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Behind a Consumer Enthusiast Launch



By FOLIO: Staff
09/28/2006

These days it seems as if there is an enthusiast magazine for every interest out there. Whether consumers are hopping on the latest Pilates craze or have been wine connoisseurs for years, a number of enthusiast titles are available and at their disposal. Launching an enthusiast magazine is not as easy as hopping on the bandwagon of the current trend. Publishers need to make sure they are filling a market gap rather than just copying something that already exists, or else they face a lack of interested advertisers and a subscriber list that never grows. The following profiles track four new magazines launched within the last two years.

The Knot Introduces The Nest
The popular Web site for wedding planning spins off a 400,000-circulation print magazine for newlyweds. by Linda Zebian

Capitalizing on its own internal list of subscribers allowed wedding brand The Knot to expand its online domination of the newlywed market into a 400,000-circulation magazine. The Knot Inc. launched The Nest in August 2006 as a quarterly, which is expected to increase to six times per year in 2007. The magazine targets newlyweds and is mailed to a controlled list of 400,000 recipients.

According to David Liu, CEO of The Knot Inc., the magazine launch seemed like the next best step for the company. Thenest.com, which launched in January of 2005, was a product of the growing interest in newlywed life expressed by members of the company's signature bridal Web site, Theknot.com. "It got to the point that there was so much chatter from our newlyweds on Theknot.com that our brides were saying ďľ‘get them off our message boards'," says Liu. "And six or seven months after we launched The Nest online we realized that there was an opportunity to create a print publication to support that."

Market research was low cost, consisting of the pre-existing Web audience, according to Liu. Couples use theknot.com to help plan their wedding register by providing their name, address and wedding date, so Liu and his team targeted 400,000 people he knew had recently gotten hitched. Copies of the first two issues are being mailed to that list as a complimentary gift to start, and recipients will be given the option to subscribe to the magazine to continue to receive it after the first two issues. Subscription rates have yet to be determined.

Staffing costs for the launch were also minimal, as the company utilized its existing edit, creative and advertising staff members and freelancers already working for The Knot and The Nest online. The biggest costs were printing and production.

Initially, the company reached out to traditional publishing heavyweights including Time Inc. and Conde Nast for a partnership opportunity, but decided to go it alone. A different kind of business model was needed for a magazine that would target an audience with 100 percent turnover every year. "You realize the business model for these publishers are laden with a lot of costs for marketing, lists, direct mail and more," says Liu. "We wanted to see if it was possible to leverage the fact that we have a standing relationship with over one million people who are getting married each year."

Existing advertisers are responsive to a magazine that targets couples at a time when life-long decisions are being made, according to Liu. Thirty-nine ads graced the pages of the premiere issue. At the $45,000 ratecard one-time rate, that would have generated over $1.7 million. "The more targeted you are the higher CPM you can charge," says Liu.

Direct competition for the newlywed title is nil outside of the indirect bridal group, with only general consumer publications competing for the same advertisers. Young couple-oriented publications like Martha Stewart's latest creation, Blueprint, and Redbook's latest repositioning toward younger women are indirect competitors along with general love, living and life titles that could reach out to newly married couples.

As the subscriber base builds, the magazine will convert to paid circulation. "After the second issue, we will see how many people are going to pay for the magazine and we will go back to our list to make sure we hit the rate base," says Liu. "We are avoiding sending millions of copies to newsstands where so much can be wasted and thrown out."

According to The Nest message boards, readers are buzzing over the new print version. Liu says challenges in the near future will probably include educating advertisers on the promise of the newlywed market, which has been untapped and therefore has not been allotted a budget for many potential advertisers. "From a timing standpoint I don't know if August is a great time to launch a magazine, first quarter might have been better," says Liu. "But the Nest brand isn't going anywhere."

Quince Girl Fills Need in Hispanic Niche Market
A niche magazine targets Hispanic girls celebrating their 15th birthdays. by Marrecca Fiore

When Dallas-based entrepreneur Will Cain launched Quince Girl earlier this year, he wanted to do what many magazines targeting Hispanics living in the U.S. had failed to do: Create a niche. "A lot of magazines and media companies are looking to this market, but it's still something that's very nascent," he says. "So a lot of publishers are relying on the shotgun approach of taking an English or Anglo publication like People or Sports Illustrated and targeting Hispanics with Spanish language editions. These are very successful publications, but what they left was a very big hole in the market for niche publications."

