Net closes in as glossy magazines lose their lustre

Net closes in as glossy magazines lose their lustre
http://observer.guardian.co.uk/business/story/0,,2146874,00.html


The once-thriving magazine market is in crisis as titles in almost every genre record falling sales and executives prepare to take the battle online, reports James Robinson

Sunday August 12, 2007
The Observer


For magazine executives, D-Day comes twice a year , when the publication of the biannual ABC circulation figures prompts scenes of commiseration or celebration. There are unlikely to be many champagne corks popping on Thursday, when the figures for the first six months of 2007 are unveiled.
IPC's new women's weekly Look will record impressive debut sales figures of well over 300,000, while Emap's Grazia is expected to record year-on-year rises of up to 20 per cent. They are likely to hog the headlines, but a closer look at the figures will reveal the industry picture is far from healthy.


Overall, the magazine market is unlikely to have grown and may even have shrunk - and, although a handful of titles are flourishing, nearly every mass-market category, from men's and women's lifestyle to real-life and celebrity titles, appears to be stagnating. 'We're not seeing many signs of growth in any market,' says one publisher.
Neither monthly nor weekly formats have escaped the trend and there will be some high-profile casualties among the carnage, including IPC's Loaded (down 40 per cent) and Nuts (10 per cent) and Emap's New Woman (25 per cent), according to industry sources. Other well-known brands that are likely to record double-digit year-on-year declines include titles as diverse as Emap's Heat (6 per cent), Felix Dennis's Maxim (27.7 per cent), and Closer (5 per cent), also an Emap title.

It is the second consecutive set of ABC figures to show a sluggish overall performance and, while it may not amount to an industry crisis, it is beginning to feel like a turning point. 'It could be that we've permanently seen the last big growth in consumer magazines,' predicts one industry executive.

The figures leaked to The Observer ahead of Thursday's announcement are based on newsstand sales and exclude subscription copies. Some monthly titles, which have a high proportion of subscribers, may post better-than-expected ABC figures but the sales data is usually a reliable guide to performance. The big four publishers - IPC, Emap, Conde Nast and National Magazines - are likely to respond by hailing a handful of successes while arguing that maintaining sales in a tough market is an achievement in itself. But most publishers accept that the outlook is gloomy. The figures will confirm that so-called 'lads' mags' are now in meltdown, with Loaded, FHM and Maxim recording double-digit declines on the year. Maxim and Loaded have both lost around 120,000 readers and FHM, which has lost a quarter of its circulation over the last six months, now sells 315,000, half what it once sold.

Overall, the men's market is down 23.5 per cent year on year and, more tellingly, sales have fallen by 18 per cent in the first six months of this year compared with the last half of 2006 - itself a disastrous period. Only GQ and Esquire have bucked the downward trend. IPC would happily sell Loaded, the magazine that invented the genre, but there are no buyers for a magazine in inexorable decline.

The focus is likely to shift this week from the collapse of the lads' mag to the plight of mainstream women's monthlies. Fashion titles are expected to fall year on year by 4.3 per cent, with only Vogue bucking the trend (up 2 per cent), and general lifestyle titles aimed at twenty-something women could see a 10 per cent fall. Both Red and Elle are expected to be down at least 5 per cent and Conde Nast's Glamour, the original handbag-sized glossy that was once a star performer, could be down as much as 10 per cent, which will not please MD Nicholas Coleridge. Most dramatically, Emap's New Woman has lost a quarter of its sales, partly because the company has withdrawn all marketing support, and a similar reduction in spending explains the poor performance of its rivals, according to one industry source: 'There has been a lot of unsustainable promotional activity over the last few years that is now coming to an end.'

Some of the best-performing genres of recent years are starting to lose their lustre, despite promotional pushes. The celebrity market, which provided huge growth at the turn of the millennium, is now saturated and performing badly. Although the first half of the year is traditionally slower, mainly because Big Brother does not begin until the summer, the vast majority are down on this time last year.

Closer is expected to post a fall - albeit from a market-leading high of close to 600,000 - and Heat will also be down. 'Real life', the next big growth area, is also well-served with 'me too' titles and, with the exception of IPC's Pick Me Up, they too are performing poorly. Many mass market titles have been employing classic industry tricks to bolster sales; discounting copies, advertising heavily on TV or simply giving their titles away. Closer has been advertised on TV for 14 weeks out of 26 in the first half of the year, and Heat for 10 out of 26.

