The magazine segment represents a major chunk of the global print publishing market. Considering that more than 100,000 magazine titles are being published in the U.S. and the U.K. alone, the magazine publishing industry is huge in scale and operations. Each year the U.S. and the U.K. magazine markets sell upwards of four billion magazine copies. However, all is not well with the industry.

Declining Revenues, Increasing Costs
The magazine market, like the newspaper market, has a consumption cycle that is driven primarily by consumer and corporate spending. Consumer spending refers to subscriptions and reader base that the magazine develops, and corporate spending refers to advertisements in the magazine. Since ads are driven by readership, magazine publishers tend to:

• Price each copy of the magazine at a highly subsidized rate to encourage and increase readership
• Rely heavily on ads by corporate clients to recover costs and make profits.

The current economic conditions have certainly exposed the fragility of this business model. Consumers have cut back on their expenses, resulting in a shrinking reader base for most magazine publishers. Corporate spending too has reduced significantly--budget constraints being a major reason. 

Data compiled by the American Publishers Information Bureau in April 2009 reports a 20.2 percent decline in corporate spending compared over the same period last year. The tables below draw comparison across 12 major magazine advertising categories--these categories contribute up to 85 percent of the total advertising spending. The worst hit have been the automobile and finance, insurance and real estate categories.

The decrease in revenues, increase in costs and increasing digitization of traditional print mediums are forcing publishers to re-define their business models.

What Are Publishers Doing?
The following diagram illustrates the probable course of a magazine publisher’s operations. This helps us determine and evaluate options that a publisher has to either increase revenues or decrease costs. There are seven basic stages that a publisher is likely to undergo (in light of the current economic downturn):

1. Pre-crisis
2. Problem Identification
3. Problem Addressed
4. Solution Implementation
5. Revisiting Operations
6. Revising model
7. Consolidation.