After Newsstand Spike, Meredith Discontinues Dollar Store Distribution

After Newsstand Spike, Meredith Discontinues Dollar Store Distribution
Was licensing deal with Wal-Mart threatened?
By Dylan Stableford and Bill Mickey
http://www.foliomag.com/2008/after-newsstand-spike-meredith-discontinues-dollar-store-distribution

With newsstand sales still struggling to make any significant headway, Meredith, like most publishers, has been under pressure in recent years to find alternative sources for retail sales. And it appears one of those sources resulted in a spike in newsstand sales-and got them into trouble with Wal-Mart.

During the second half of 2007, Meredith's Better Homes and Gardens posted a 71.5 percent jump in single copy sales, according to ABC's FAS-FAX. That jump is thought to be largely attributed to selling issues at steep discounts at Dollar Tree stores, which attracted the ire of Wal-Mart and may have threatened a significant licensing deal Meredith recently struck with the big-box retailer.

While there's nothing inherently wrong with selling magazines through alternative and steeply discounted outlets such as the dollar stores, the strategy does have an impact on both the brand perception and the rest of the distribution chain. Indeed, Meredith has since discontinued its distribution into the dollar outlets when, according to sources, Wal-Mart threatened to turn the publisher's titles away from its newsstands.

"We had always planned to phase these programs out," a spokesperson for Meredith told FOLIO:. The spokesperson declined to comment on details of the specific distribution programs, such as the Dollar Tree Store, and the Wal-Mart deal, citing proprietary concerns.

Meredith's Better Homes and Gardens and Ladies Home Journal were both on the notorious Wal-Mart list of magazines scheduled to be cut from its stores. They have since been reinstated.

Other titles distributed into the dollar stores, according to sources, were Family Circle and Ladies Home Journal. All three titles are distributed by Time Warner Retail, which did not return phone calls for this story.

According to ABC's FAS-FAX report for second half 2007, single-copy sales rose 71.5 percent for BH&G, 12.7 percent for Family Circle, and 37.5 percent for Ladies Home Journal.

Controversial Circ Practice
"One, you're devaluing your product, and two, you're damaging your relationships with your major retail customers," says John Harrington, a noted industry consultant and publisher of the New Single Copy newsletter. "Plus, it could have damaged the branding agreement Meredith had [with Wal-Mart]. It's the newsstand version of verified."

The Wal-Mart branding deal, which included a range of home products based on the Better Homes & Gardens brand, was announced last October. The new line will be available this fall.

That licensing deal would look strange without the namesake magazine on the retailer's shelves.

According to a source familiar with the arrangement, the copies sold in the Dollar Tree stores were overrun copies still within their on-sale period. "I don't know if they were returnable or if it was a one-way sale, but they were probably one-way if they were only a dollar a copy," says the source.

Since the copies were still within their on-sale periods, the steep discount was a tough pill to swallow for other major retailers who sell the magazines at cover price.

Pulling the magazines from the dollar stores should, after all, not have a material impact on the publisher's overall newsstand strategy. They were sold for a dollar, after all. For Better Homes & Gardens, single-copy sales represented about 5 percent of total paid and verified circulation; for Family Circle, a more robust 23 percent; and Ladies Home Journal, about 10 percent.

Second-Half 2007 Newsstand Sales Delight and Confound

CIRCULATOR: Second-Half 2007 Newsstand Sales Delight and Confound
By Baird Davis
http://www.circman.com/viewmedia.asp?prmMID=3759
ABC's twice-annual FAS-FAX report detailing analyzed paid and non-paid circulation for just over 700 U.S. consumer magazines was released earlier this week, and the numbers tell an interesting story.

Newsstand revenues rose in the 2nd half of 2007 by 2.8 percent to nearly $1.7 billion. This, of course, is good news for the industry. However, the bad news is unit sales declined 1.8 percent, to slightly less than 472 million (this data is subject to revision when the final audit bureau data is provided later this month).

The spread between unit sales and revenue performance is one of the largest in recent years. It apparently reflects the beginnings of a strong cover price trend. Besides pricing there were also other factors that contributed to the mixed sales story in the second half of 2007.

