June 9, 2023

Magazine Publishers Could Be Winners in the Next Era of Media

Over the past few days, I’ve been in Portugal at the FIPP World Media Congress (hence why you received this early today). I participated in a fireside chat about how picking narrower niches is the only path forward for media and that the only operators that are going to win are those that can clearly define who their target audiences are. 

Something dawned on me while I was here. Because I am so heavily focused on digital media, I don’t talk to a lot of magazine operators. But there are a lot of them. There are thousands of magazine brands here in the United States alone, not to mention all of the other publications around the world. 

But as we know, being a magazine publisher for the past fifteen years has not been one of the better occupations. Newsstand demand is down, print advertising is down, and the vast majority of the businesses are shells of their former selves. I met a number of people in the licensing department at magazines who talked about the glory days of getting seven figure minimum guarantees for international expansion. Now, they’d be lucky to get 40% of that. 

However, as I continued to dig into what these various operators were doing, I realized that with the right execution, these legacy magazines could actually be the future of media. 

Think about it… before the internet, the vast majority of media operated in niches. I write fondly about my friends over at Flying Magazine. It was founded in 1927, 67 years before the Netscape browser was released. That was a niche. I often visit the Barnes & Noble in Union Square here in New York City and I am amazed about how many individual magazines there are. 

It wasn’t until the advent of the internet that publishers started moving away from their niches. They deluded themselves into thinking that they could reach a far larger number of people and that, somehow, that would be better for their businesses. Why reach 50,000 flying enthusiasts when you could reach 250,000 people curious about flying? We now know that this is a bad approach and that it’s better to have fewer, higher-quality readers than the alternative. 

If magazines refocused on their most ardent readers, they would be able to build a thriving business. It may not carry the ego-boosting large numbers we have been used to, but the businesses themselves would be more successful. However, operators will need to make changes.

Let’s dig in…

Product monetization follows the audience

At the event, a gentleman told me about a brand he had acquired in an ultra-niche DIY market. And it had both a magazine and a forum. The magazine cost money, but the forum made no money. The struggle he has been trying to overcome is getting people to actually subscribe to the magazine. He zeroed in on it being a content problem.

The magazine is made up of “how-to” content, which is exactly what people are posting on the forum as well. Is it any wonder that no one is subscribing to the magazine when they can get all of the help from other forum members?

I explained two things to him. First, if the audience on the forum is as passionate about the DIY topic as he seemed to believe, he shouldn’t be afraid of charging for the forum in some way. People are willing to drop legitimate money on their hobbies and passions. Second, the magazine is never going to keep up on the content because the magazine is trying to be serendipitous with its how-to content and people are proactive about finding answers to their questions. 

I suspect with the current structure of the content, a magazine actually doesn’t make sense. But that’s okay because he already has a loyal audience on the forum. So, he should lean into that as the primary product. 

If you take an audience-first approach to building product and defining the business model, you’ll figure out what makes the most sense for them. For some publications, it might actually mean shutting down the magazine and leaning into the digital community. For others, the magazine is the main product. 

Stop chasing quantity; go DTC

Once you understand the business model, the next step is to recognize that the magazine subscription model has, historically, been an absolute joke. For the most part, you’re relying on other people to sell the magazine for you. And because of that, you’re giving up the majority of the revenue. 

Here’s the first racket: magazine agencies. According to an anonymous magazine publisher, the average magazine agency takes anywhere from 50-80% of the first year subscription dollar. 

So, if you’re selling your magazine for $20 a year, they’re taking anywhere from $10-$16 of that, leaving you with very little of the revenue. But you still have to carry all the costs associated with actually distributing the magazine. This isn’t a great position to be in. 

Then there’s the newsstand. When Craig Fuller bought Flying Magazine, he wrote a piece about pulling magazines from the newsstand

Distributing magazines through newsstands is a loser for publishers. To give you some context, for every issue Flying distributes through the newsstand, it generates $.11 in revenue. Yet, it costs $1.10 to print and fulfill. If issues aren’t sold at retail, the magazines are thrown away and the retailer is not out of money, but the publisher is. This seems nuts, but it’s a relic of a bygone era and was used by publishers as a subscriber acquisition strategy. With digital advertising, there are far more efficient channels to acquire subscribers. I would rather see that money go into creating a beautiful experience for our readers and one they can be proud of.

That’s pretty crappy. 

The reason that I say it’s important to go DTC is because it gives you a direct line of communication with the prospective subscriber. You have a clear understanding of whether or not you’re delivering value. If you’ve picked a good niche and people aren’t subscribing, that’s a signal. 

The reality is, magazine publishers don’t need agencies or newsstands anymore. You could argue the newsstand is good for branding, but there are better ways to get your product in front of prospective subscribers. We have paid acquisition channels that are far more effective and if you get your messaging right, the margin you’ll make on a magazine will be far greater than losing money on every printed magazine. 

Ironically, if you take this approach, you’ll see more brands express interest in advertising. Advertisers want to put their message in front of people that are willing to pay for content. Knowing exactly how many subscribers you have—and how much they paid—is a good data point to share with prospective advertisers. So, while you might see a reduction in the number of subs, your advertisers will get a better bang for their buck. 

Recognize you are an audience company

If we think about the media flywheel, the purpose of the content is to build an audience. And once you have that audience, the goal is to monetize them either directly or indirectly. It’s very straightforward. But the error that magazines have made is they get stuck on the surface with their monetization: subscriptions or ads. 

What if you could go down funnel? I’ve written about how Flying Magazine is rolling out a second-hand plane marketplace and a resort with a runway. But there are others who are trying too. 

Jens Mueffelmann, Executive Chairman of Bonnier Corporation, presented about what they were doing with the Marlin magazine brand. And it’s quite remarkable. Between 2020 and 2022, revenue for the brand is up 93%. If you dig in, you can see the standard offerings showing some growth: print media is up 19% and non-print media is up 13%. 

But the real growth is coming from its expeditions and tournaments. Marlin is all about fishing and what’s better than doing tournaments to see who can catch the largest fish? Tournament revenue is up 167% from 2020-2022 and Expeditions is up 389%. 

Marlin has an audience of die-hard fishers. They are willing to pay a ton of money for their hobby. Why shouldn’t a magazine publisher benefit from that? 

You could imagine a future where Marlin leans into the Meat Eater model and builds out an ecommerce business selling fishing gear. So long as the brand recognizes that it is in the audience business, monetization opportunities become much better. 


I’ll say this… whether we like it or not, the days of mass consumer media are behind us. But I think that’s a good thing. Media companies lost track of who their customers were. It’s not the investor; it’s not even the advertiser. You are selling a product and the product is content. The audience is the customer. Niche operators are the best positioned to serve their customers. Advertisers will follow a highly engaged audience ten times out of ten. 

To some, there’s doom and gloom in media. It’s hard to be a magazine operator in 2023. But I think if operators really understand who their audience is and build products for them, cut out all the middlemen and sell directly to the consumer, and then go down funnel with more engaging monetization, many of these niche magazines can find a place. It might not be massive, but it can be sustainable. 

I enjoyed the conference this year. It was my first time going. And it left me feeling more optimistic than pessimistic about the state of media.