There's good reason for the absence of niche publications targeting Hispanics, says Cain. "The term Hispanic has a very loose meaning," he explains. "It's not something that's very ethnic or geographic because you can be Hispanic and be Cuban or Mexican or from many other geographic regions. But the one thing that links all of them is the Quinceanera."

The Quinceanera is a celebration of a teenager girl's 15th birthday, also considered to be her entrance into adulthood. Cain likened the Quinceanera to a wedding because it is first celebrated in a church ceremony and the girl celebrating the event has a court comprised of both males and females, similar to the groomsmen and bridesmaids of a wedding party. "It's something that spans economic spectrums," he says. "The Quinceaneras we cover range in price from $2,000 all the way up to $100,000. So there's something for everyone."

Though Cain knew he had a niche in the Quinceanera, he also new that even the best idea needs a well thought-out plan. "There's two steps you need to take before you launch a magazine," he says. "The first is coming up with a well-researched and strong idea that can really support a magazine and to find people who are so passionate about the topic that it's more than a sport or a hobby. The second is to write a business plan that will work."

After that, publishers need to raise capital and find "talented, dedicated" people to run the publication. Cain said he sought out angel, institutional, private equity and other investors for his project. Declining to give the exact cost to launch his publication, he said magazines can be launched without the millions of dollars many believe it to take. "Unless you're one of the big publishing groups, you don't need the office in New York and all of the overhead that goes with that," he says.

And entrepreneurial publishers must be resourceful, Cain says. "You have to be someone who is resourceful enough to call people over and over," he says. "You need to be someone who isn't afraid to seek advice and to help you get this product on the newsstand." Because a Quinceanera is a one-time event, Cain opted to market his publication as newsstand-only. "Since we don't have all the subscription lists of a big publishing house, the investment and time it would take to build a subscription list isn't worth it," he adds. "People get interested in it two or three years before it happens and then they lose interest."

Today, Quince Girl has a ratebase of 300,000 and generates revenue in the "high six-figures."

Stack Stacks Up
Magazine for high school athletes sheds rookie status. by Bill Mickey

Launched in early 2005, Stack magazine cofounders Nick Palazzo and Chad Zimmerman intended to leverage an opportunity they felt, through personal experience, was underrepresented in the media. Both were high school and college athletes who could have used a publication to guide them in their choices both on and off the field;a health and exercise magazine that had a lifestyle edge. In the last 18 months, the magazine has increased ratebase, launched two Web sites and is bearing down on profitability years ahead of schedule.

"Doing research, we found a void in reaching this teen boy," says Palazzo. "There are lot of publications and Web sites that target the pre-teen and tons that are 18-plus. And being so close to the market ourselves, we felt we had the editorial recipe."

Stack debuted as a controlled-circ magazine "for the athlete by the athlete" and distributed 300,000 copies directly to teen athletes within high schools. The magazine is currently distributed to about 4,000 schools. The mission was to provide teenage athletes with the necessary editorial guidance and instruction to develop their skills safely with a healthy dose of lifestyle content. "We wanted to help kids improve performance but help them off the field as well with good lifestyle choices," says Palazzo.

Palazzo and Zimmerman got the magazine off the ground by developing a business plan that won them some funding from angels and friends and family. Soon after, Cleveland-based investment firm Capitalworks backed them with several million dollars and took a majority stake.

This fall, the magazine bumped its ratebase another 50,000 to 350,000. "In terms of market response, it exceeded expectations," says Palazzo, who adds that endemic advertisers were on board from the beginning. Non-endemic advertisers are just now recognizing a fit. "Since the beginning, the footwear and sports apparel companies have been on board," he says, "but we have been able to expand into urban apparel, video games, health and beauty aids and the armed forces."

