H109 to £39 million.

UBM: In the first half of 2009, UBM’s profits fell by more than a quarter year on year to £48 million.

Centaur: First half profits fell by 88 percent year on year to £1.7 million.

Euromoney: The DMGT-owned publisher has said it will meet its 2008/9 profit target of £57 million for the year to 30 September.

Future: For its H109, announced in May, Future saw its profits fall 70 percent to £1.2 million.

Economist Group: For the year to March 31, operating profits were 26 percent higher year on year at £56 million.