Cover Price Effect
The estimated average industry price rose from $3.36 to $3.52 in the second half of last year. This is probably the largest average price increase in industry history. The price increases were led by Bauer, who last fall announced price increases on their nine audited titles of approximately 30 percent. However, their price increases only affected sales the last two months of the period. Even so, Bauer's aggregate revenue increased 11.3 percent on flat unit sales. It's much too early to proclaim their price increases a success, but it is an impressive start.

Bauer wasn't the only publisher pushing prices higher. The average price of titles sold at checkout increased from $2.96 to $3.14 (up 6.1 percent) and mainline titles (primarily male oriented) increased their average price from $4.67 to $4.79 (up 2.6%). But newsstand pricing is far from being fully elastic. The sales performance of Ok! (price $1.96 to $2.99, unit sales down 22 percent), TV Guide (price $2.16 to $2.66, unit sales down 26 percent), Newsweek (price $4.50 to $4.95, unit sales down 12.7 percent), and Time (price $4.22 to $4.95 unit sales down 16.5 percent) helps demonstrate the market resistance to price increases. On the other side of the coin In Touch increased price from $1.99 to $2.29 and unit sales increased 4 percent. The lesson here is that cover price increase decisions should always be approached with caution.

Impact of Wholesaler Distribution Reductions
Much has been written recently about wholesaler mandated distribution reductions. It's difficult to assess its impact from audit bureau data. But there are some indications they might be having a slightly adverse impact on unit sales-estimated to be about a half of one percentage point. If the industry efficiency level has been raised from 33 percent to 38 percent, as some wholesalers have indicated, a half point sales reduction would represent a big win for publishers, as well as wholesalers.

Celebrity Title Performance
In the second half of last year the celebrity titles continued to set the sales standard for the industry. These five titles-People, US, In Touch, Star, Life & Style and Ok! (which represent 27 percent of industry sales revenue)-experienced a unit sales decline of 3.6 percent, but revenue gained 6.4 percent. In Touch was the only one of the five publications to show both unit and revenue gains.

The Dollar Tree Phenomenon
Meredith reported in the second half of 2007 that the sales of their four leading newsstand titles-BH&G, Fitness, Ladies Home Journal and Family Circle-had a staggering combined 31 percent increase in sales revenue. This was a highly unusual sales lift for mature titles. As it turned out it appears that nearly all of the increase ($8.6 million) from these four Meredith publications can be accounted for by sales through Dollar Tree stores. But there was a backlash from major chain retailers about selling product at deeply discounted prices. Meredith in the last few days has indicated they have discontinued their Dollar Tree distributions. It seems as if Meridith's Dollar Tree sales lift will be a non repeating anomaly that can best serve as a cautionary tale concerning the risk of the selling leading titles at deeply discounted rates.

Newly Audited Publications
There were three major titles added to the auditing ranks in the second half of last year. Two published by Time, Inc.-People Stylewatch and All You (both monthly frequency). The other, Quick & Simple, is a weekly title published by Hearst. People Stylewatch and Quick & Simple reported revenue of nearly $11 million and All You a little less than $6 million. Of the three, perhaps, the sales of People Stylewatch is the most impressive. It reported average sales of 549,000 per issue. Its sales revenue exceeded those of Vanity Fair, Vogue and Good Housekeeping. It is believed to be the largest revenue achieved, at launch, by a monthly title since the super sized debut of O, the Oprah Magazine in 2000. Quick & Simple, with an average price of only $1.63, and All You (cover price $1.97) reported good sales, but the sales of these titles might be compromised in the future if the industry continues to shift away from super low cover priced products.


Mixed Messages
The mixed sales performance in the second half of 2007 mirror the complexity of the market conditions. Price, we're reminded, is a double-edged sword. It appears as if price increases will be accepted in certain circumstances, especially when increases involve titles previously priced below $2.99, but meet resistance in others. The wholesaler initiated distribution reductions are still a work in progress, but the initial results appear to be promising. Finally, we learned that the market can be self policing when it comes to selling magazines at deeply discounted prices. As always, the newsstand retains its mysterious aura to both delight and confound.

Weeklies Still Turning in Strong Circ Performance

Weeklies Still Turning in Strong Circ Performance
Audit Bureau Releases Latest Magazine Sales Figures

By Nat Ives Published: February 11, 2008 NEW YORK (AdAge.com) -- The new magazine circulation figures being released by the Audit Bureau of Circulations have as much complicated action as a three-ring circus. In the center ring, the celebrity tabloids prove that there's a lot of life left in at least certain kinds of weeklies. Everybody has raised their cover price since the last circulation numbers, but some kept newsstand sales rising anyway.

