When Emap announced last December that it would shutter the U.S. version of FHM due to a perceived lack of future ad growth, it also said it would retain its Web presence, replacing companion Web site fhmus.com with fhmonline.com. "I think they’re seeing a lot of migration of ad revenue to online markets," a source close to the company told Folio: at the time. "In this sector, those ad dollars are at a premium and they’re going elsewhere."
The source said the FHM Web site has nearly double the number of users as the magazine does subscribers (1.25 million print subscribers as of June 2006, according to the publisher’s statement with the Audit Bureau of Circulations).
More consumer publishers are closing their magazines in favor of Web sites, from the teen category to men’s magazines and possibly newsweeklies next, but just how committed are they to an Internet strategy? According to a 2006 Folio: survey of consumer magazine CEOs, 77 percent of those with revenue under $10 million and 57 percent of those with revenue over $10 million expected new print advertisers to be their fastest growing revenue stream. "We folded a couple new magazines and we’re not embracing technology as fast as we could," said one executive. While some b-to-b publishers are starting to see online revenue gains exceed print losses, consumer publishers may have a steeper hill to climb.
Small Fish in a Big Pond
Part of the problem is that magazine publishers need to cope with the new experience of being a small fish in a big pond. Sites such as TeenPeople.com and ElleGirl.com post impressive traffic relative to print circulations but lag far behind other sites that cater to their audience, such as MySpace. Sports Illustrated is the dominant print sports brand and SI.com is an extremely successful Web entity, yet it is about the fifth largest sports Web site by traffic.
A recent study from The Bivings Report, called "Analyzing the Presence of Magazines on the Internet" (www.bivingsreport.com/2006/the-presence-of-magazines-on-the-Internet/), finds that some of the most popular print magazines continue to lag behind the adoption of cutting-edge features (RSS feeds, RSS feeds that include ads, tags, mobile versions, video, podcasts, reporter blogs, reporter blog comments, blogrolls, comments on articles, registration required, book marking, message boards, and RSS feeds for different sections). Only three magazines, Newsweek, Popular Science and Time, used more than half of the features the study highlighted. The largest magazine according to the study’s definition, Reader’s Digest, possessed only podcasts, message boards and RSS feeds, while 10 of the magazine sites surveyed possessed none of the features. To be fair, the study assumes that all these features are a benefit to the magazines’ audiences;one of the challenges of Web 2.0 is not falling into the trap of doing something just because you can, rather than because it makes business sense.
Taking the First Step
Last April, Hachette Filipacchi shuttered ElleGirl in favor of ElleGirl.com. In December, the publisher folded French import Shock but plans to bolster the U.S. edition of the Web site. ElleGirl.com has enjoyed a 300 percent increase in traffic with very limited marketing and is setting the tone for the rest of the publisher’s online products. "What’s happened with ElleGirl.com has made us very confident about our brands having life beyond the magazine," says vice president of digital media Marta Wohrle.
The French version of Shock is undergoing its own repositioning by shifting to weekly and becoming more news-focused, and that could influence the U.S. Web site. "We’ll have to see whether that strategy will pan out," says Wohrle. "In the next couple of months we’ll decide on what that strategy will be;do we do something like the French version or something more unique for American audiences?"
As Hachette moves to a ratio where its Web sites feature 80 percent unique online content and 20 percent print content, ElleGirl.com is starting to influence some of the more mature brands as well. In the next few months, Hachette Filipacchi will redesign the Woman’s Day site (womansday.com) with blogs written by the magazine’s "name brand" writers as the centerpiece of the home page. "A year ago, if I had suggested that, the ad department would have walked out," says Wohrle. "They would have said ﾑwe can’t sell this';now they want to sell it."
But they’ll have to adjust their expectations. In 2005, ElleGirl generated $33 million in revenue, according to PIB. "ElleGirl.com will make money this year," says Wohrle. "When you compare that to how long it takes a magazine to be profitable, especially in the teen market, we’re very happy. We’ve done five-year plans for every brand online and we think we can get 20 percent of our income from online/mobile company-wide. In terms of profitability, the proportions should be much higher, possibly 40 to 60 percent. Overall it’s going to be a smaller business but the margins overall may continue to be much, much higher."