City magazines, dependent on print, face uncertain future amid wave of deals

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On my first day of work, at my first job in city magazines, Champagne was served in the lobby.

I was in the Indianapolis headquarters of Emmis Communications, home of my new employer, Indianapolis Monthly magazine. Emmis, which was predominantly a radio company, had just been named to a Best Places to Work list. But the bubbly celebration might as well have been a toast to our pillars of paper and ink. It was 2005, and city and regional magazines were fat (sometimes more than 300 pages!) with advertising. Emmis Publishing held the largest portfolio of regional titles in the country, including giants Texas Monthly and Los Angeles. Two years later, the division would post a 17-percent profit margin—almost double that of the national average for all magazines. Raises and bonuses followed.

Cheers, indeed.

I remembered those workday libations a few weeks ago when I read the news that Emmis, having already sold off Texas Monthly last October, unloaded the remainder of its out-of-town titles to Detroit-based Hour Media Group LLC. Four magazines—Atlanta, Cincinnati, Orange Coast, and Los Angeles—were moved for a combined $6.5 million. (Emmis paid $30 million for Los Angeles alone in 2000.)

The fire-sale raised the eyebrows of magazine people across the nation and not just among Emmis alums and expats like me. “Emmis has been a leader in both quality of writing and packaging and quality of design,” says John Fennell, a magazine professor at the Missouri School of Journalism who also helps run the annual City and Regional Magazine Association awards. “When you look at the awards, they have certainly led the way.”

And yet, while there is a sense of heightened awareness, if not outright trepidation, among many in the industry, there is also a sort of battle-hardened optimism—even at what’s left of Emmis. Greg Loewen, president of Emmis’s publishing division, which now consists solely of Indianapolis Monthly, maintains that the radio company was trying to rid its balance sheet of some debt, not betting city magazines are headed for oblivion. “When the economy collapsed (in 2008), so did the business,” says Loewen. “The business certainly recovered. After we hit bottom, we saw pretty consistent year-over-year revenue growth. We haven’t seen a year that looked like 2007. But things certainly did get better—the business mix looks different now.”

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Though Lowen declined to discuss the sale price of the four magazines, filings with the Securities and Exchange Commission indicate that Emmis Publishing revenues dropped by 10 percent in the nine months prior to November 2016, excluding the performance of Texas Monthly, which Emmis sold on the first of that month. The report attributes a “significant” portion of the lackluster result to Los Angeles, but regardless, the group’s bargain-basement sale price does not suggest an industry with stellar prospects.

For the most part, publishers and editors tell me that city magazine circulation—home-delivery subscriptions and newsstand sales—has remained steady. Digital editions have been slow to get off the ground. But the true bedrock of the city-mag business model, print advertising, disappeared with the economic collapse in 2008 and never came back. Between 2008 and 2009, ad-page counts dropped by a whopping 22 percent, according to a City and Regional Magazine Association survey available online; an association representative told CJR it could not provide comparative numbers since 2009 without extensive research. What data is available online is sparse and devoid of context. But anyone who has picked up one of the (quite a bit lighter) magazines lately knows hopes for a full recovery have further dimmed.

 

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The mix of revenue sources is different for each market, but many are still overwhelmingly reliant on print advertising. Ads on the print pages comprised anywhere from 75 to 90 percent of revenue at the titles I surveyed, a stat which underscores the economic unease. And digital prospects don’t look much brighter, as more niche pubs, upstart blogs, and websites try to squeeze into a fragmented advertising picture. Nicole Vogel, president of SagaCity Media, whose titles include Seattle Met, Portland, and Houstonia magazines, says that while in 2008, a local media buyer might be called upon by 30 companies, now that number is in the hundreds, maybe even a thousand. And besides local rivals, national competitors such as Facebook and Google offer sophisticated local targeting.

 

 

Whether the magazine was in Seattle, Dallas, or New England, it was suddenly fighting for every penny. “When I was coming up in this business, you had the big fish—network affiliate TV and the newspapers—and then the rest of us—radio, us, free-rack pubs, burgeoning new websites—were all guppies,” says John Palumbo, owner and publisher of Rhode Island Monthly, who also writes an industry insider column for FOLIO:. “There were certain pieces of business that you wouldn’t think the big fish would look at. Now we’re all guppies. Everything is fair game.”

Add to that the fact businesses were already slashing, if not jettisoning advertising budgets entirely, and it sent city magazines scurrying to find alternative sources of revenue. While each pub has had to adapt to its unique local market, two streams have emerged into major tributaries for titles across the country: Custom publishing and events.

Producing magazines, books, and travel guides for other companies and agencies was a natural fit. City mags already had the know-how, the production staff, and the relationships with printers and advertisers. “We started looking at our magazines as beachheads,” says Vogel. “When somebody sees something that is well put together, they think ‘I want something like that for my brand or my company.’” A particularly fruitful market has been putting out guides for city and state visitors’ bureaus and associations, which still have dollars to spend. “Our magazines are love letters to our cities,” says Vogel. “We’re good at illuminating places and what makes them special.”

Last year, half of respondents to a “How’s Business” survey, conducted by the third-party Circulation Verification Council at the behest of the City and Regional Magazine Association, reported that custom content revenue had increased from the previous year. Those that saw an increase reported an average gain of more than 25 percent.