People magazine reported average paid and verified circulation of 3.6 million for the second half of last year, 3.5% under the second half of 2006. Us Weekly, from Wenner Media, reported average paid and verified circulation of 1.9 million, up 10.1% over the half the year before, and newsstand sales up 2.7%. OK also reported average circulation of 935,378, up 23.5% from second-half 2006, and a newsstand gain of 7.1%, partly on the strength of its exclusive cover story about the Jamie Lynn Spears pregnancy.

Others reported fall-offs in single-copy sales but pinned the blame on price hikes and other factors aside from the titles themselves. Newsstand faces more obstacles"Newsstand is still a very hotly contested space overall," said Paul Caine, president of Time Inc. Entertainment Group, which includes People. "Most magazines don't have to worry as much about newsstand as us. For those properties out there that are newsstand reliant, there are many more factors involved than the vitality of the title. There's gas prices, shopping, the economy -- typically not the same factors that apply to the subscription side of the business." "In the weekly category we all continue to compete in right now, there's been no sign of any fatigue by the consumer," Mr. Caine added.

"All signs are pointing to continued growth." People, Time Inc.'s crown jewel, reported average paid and verified circulation of 3.6 million for the second half of last year, 3.5% under the second half of 2006. Mr. Caine said the most recent figure would have been higher but for 4 million in sales from other People products, such as People Style Watch, People Books and People Country. His rivals at Bauer Publishing have just decided to cut its paid guarantees to 1 million from 1.2 million at In Touch Weekly and to 550,000 from 700,000 at Life & Style Weekly. Although the company signaled some embarrassment last week by burying that news in a press release titled "Bauer Publishing Moves to #1 Position in Magazine Retail Sales," it claims to be happy. "Overall we are pleased with our newsstand sales and solid sell-through," said Ian Scott, president of Bauer Advertising Sales, in the release, which also neglected to mention the departure that day of Life & Style's publisher to join Maxim as an associate publisher. "Fall-off in newsstand sales was anticipated and planned for -- any product or service which raises its prices by more than 50% will expect some attrition.

This brings our circulation to its natural level and allows us to cater to our core buyers who are willing to pay more for the product." BusinessWeek, Foreign Affairs American Media's Star, which already cut its rate base 10% to 1.35 million last July, reported average paid and verified circulation of 1.4 million across the second half, down 11.3% from second-half 2006. But celebrity weeklies aren't the only kind; BusinessWeek tacked on a modest 1.3% gain in the second half of last year, while newsstand jumped 9.3% on title's redesign. If you're overdosing on shallow celebrity news just reading this article, let us at least also inform you that Foreign Affairs is reporting average paid and verified circulation up 4.3% from the second half of the year earlier.

And there are other winners in the latest circulation report. Shelter books did well for the most part, either by expanding circulation or reducing their use of verified public-place copies, which advertisers don't always covet as much as the copies people sought out to buy. Conde Nast's Domino continued to grow, for example, adding 22.8% to its paid and verified average for a total of 677,852. And Home, part of Hachette, lost 9% partly because it achieved a 60.7% reduction in verified circulation. Sibling Metropolitan Home gave up 7.8% as it, too, cut its use of verified circulation and actually pulled out a gain on newsstands. Hearst's Good Housekeeping saw its paid and verified average slip 2.3%. We won't get numbers on Martha Stewart's Blueprint magazine, however; that recent launch got killed partly for want of high-end advertisers.

Mixed results for cooking magsThe still-young
Every Day with Rachael Ray, which had slowed its schedule of rate-base increases for a time, posted an impressive 67.4% gain in the half for an average paid and verified total of nearly 1.7 million. Some other cooking titles produced mixed results: Bon Appetit held steady with a 1.1% gain; Gourmet slipped 3.1%. The titles that Bonnier Corp. bought from Time Inc. began to show signs of improving under their new owners. Field & Stream posted a 10.2% increase in paid and verified circulation despite a 40.6% cut in the verified piece.