Palazzo shied away from citing specific revenue figures but says he's expecting to reach profitability in 2007. "Doing that in two years is going to be a big win," he says.
Palazzo and Zimmerman have extended the Stack brand online with two Web sites: Stackmag.com for magazine content and Mystack a site that blends, you guessed it, video and social content, a la YouTube and Facebook, for the high school athlete. "It's the crown jewel of our Internet strategy," says Palazzo. For example, members can post their sports stats and video highlight reels for college recruiters. The site has drawn 10,000 registrants so far.

Palazzo will be extending the brand further into events in spring 2007, with five to ten offering skills improvement clinics and competitions.

The magazine has a ten-time frequency that follows the school year. Palazzo used the first summer off-season to publish a custom issue for Nike's Jordan brand that went to 125,000 athletic directors and athletes who opted in for additional Stack products.

Palazzo plans to build out the custom operation and will also begin to publish a standard issue of Stack in the summer months beginning next year.

Looking back, Palazzo notes that he would have liked to launch with a larger sales staff in place, both for the print and online properties.

"For the first time, right now, we have a truly national sales staff," he says. "I think that would have done us a lot of good to have a lot of people in the marketplace telling our story. That was our number-one challenge. It wasn't that people thought it was a bad idea, it was getting in front of them to talk about it."

Diesel Power Leads The Pack
An idea met with little enthusiasm at first turns out to be
one of the fastest growing titles for Primedia's truck group. by Matt Kinsman

When Rob MacDonald joined Primedia's Truck and Home Technology Groups as vice president and group publisher from Europe two years ago, he polled his employees for new ideas. One that had been floated before by publisher Steve VonSeggem dealt with launching a truck title targeting the diesel market. "The idea hadn't exactly been shot down but not much happened with it," says MacDonald. "The diesel market in Europe is very different but I decided it was worth a punt."

Diesel Power test-launched in 2005 as a quarterly with modest distribution. "Although we occupy different parts of the truck market and cover the diesel market with other magazines, we never really realized there's such a distinct difference between the audience in the diesel sector and gasoline sector," says MacDonald. "It wasn't well-served from an advertiser point of view."

The magazine proved its worth almost immediately, beating its initial advertising goal, boasting sell-through efficiency in the mid-40 percent range and receiving a flood of positive feedback from readers. "At first we joked that it was from one of the editor's brothers," says MacDonald. "But it was obvious that the readership sector saw themselves differently from other truck guys. It almost felt like they were in a segment that never gets a voice."

Primedia jumped the frequency from quarterly to nine issues, doubled distribution, and the magazine, which started as a saddle stitch, was perfect bound by its fifth issue. Circulation is at over 50,000 and in 2006, the magazine increased its frequency to 10 issues. Diesel Power will go monthly in 2007. "It was clear from the start if we were going to do this, it wouldn't be a one-hit wonder," says MacDonald. Primedia started looking at other opportunities around it and plans to launch 8 Lug Diesel, which targets the larger diesel truck market.

Diesel Power launched two invitation-only events, Diesel Power East and Diesel Power West, that let readers compete with their trucks. "We make a small margin on the events buts they primarily serve to spread the word," says MacDonald. The magazine has developed other ancillaries including film footage for TV shows and a DVD series.

Diesel Power became profitable within its first year (the company originally thought it would be at break-even at that point) and has generated "well over" $1 million and continues to thrive, even with current gas prices. "At the time we launched it, there wasn't the need for fuel efficient vehicles," says MacDonald. "I don't think diesel will ever go away. With new clean diesel initiatives, I think we're well-placed for any changes."

The launch was executed without much market research. "We thought it would do okay but didn't think it would hit the level it's at now," says MacDonald. "It was partly gut instinct and market knowledge from our other eight titles."

While sell-through has naturally slipped as distribution expanded, MacDonald still says it is still slightly higher than the U.S. average (low to mid-30 percent) and Diesel Power is now nearly as successful as some of the older magazines in the eight-title truck group in revenue and EBITDA. "What's satisfying for me is you're forever reading about how the Internet is going to take away the market from magazines but magazines still do work if you have the right product for the right audience," MacDonald adds.

By FOLIO: Staff
09/28/2006







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