City mags for years have been known for events, like Best of the City and Best Restaurants parties where readers are invited to sample winning goods and grub. “We did it because it was a good way to raise the flag and meet people,” says Loewen. “Now we think it needs to be profitable.” Events are a rare bright spot for revenue: More than 57 percent of magazines surveyed by the CVC reported an average 17-percent bump in event revenue in 2016, and 92 percent planned for an increase in 2017. The “How’s Business” survey did not provide any hard numbers or break out what portion of revenue magazines get from ancillary sources.

 

 

Publishers are finding that they can use a magazine’s brand to offer more value to advertisers. For instance, in Rhode Island, Palumbo says they had always held a reception for the winners of its Top Doctors special issue, a staple franchise for all city mags. But recently, they had the idea of having the party sponsored by a local Audi dealer. Two hundred physicians and other guests showed up to the dealership to drink, get their plaques and gift bags, and have their pictures taken in front of the photo wall—all while an affluent clientele was roaming the showroom of this luxury retailer. “Doctors came back to test drive cars,” says Palumbo. “They sold four cars as a direct result.”

Magazines are desperate to imagine or steal new ideas for events: Beer, wine, and whiskey festivals; 5k runs; even creating awards for designers or civic leaders—anything that appeals to the core demographic. A mature, affluent market has always been at the core of most city mags: According to a 2016 City and Regional Magazine Association readership study, 83 percent of readers are between the ages of 25 and 64, but the average reader age for many pubs is in the 40s and 50s. They’re college educated (79 percent), and their median household income is $162,000. Regional mags are having increasing success reaching younger readers on websites, through e-newsletters, and through social media—and that, too, has become a source of revenue. Between 2015 and 2016, almost 80 percent of city and regional titles reported an average of 61.8-percent gain in digital ad sales. (Again, the CVC report did not include a breakdown of print v. digital revenue.) Vogel says that each of the SagaMedia titles link to their websites through Facebook or Twitter 150 to 300 times each month, and that each post gets an average of around 250 likes, shares, or comments. “Talk to brands and say ‘Would you like everything that you post to get an average of 250 responses?’” says Vogel. “Their jaws drop.”

 

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So what about the old-fashioned paper and ink? With all these new paths of growth, with titles increasingly becoming custom pub shops and event coordinators with a URL at the bottom of the virtual business card, where does the actual magazine fit in? Is print finally dead?

Far from it, say publishers and editors. The CRMA survey found that the average net circulation of all city mags is 3.6 million, and that 76 percent of readers still have last month’s issue on the coffee table when the new one arrives. That sort of permanence is supposed to separate the subscription-based city mags from the free-rack glossies and publications that might offer lower ad rates. “The newspaper across town is trying to make everything work digitally. That’s their future. That’s not our future,” says Tim Rogers, editor of D Magazine in Dallas. “We provide a luxury product. That’s how we get subscribers. We don’t survive if the magazine doesn’t survive.”

 

We provide a luxury product. That’s how we get subscribers. We don’t survive if the magazine doesn’t survive.”

 

The physical edition is the core of the brand, and its prominence is crucial in making other ventures successful. No one is going to come to Atlanta Magazine Whiskey Festival if Atlanta loses its sheen of prestige and authority; no visitors bureau is going to want 5280, the city magazine in Denver, to put out its travel guide if the monthly issue is lacking in quality.

Another factor helping print editions remain viable is that, in the wake of the 2008 downturn, city mags have emerged as one of the few remaining authorities in key lifestyle categories like dining and shopping. Newspapers have cut back or altogether ceased retail and restaurant reviews, which are costly. And the crowd-sourced upstarts such as Yelp! and most local bloggers don’t yet have the cache of credibility that city mags have accrued over the years. “Real dining coverage takes so much money,” says Rogers. “We’ll eat there several times and write a 1,200-word review. No one else is doing that.”

That level of investment also translates to the other, less directly profitable function of the magazine—in-depth, long-form journalism. Like dining, this venture can be costly with travel, document acquisition, legal fees, and perhaps most importantly, staff writers’ and freelancers’ time to report and write. But like dining, it’s an area where many mags have found themselves alone at the finish line. “I worked in the newspaper business in a time of multipart civic journalism series about the gentrification of a certain part of the city,” says Palumbo. “That doesn’t exist anymore. They don’t have the reportorial staff, they don’t have the news hole, they’re not going to do it digitally because it’s not going to give them the clicks they so desperately need. But that doesn’t mean the appetite went away.”

Palumbo says that, both through reader surveys and personal encounters with people in the community, he hears that the longer, more informative writing about the region is still part of the reason people buy the magazine. “I feel that with the nature of longform journalism today, and the fact that we are one of the last bastions of it, as long as there’s an appetite for it, it’s going to keep the magazine alive,” he says.

 

I feel that with the nature of longform journalism today, and the fact that we are one of the last bastions of it, as long as there’s an appetite for it, it’s going to keep the magazine alive.”

 

While the actual success of such lengthy profiles and exposes is difficult to quantify, many in the industry feel those features are part of a city mag’s civic duty. Rogers says his gut—and that of his publisher—tells him his readers expect nothing less. “I have faith in readers that they want to read,” he says. “And we still do at monthly magazines what no other place can do. We present the material in a way that can beat the computer on your desk and that phone in your pocket.”

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Tony Rehagen has written for Pacific Standard, GQ, Bloomberg, and ESPN The Magazine. He is based in St. Louis and is on Twitter @trehagen.