The rallying cry for magazine and newspaper executives is "Cut print costs, rely on the web."
It makes all the sense in the world. Printing, paper, postage, and other transportation costs keep rising. Print advertising linage keeps dropping.
So far this year, most of the major business magazines and newsweeklies have lost anywhere from 15% to over 30% of their advertising pages.
According to the latest numbers from media newsletter MIN, US News, which will cut its publishing frequency to monthly from weekly next year, has lost 31% of its ad pages. BusinessWeek and Forbes are both down about 16%.
BusinessWeek has a paid rate base of 900,000 people in the US. The magazine has to print more than that for newsstand copies and the issues that are sent free to the publication’s customers and prospects.
One of the difficulties of getting 900,000 of anything that is printed into people’s hands is that it takes a lot of time. When the last word is edited and goes out the door it has to make its way to a printing plant, through the press, onto trucks, through the postal system and to the reader’s door. It is hard to imagine that even in the best of circumstances that can be done in under 48 hours. For a lot of subscribers, it is probably closer to three or four days.
Three or four days in the financial content industry is a very long time. Some analysts call it an eternity, but that seems like an exaggeration. Better to say that it is just too long. By the time people get their copies, almost everything in the magazine has been covered in one way or another by online financial websites, including BusinessWeek.com. A lot of the best BW content is simply rewritten and put up at other websites with only modest attribution.
Because of the problems of time and space and the prevalence of the internet, it is hard to make a case for the long-term survival of the print edition of BusinessWeek. In the most optimistic way of looking at costs, let’s assume a number of $.75 a copy to print and mail one issue. That would bring the cost to $675,000 a week. And, the number could well be closer to $1 a copy. BusinessWeek pays a premium to get its magazine around to people faster than Good Housekeeping does.
BusinessWeek probably would lose very little revenue by cutting its publishing frequency to twenty-six times a year from fifty (the magazine puts out a couple of double issues). It would save $20 million or so in printing, paper, and postage. Subscribers would make it through the terms of their subscriptions more slowly. A one-year subscription would become a two-year subscription.That could be good or bad depending on how much the publication makes on its circulation.
And, BusinessWeek might lose very few of its advertising pages. So far this year, it has run 1,542 paid pages compared to Fortune’s 2,083 and Forbes’ 2,323, Being weekly obviously does not guarantee being the ad page leader.
BusinessWeek would have to drive a larger and larger portion of its readership to its website. People are getting more of their business news online as each day passes. The only question is whether they will get that at Businessweek.com or somewhere else.
Audience measurement firm Compete says BusinessWeek had a little over three million unique visitors last month. That is well below the Forbes figure of 13.7 million, but these research numbers are not very reliable. Leave it at this-BusinessWeek has a formidable audience online.
If BusinessWeek cuts its frequency, it will be making the magazine into a more feature-oriented publication. Breaking news pieces will only have a place on the website.
Whether BusinessWeek parent McGraw-Hill (MHP) will keep all of the magazine and website staff if it cuts the number of issues per year is hard to say. The temptation is almost always to cut jobs. But, that would likely undermine the quality of the website.
BusinessWeek has been a weekly since 1929. It won’t be one by the end of next year.
Next week: Value of Elevation Partners investment in Forbes.
Douglas A. McIntyre