And Popular Science eked out a 4.1% increase in its paid and verified average while achieving a 71% reduction in verified. At Conde Nast, Vanity Fair turned around its ad sales problems last year, but now circulation is slipping: it fell 6.3% on a 12.8% decline at newsstand and a 2.7% decline in paid subscriptions and verified circulation. Newsstand suffered partly because Vanity Fair couldn't come up with a cover to sell as well as that Suri Cruise cover in October 2006. Disappointment for men's magazinesGQ, Conde's stalwart for men, fell 9.1% despite a 7.3% newsstand increase. Sibling Details was flat by all measures. Hearst's Esquire gained 1.7% while losing 6.4% on the newsstand after a price increase to $3.99 from $3.50. Men's Health, part of Rodale, is reporting average paid and verified circulation of 1,804,949 -- somehow just 28 copies apart from the 1,804,921 it reported a year prior. Best Life, a Rodale title for a slightly older crowd, chalked up a 16.8% gain. Maxim was flat at 1.9% over the second half of 2006. Business magazines kept fighting the good fight -- and a fight it is -- for their share of readers. As noted above, BusinessWeek gained 1.3%.

Fast Company and Inc., both part of Mansueto Ventures, showed flat overall results. Wired, a new member of Conde's business group that considers the business books its main competitors, posted a nice 7.7% increase. (Forbes and Fortune did not respond to requests for their circulation figures.) Flat or slight growth could have been a category of its own, arriving at titles from Elle to New York, Parenting to Real Simple (up 1.3%), and Glamour to Seventeen, both up 2.3%. Flat-to-barely-reduced circulation was an indiscriminate visitor as well, touching Cosmopolitan (down 1.5%), The New Yorker (down 0.5% as newsstand fell 9.3% on a cover-price increase), Skiing (down 1.7%), Architectural Digest (down 0.7%) and Vogue (down 0.7%).

Wholesalers and Retailers Draw the Line, and an Industry Lurches Toward Efficiency

Wholesalers and Retailers Draw the Line, and an Industry Lurches Toward Efficiency
Circulation expert says big magazines are the problem.
by Tony Silber
www.FolioMag.com
Wholesalers and retailers that attempt to increase efficiency by reducing the numbers of titles they carry, especially the smaller ones, are fighting the wrong battle, a leading newsstand expert said this week.

What's more, says Dennis Porti, executive vice president of the national distribution company Curtis Circulation, any attempt to bring the newsstand sell-through to 50 percent overnight would result in "a catastrophic loss of sales."

Porti was reacting to a flurry of news in recent weeks detailing moves by Wal-Mart [0] and other retailers to delist large numbers of magazines, and by several of the leading wholesalers to reduce by tens of millions of units the numbers of copies they distribute.

According to Mediaweek [1], Source Interlink is cutting distribution by 40 million copies over the next few months, while Anderson News Corp. and the News Group are making cuts of undisclosed numbers. Source is aiming for an overall efficiency-that is, number of copies distributed compared to number of copies sold-of 50 percent by the summer, up from the current efficiency of 38 percent. Last spring, Source cut 57 million copies.
The wholesalers said they thought the reductions could be made without any loss of sales, and some publishers and industry observers have agreed.

But Porti argues that the newsstand isn't inefficient because of the numbers of titles on the racks, he says it's because of the big magazines. "Here's the problem: 50 magazines generate nearly 70 percent of the industry's returns," he says. "The big magazines have the best positions and they have a very, very high draw per outlet. Hypothetically, if they go into a store with 100 copies, they sell 40. That's 60 returns per magazine."

Porti says the magazines themselves are in a tough spot, as are wholesalers, because many retailers may have upwards of 30 checkout racks. "If you go in with too few copies, all in the channel, including retailers, become concerned about empty wire," says Porti. "But when you fill the wire, you become inefficient."

Ultimately, he says, the industry improves efficiency if the larger-circulation magazines manage their draw better. Thankfully, Porti says, the industry has become much more sophisticated about managing draw.

And that's why the industry has picked up four to five points of efficiency in the last few years, he says. "There isn't a publisher in this business that doesn't want to operate more efficiently, and the aforementioned gains are an excellent start."

Women's Fashion Mags: We're 'Confident'

min Exclusive! Women's Fashion/Beauty March "Spring Preview" Ad Pages: Are Strong Numbers Indicative Of A Downturn Denied...Or Delayed?

