Fertile Ground for Magazines

Fertile Ground for Magazines
By Eric Benderoff
Tribune staff reporter
http://www.chicagotribune.com/business/chi- 0704110766apr12,0,3666288.story?coll=chi- business-hed

Publications are pulling the plug on their print editions as they cultivate rapidly growing online revenue options

Final print copies of InfoWorld, a 29-year-old weekly computer magazine, were shipped to subscribers last week.

Death was attributed to plummeting print revenues and declining readership.

"There's no guarantee anymore that when InfoWorld landed on a desk, it would be read," explained Bob Ostrow, InfoWorld's chief executive.

At the same time, the magazine's online version is thriving. Killing off print to focus on online is a growing trend in the magazine business, as evidenced by recently folded titles such as Child and FHM. The trend is especially prominent among business-to- business publications.

"Editors and salespeople will tell you that you can't create online products fast enough to satisfy readers and advertisers," said Tony Silber, editor and publisher of Folio, a magazine for the publishing industry. "Print media used to be the key revenue source, but now it's a very subordinate piece of the pie."

Chuck Richard, a vice president and analyst with Outsell Inc., a media research firm, said online revenue growth rates for magazines "are always in the double digits. Sometimes it's in the 20 to 30 percent range and certain titles are in the 40 to 50 percent range."

The only loser for business publishers? Print, where ad revenues are "flat or negative 5 percent," Richard said. InfoWorld is a case in point.

Ad pages in the print issue had fallen 18 percent in January and 14 percent in February. Meanwhile, online readership in February grew 85 percent year- over-year, Ostrow said, and the bulk of the magazine's revenues were being generated from its online publication.

So when the print version of InfoWorld was spiked, the "market termed it as a non-event," Ostrow said. "The advertisers didn't blink."

With the move, 10 print production jobs were eliminated while the company hired a few multimedia producers to bolster the magazine's online presentation.

"We stay in front of our readers with e-mailed newsletters, a daily podcast they can subscribe to and RSS feeds," Ostrow said, referring to daily updates directly to subscribers' computers.

"We think it all works together," Ostrow said.

It's not just banner ads that draw revenues. Rather, it's the opportunity for an advertiser to sponsor an event or an e-mailed newsletter, Richard said. "It's a multilayer source for revenue."

In its 2007 forecast, Outcast said revenue for professional events, like seminars, is expected to grow 6 percent; revenue for sponsored e-mails should increase by 11 percent; sponsored Webinars, or online seminars, are expected to rise 28 percent; and even white papers, or sponsored content, is expected to grow by 38 percent.

Yet at some magazines, the shift is more of a reflection of age-old publishing concerns, where titles face stiff competition. Child, one of several similar titles published by Meredith Corp., struggled as the least popular sibling among American Baby, Parents and Family Circle.

American Baby focuses on neo-natal care and a baby's first year, while Parents covers toddlers. Each reach 2 million monthly readers. Family Circle, for parents of tweens and teenagers, reaches 4 million.

"Child was geared to upscale and working two- income families," said Art Slusark, Meredith's vice president for communications. But its content overlapped American Baby and Parents and its circulation fell from more than 1 million in 2005 to roughly 825,000.

Child's last print publication is due this summer. After that, Child's content will be available only online -- or folded into some of Meredith's other magazines.

Roughly 60 positions are being eliminated in the print magazine's closing, and Meredith is taking a $3 million charge for severance costs and another $7 million charge to write off assets for Child as it transitions into a broader online portal.

Child will be reborn in July as part of a parenting portal that will include podcasts, videos, blogs and other e- products.

"We think that is where the growth is going to be," Slusark said. "Online revenues are growing at a much faster pace than print, better than 50 percent annually in some cases."

Until the portal is launched, Meredith will use Child.com to lure readers to its other publications. For instance, when visitors go to the Web site for potty training advice, the first bit of information they see is a pop-up ad for Parents magazine.

FHM, the once highflying "lad" magazine known for photos of scantily clad celebrities, is also being reborn online. Its last print edition is still on newsstands, but it is scampering to serve online its gadget-happy 18-34 male demographic.

"We thought we'd beat the other magazines to the punch," said Scott Kritz, editor in chief. "For our demo of younger men, online is the best way to reach them. We've been seeing a lot of advertising shifting online."

FHM laid off most of its print editorial staff but has expanded its online staff, he said. "I was nervous the first two weeks after we suspended the print magazine, but not anymore. It's ramping up" Kritz said.

FHM recently hired an online ad firm, Gorilla Nation, which signed several new clients in the last week. Some advertisers, including Miller Brewing Co., remained after the transition.

Still, Kritz is conflicted about the change away from print.

"The reason I got into this field is I always loved magazines," said the former computer science and journalism student. "But that's not the way people consume information these days. Online is easy, convenient. It's right in front of you.

"For better or worse, that is the way things are going."