Sunday, August 05, 2007

CIRC OBSERVER: 7 Wonders of the Circulation World

CIRC OBSERVER: 7 Wonders of the Circulation World

By Karlene Lukovitz

Even the most diehard publishing industry wonk must occasionally break down and admit that the same core constellation of issues has been besetting circulation decade after decade.

Pondering this while considering topics for this column, I happened upon an article about the Swiss adventurer who's decided to officially update the "Seven Wonders of the World" on an annual basis by polling millions of people around the globe.

Then it hit me: Isn't it about time that we officially codified the "wonders" - meaning implacable conundrums - of the magazine circulation world? While such an undertaking certainly won't resolve anything, having a primer on these enduring mysteries might shave some time off the learning curve for industry newcomers.

In that spirit, I'm volunteering my best shot at the "7 Wonders of Circulation," and inviting any and all to critique this draft, add or subtract, and generally show that you're willing to engage in the interactive community-building dynamic that we're all supposed to be integrating into our businesses. (Post your votes and comments now by clicking here!)

These 7 Wonders are posed as questions, and I've taken a stab at providing the "short answers" to each. Obviously, space doesn't permit for long, nuanced answers (and no one reads long Internet articles, in any case). They say that such provocative tactics build audience interaction, so feel free to take umbrage.

Wonder #1: Why do magazines guarantee circulation rate bases, when virtually all other media are sold on audience data?
Short answers: Because the original Commandments included an 11th that decreed "Thou Shalt Not Be Allowed to Attain Maximum Circulation Profitability." Also, when it comes to metrics, media buyers are great believers in "eating one's cake and having it, too" (see #2).

Wonder #2: Why are magazines chosen for media plans based on syndicated audience numbers, while ad buys are negotiated on rate bases/circulation statements?
Short answers: According to several influential media-buying executives recently quoted in MediaWeek, the self-reported nature of syndicated audience numbers makes them suspect for magazine buying purposes (but presumably OK for buying television, and for magazine planning purposes). Also, what would print media buyers do with their time if they weren't trolling through circulation statements to uncover "unacceptable" circulation practices. . . like choosing not to report certain sampling copies that are being distributed at no cost to the advertiser, and might generate some new subscribers (as well as deliver bonus audience exposure for advertisers)?

Wonder #3: Why don't more magazines reduce their rate bases?
Short answers: See #1. Bottom line: Media buyers say they want targeted, engaged readers, but base what they're actually willing to pay on circulation size.

Circulation Wonder #4: Why won't people pay more for magazine subscriptions?
Short answers: Because they've been under the impression for 40 years that magazine publishers are philanthropic enterprises, and they're slow to catch on that we really do want more money. Also, we can't push too hard. (See #s 1 and 3.)

Circulation Wonder #5: Why would a magazine offer numerous, different subscription prices at any given time?
Short answers: See #s 1 and 4. Also, some people apparently don't have time to go on the Internet and find those rogue (or authorized) offers for 12 issues at $7.99, and someone has to pay for these killer postal increases.

Circulation Wonder #6: Why do magazines need to replace so many subscribers each year?
Short answers: Following the same logic as in #5, we are convinced that the short-term revenue benefits of managing to get some loyal subscribers to pay more than newcomers outweigh the long-term downside of defying the principals of customer relationship-building. (Yes, competition from the Internet has exacerbated the renewals challenge, but the Internet didn't create it.)

Circulation Wonder #7: Why does it still take four to six weeks to deliver the first issue of a magazine subscription?
Short answers: Subscribers aren't willing to pay more for subscriptions (see #4), and publishers' margins are thin enough without paying more for frills like expedited fulfillment.

Circulation Wonder #8 (bonus question): Why are single-copy unit sales stagnant?
Short answers: Trick question. There are no short answers. But low subscription prices, in-store competition from a growing number of aggressive marketers in other product categories, competition from other media for consumers' time and dollars, an outmoded and counterproductive returns system, and declining literacy are good places to start.

Karlene Lukovitz is president of KL MediaLink LLC, a consultancy specializing in communications and brand extension strategies for media companies, and an independent business journalist. Her background includes serving as editor-in-chief of CM for 10 years, and in executive editorial positions for Folio: and other leading business publications covering the media industry.

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