In a winter of economic discontent, here is a sector with plenty of advertising content--and you can pronounce it either way. For beauty and fashion magazines, March's "Spring Preview" is second in importance to September's "Fall," and surprisingly, the numbers below look like a rerun of the March 2007 prosperity, when 16 out of the 18 magazines closed up. Here, the ratio is 15 up/5 down, with monthly records set again by Elle and Vogue (and the New York Times' women's-fashion T), and the chart shows March being the catalyst to a decent first quarter. So far, mostly good, as we enter into the heart of 2008--leading to September.

But the executives of the advertising "up" March magazines were, in boy-scout and girl-scout lingo, p-r-e-p-a-r-e-d. Perhaps none more prepared than Vogue publishing director (since January 2002) Tom Florio, whose sales team broke the March 2007 record by 20 pages. "In October, after meeting with top fashion executives in Europe, I had a strong sense that 2008 would be tough," he says. "So, I gathered my staff and we developed new work-with-the-client strategies, and we built on our existing platforms, including SHOPVOGUE.TV. Our message is that we have a powerful brand that drives consu mers to retail, and, with that, I remain confident about 2008."

So, too, does Elle senior vp/group publisher (since March 2002) Carol Smith, following a March that squeezed past 2007's record by three pages. "Being French, we're helped by the strong Euro against the dollar," she says. "And we're also helped by the affluence of our readers. In March, we are carrying the Swiss designer Akris for the first time in many years, along with new-advertisers Jean Paul Gaultier, Aerosoles, and the more mass TJ Maxx. April is also off the charts, but I am worried about the middle class disappearing."

It is a bigger worry for In Style publisher (since September 2001) Lynette Harrison, because, as would reflect a People spinoff, its 1.7 million circulation is more "mass." "The public feels the pinch, and we feel the pinch," she says, in explaining an estimated 36 ad-page drop to 285. "Advertising has started slowly because while we are getting plenty of beauty/fashion/retail, we are not getting the inserts." Gucci/Chanel are among the IS participants.

W publisher (since March 2005) Nina Lawrence got the insert--30 pages of Gucci --inFebruary (see last week's min), which partially explains the 34 ad-page drop from March 2007's record 475. Also, the loss of Gap, which is not yet running in any magazine this year.

At Harper's Bazaar, publisher Valerie Salembier, who celebrates her fifth anniversary in March, tells of new advertisers Akris/Laura Mercier/Guess/Rena Lange, and for high-society car buffs, Bentley/Lamborghini. Like Elle's Smith, Salembier all but guarantees an up April that will follow a +4.5% March, but September and November (HB's 140th-anniversary last year) will be challenging.

Might also be for Town & Country publisher (since October 1999) Jim Taylor, who will face a November issue that last year marked the 25th anniversary of Princess Grace's passing. But the March T&C was enriched by Prada/Piazza Sempione/Fratelli Rossetti/Prada and, in the HB car spirit, Mercedes, while Marie Claire publisher (since September 2004) Susan Plagemann welcomed Dolce & Gabbana/Emporio Armani/Max Mara and Salvatore Ferragamo.

At Glamour, just-promoted publishing director Bill Wackermann has Tiffany & Co. opposite cover #2 in March as symbolic of a "high-end business that continues to boom." At Cosmopolitan, publishing director (since August 1995) Donna Lagani says that fashion/retail and beauty sectors are "fun and fearless" in March with +24%/+22% differentials.

At Allure, vp/publisher (since April 2001) Nancy Berger Cardone boasts 15 new advertisers this quarter to add to the 80 who joined last year--including, in March, Baume & Mercier/Frederic Fekkai and, for liqueur fans, Hypnotiq. Self vp/publisher (since April 2004) Kim Kelleher says March is retail-driven (Dillard's/Macy's etc.), and, for "alligator buffs," carries Lacoste. Ditto Essence (JC Penney/Wal-Mart, etc.), where president (since January 2005) Michelle Ebanks says that retail is strong, but "fashion is still a battle for us."

Going against a big March 2007 was the "battle" for O publisher (since July 2000) Jill Seelig, but Calvin Klein Apparel debuted. March's ad-down "hiccup" for Redbook publisher (since July 2003) Mary Morgan was partially cured by new jewelry advertiser Silpada Designs. New Japanese facial-care advertiser Shiseido put publisher (since 2005) Sabine Feldmann in better Shape, and counterparts Lee Slattery (Fitness) and Mary Murcko (Women's Health) both reported gains in beauty.