Richard Desmond's OK!, meanwhile, has advertised for 18 weeks over the period, although it could see a 1 per cent year-on-year rise. Glossy monthlies snare subscribers by giving them heavily discounted rates, and the tactic is also employed by mass market titles. NatMags' Real People sells around 310,000 copies but over 90,000 are discounted, according to the last ABCs.

Woman's weekly Love It!, published by News International's magazine arm News Magazines, is likely to be stable at around 400,000, but industry sources claim that over 120,000 copies were sold at a lower rate compared with fewer than 5,000 at its rivals Chat and Pick Me Up. Love it! has been cross-promoted heavily by its parent company's tabloid titles, but News Magazines' bold plan to launch five titles within a year has not been realised. Of the two that appeared, only one remains, and the fact the Murdoch empire has failed to establish a foothold may illustrate just how competitive it has become.

Executives are blaming the internet for the downturn, and are beginning to accelerate plans to take the battle to their online competitors. 'It's all about digital now,' says one. 'This ABC period marks a sea change in how magazine companies attend to digital.' IPC has just announced the launch of www.goodtoknow.com, a portal aimed at working class women who want to swap tips on diet or health issues. IPC has already unveiled similar sites aimed at different audiences, including www.housetohome.co.uk and www.instyle.co.uk, but goodtoknow is a more general portal that does not piggyback on an existing magazine brand and is aimed at a wider audience.

The high hopes that IPC is attaching to the site may provide a clue to future projects, which could rely less on leveraging existing magazine titles and more on carving out new niches online. The other main threat to paid-for titles is likely to comes from free titles, which already give newspapers stiff competition but are now beginning to make their presence felt in the magazine market. Sport magazine is set to expand outside London this year, and another title will launch next month when former IPC executive Mike Soutar unveils ShortList, a weekly aimed at affluent men. Without a cover price, free titles have to set far higher advertising rates than their paid-for rivals, but if they can demonstrate they are pressing 500,000 copies into the right hands, they may prove viable.

The internet is partly responsible for the success of free titles because it has created an expectation among consumers that journalism should be free. Ultimately, the magazines' response to this threat will determine their future in what one source concedes is 'now a completely different media landscape'. D-Day is approaching once more, but the final day of reckoning may not be far off.

What's that in your manbag? Esquire's new look

'Smart, sexy, stylish', declares the first edition of the new-look Esquire, the original men's lifestyle title. The words refer to its cover star, Michelle Pfeiffer, but they could just as easily apply to the magazine new editor Jeremy Langmead has spent months overhauling.

The first issue, published on Thursday, came too late for this week's ABC figures, which are expected to show Esquire's circulation rose slightly to about 53,000 in the first half of the year. Before that, sales had fallen from over 100,000 a decade ago and Langmead, poached from IPC's Wallpaper earlier this year, is expected to reverse the trend.

At first glance, there is little to distinguish the 'rejuvenated' (Langmead's word) Esquire from its upmarket rivals, aside from its new smaller 'manbag' size. The coverlines - 'How to spot a gold digger', 'Football's Own Goal', 'Lethally Blond'; 'What to Wear' - are conventional, and so too is the blonde on the cover, even if she is a Hollywood star. But the front is uncluttered and clear, using just three colours (red, black and white) and there are some interesting innovations inside. A blue-tinged 'critics' section printed on heavier, more expensive paper and the business pages, complete with a pink tinge, are genuine departures.

An interview with News International chairman Les Hinton has already made headlines, and the title's roster of writers - including Jeff Randall, Andrew O'Hagan and The Observer's own Rachel Cooke, is a strong one.

And then, of course, there is the advertising - page upon glossy page of display ads for designer perfumes, clothes, cars and watches. If Langmead can produce a product that luxury brands want to be associated with, and assuming Natmags has handed him the cash to do so, he will be worth the huge salary the company is rumoured to have offered him to turn Esquire around.

The magazine is already, according to Langmead's editor's letter, 'intelligent, incisive and informed'. But is the title the best men's magazine, as well as the oldest? Not yet.