For New York magazine publisher (since July 2003) Larry Burstein and New York Times magazine executive director/advertising (since 2001) Rich Colandrea, it remains--to resuscitate the campaign phrase--the economy, stupid!, which, in the upscale Big Apple, looks, for now, smart.

The Wal-Mart Magazine List. A Look at The Impact

The Wal-Mart Magazine List. A Look at The Impact
By John Harrington
Since mid-December, it was widely known that Wal-Mart Stores had reduced its authorized magazine title list from around 2500 to just over 1100. However, most national distributors and publishers were advised only about their own titles, and a full list did not seem to be available. This past Friday, January 18, Keith Kelly, reporter for The New York Post, wrote about the retailer's action and noted some of the titles no longer available on the chain's racks. There is no question that it is major news when the world's largest retail seller of magazines reduces, by more than 50%, the list of titles it is willing to display. However, the actual impact of the move is not likely to change in any significant degree the overall state of magazine retail sales, or even sales in Wal-Mart itself.

Although Kelly noted Wal-Mart's share of all newsstand sales at over 20%, The New Single Copy estimates the number to be in the 15% to 18% range. It may be even less. At the 2005 American Magazine Conference, Time Inc. CEO, Ann Moore, when introducing Lee Scott, Wal-Mart's CEO, said that his stores accounted for 12% of her company's sales. Not only are Time publications such as People, Real Simple, and In Style, major sellers in Wal-Mart, the company also publishes All You, distributed exclusively in the chain. Time Inc. generates more retail dollars than any other publisher, and while some others may be more dependent on Wal-Mart sales, it is hard to calculate the retailer's share being very much greater than 15%.

While the elimination of more than half the titles grabs everyone's attention, most estimates are that the remaining 1100 plus account for over 95% of Wal-Mart's magazine sales. Some think the figure may be as high as 97% or 98%. Another fact to keep in mind, is that the size of Wal-Mart's revised authorized list is not that different from a number of other supermarket chains, all major competitors of the chain. In some instances, authorized lists of 1000 to 1200 have been developed with considerable direction from major publishers and national distributors, acting in a category manager role. It is no secret that larger publishers generally contend that crowded displays depress overall sales. Of course, that opinion is not universally shared, even by all wholesalers, let alone all publishers and national distributors.

Wal-Mart's list reduction should also be seen in the context of the chain's "Sustainability" initiative, which has identified specific goals for magazines: 1, a sales increase of 5.0%; 2, improving efficiencies to 50%; and 3, achieving waste reductions throughout the channel. (See The New Single Copy 10/29/07 and 11/5/07).

Another factor to keep in mind is that no single Wal-Mart display fixture is carrying much more than 300 different titles, forget 1100, at any one time. The larger figure represents the number of titles eligible for sale throughout the chain of more than 4000 stores, located in every part of North America. Many of the titles are only likely to be available in limited geographies, or at certain times of the year.

Much was also made of what seemed to be anomalies among the titles delisted by the Wal-Mart. Many of them are magazines targeting high-end customers, luxury markets, and smaller circulation (at least on the newsstand) social and literary titles. Given Wal-Mart's solidly middle-America demographics, many such publications would not reasonably be expected to produce viable numbers.

A few of the eliminated titles cited by Kelly deserve some explanation. The Economist was one. Actually, it has not been available at the chain for more than a year. When it raised its cover price by a dollar to $5.99, Wal-Mart refused to handle it as part of its overall policy of urging suppliers to keep their prices as low as possible. The publisher, who was selling only a few copies in the chain, stood by its decision. During the first half of the year, The Economist's single copy sales were up by more than 10%. Two well known Meredith titles, Better Homes & Gardens and Ladie's Home Journal, were also cited. Many people The New Single Copy talked to thought this might be the result of Meredith selling print overrun copies of the two magazines to a bargain store chain, where they were being sold at retail for a dollar. The policy was particularly irritating to Wal-Mart, which promotes itself to customers as the home of the lowest prices.

The New Single Copy is not dismissing the actions of Wal-Mart. Nor is it challenging the work of Keith Kelly, who is widely recognized as the most thorough and professional reporter covering media today (Note: Kelly did try and reach us while preparing his article, but we were not able to connect). The fact is that Wal-Mart is deeply committed to making magazines a key factor in its presentation. The list reduction should be viewed as a single step in the chain's goals for magazines. After the first "Sustainability" conference, Wal-Mart executives David Addison and Christy Jenkins said, "The summit was the first step in a very ambitious and audacious initiative that will increase profitability...and reduce waste. Everybody stands to gain by committing to this redesign of the magazine value chain."

Shelter magazine publishers adjust to changing housing market

Shelter magazine publishers adjust to changing housing market
By Davis Kho, Special to The Chronicle
The housing market isn't the only sector that was dealt a blow by the mortgage-financing crisis of 2007.
The publishing industry's once white-hot "shelter" segment - those magazines covering home design and living - also felt the reverberations of contractions in the economy, with Condé Nast's venerable House & Garden ceasing publication after 106 years. Martha Stewart's Blueprint magazine, with its "Design Your Life" tagline, ceased production of its print edition and moved to a less-expensively produced online version.

But are the jump in foreclosures and tightening of credit markets solely to blame? A range of factors - from the inevitable shakeout of an overserved market, to the growing preference for do-it-yourself design, to rising interest in sustainable living - is affecting the market for so-called house porn, at least as much as the economic slowdown.

Michela O'Connor Abrams, president and publisher of San Francisco-based Dwell magazine, says the demise of House & Garden was a calculated move on Condé Nast's part. "Condé Nast is one of the most successful magazine publishers and magazine marketers around," she said. "This wasn't a case of financial distress."

Steve Cohn, editor in chief of the Media Industry Newsletter, which tracks the magazine business, concurs. "I'm not sure House & Garden was hurting that badly. It seemed more of a strategic than an economic decision, done to help Condé Nast's other two shelter titles, Domino and Vogue Living."

Maurie Perl, a spokeswoman for Condé Nast, says that "while House & Garden had a strong connection with its readers, it just didn't have the currency with the advertising community" for it to continue after the sudden departure in October of Publisher Joe Lagani, who left to join online media company Glam Media. Perl confirmed that House & Garden print subscribers are now receiving either Architectural Digest or Domino for the months remaining in their subscriptions, and visitors to the House & Garden Web site are being redirected to Domino.com, giving credence to the theory that this was a move intended to shore up other Condé Nast titles.

Shelter magazines really came into their own in the post-9/11 environment. Gayle Goodson Butler, editor in chief of Meredith Corp.'s Better Homes and Gardens magazine, summarizes the lure of glossy home-design magazines at a time of national insecurity: "People wanted to create comfort and order in their lives. They might not have been able to control the world outside, but they could control their own home environment."

The availability of low-cost mortgage loans over the past five or six years, which made home ownership attainable for many for the first time, also broadened the potential readership. And with housing prices on the rise, it made sense for existing homeowners to seek ideas for keeping properties in tip-top condition.

According to the National Directory of Magazines, published by Oxbridge Communications, the number of shelter magazines increased by 57 percent between 2002 and 2007, from 148 to 233 titles. Nearly half of those - 110 titles - were added from 2005 to 2006. It seemed that you could tack the word "Living" to the end of any magazine and have a viable publication, and there was no segment too small. Thus, Men's Health Living, O at Home and Lofts joined home-design stalwarts like Architectural Digest and House Beautiful (owned by the Hearst Corp., which owns The Chronicle) on the magazine rack.

But in the past year, the directory found, only 16 new shelter magazines were launched. A number of those that had been spun off from established titles, like House Beautiful Kitchens & Baths, have failed to gain traction. In this changing market, even the magazines that have stuck around are reassessing what it takes to be successful in a post-housing-bubble world.

Dwell magazine has undergone a major overhaul that will be visible in the February issue. Abrams says the redesign began well before the mortgage problems. "Sam Grawe became editor in chief a year ago, and he brought in a new creative designer, Kyle Blue. We began at that time to reimagine what Dwell could be, seven years after it was founded. We felt that in order to continue to lead the discussion about modern architecture and design, the magazine needed to be brought up to date."

One of the most obvious changes readers will notice is a slimmed-down size; starting with the February issue, Dwell has kept its height the same but changed the trim width from 9 inches to 8.375 inches. The narrower size, along with a switch to soy-based inks and recycled-content paper, saves the equivalent of 935 trees' worth of paper per issue, according to Abrams.

"These changes are completely in step with our driving philosophy that great design is sustainable design," she says; the magazine had been looking for high-quality recycled paper stock for some time, she says. Abrams confirms that the recycled paper costs more but "because we need less of it thanks to the new size, we just reinvest those savings to cover the higher cost."

A change in dimension is only the start of the story. The design team overhauled Dwell to improve its navigability and freshen the design, changing the cover design and some type fonts. Changes to the editorial content include new departments, such as Theme Attic, in which Dwell asks artists, designers and architects to interpret the issue theme, and Process, which shows readers how the things in our homes are made. Off the Grid has been updated to provide a deeper view into the systems that drive sustainable homes.

In the Modern World also has gone through a radical update. "When the magazine started in 2000, this section was supposed to be four to five pages long; over time it had expanded to 20 pages," explains Abrams. "Now it's back to its original purpose, like a newspaper of current design news tucked inside the magazine."

My House now offers the first-person perspective of the homeowner engaged in a home building project; the February issue chronicles a homeowner who overhauled an 1,100-square-foot home for $55,000 and sweat equity. The inclusion of this section speaks to another major trend affecting the industry: the democratization of design, as more homeowners feel emboldened to tackle their own projects when hiring an interior designer isn't an option.

"The idea of design in the home has been changing over the past five or six years," Abrams observed. "With stores like Ikea and Design Within Reach and Target, people are realizing that they don't have to be professionals to have an appetite for good design."

Better Homes and Gardens' Butler has also noted the shift away from professionally decorated homes to those that are in a constant state of renewal by homeowners. She joined the magazine in July 2006, and, through extensive discussions with readers and subscribers, found that their 7.6 million readers thirsted for the creative outlet that home design represented.

"The home television shows gave our readers a sense of permission for trying new ideas, and not worrying if they didn't work out perfectly," Butler says. "It gives them an expression of creativity and accomplishment" to update their homes without having to call an interior designer.

Butler and her creative team launched what she terms "a fairly significant redesign" in February 2007, in an effort to keep the traditions of the 80-plus-year-old magazine intact while making the content and design more contemporary and compelling.

"We have more balance now between wonderful homes created by homeowners across the country and do-it-yourself projects - how to pull off what you see," Butler said. The editorial content includes more step-by-step instruction, as well as a balance of project durations from short to long term.

Better Homes and Gardens readers are also looking for their "green."

In June 2007, the magazine launched a green column and introduced its Living Green Editorial Board.

For now, coverage focuses more on everyday practices that reduce environmental footprints (like performing an energy audit and comparing energy-efficient appliances) than it does on green design, but the response has been very favorable. "It taps into our reader's interest in 'how do I build on what I have, reuse what I have?' " she said.

While shelter magazines are reassessing their print publications to respond to a changing marketplace, their online versions have also come into their own in the past few years. Part of it is a chance to reach a different readership; Butler estimates that there is only a 13 to 15 percent overlap between readers of the print magazine and users of the Better Homes and Gardens Web site.

It's also true that evolving technologies allow magazine Web sites to provide content and draw in reader participation in ways that improve upon print versions.

"The BHG.com site is loaded with video," said Butler, with topics like how to organize your pantry or fold holiday napkins. Dwell's Web site includes editorial blogs, podcasts narrating walking tours of Berlin and Brooklyn, and video interviews with design mavens like Quik house architect Adam Kalkin and co-housing architect Kathryn McCamant. Both sites invite reader participation in the form of comments and ratings.
But there are certain aspects of browsing through a print publication that simply can't be replicated online.

"The photography in shelter magazines just can't be matched with what's on the Web, at least for now," Cohn said. And tearing out expensively printed pages to take with you to a paint store or show a roommate still beats showing them off on your laptop screen or computer printout.

Despite House & Garden's demise, there continues to be a market for shelter magazines aimed at professional interior designers and the clients they serve. According to real estate market intelligence firm Altos Research, the median home price in San Francisco as of December was $820,361, hardly a sign of a collapsing market.

Cohn said that "though there is a lot of worry about the economy, higher-end publications like Robb Report Luxury Homes and Architectural Digest won't be affected."

But for those publications who aim to make design more accessible and affordable for the rest of us, evolution is the name of the game.

Of Dwell's recent update, Abrams said, "We'll live with it for a couple of issues, and gather user feedback. And then we'll continue to refine and fine-tune the magazine."