2008 Regional Magazine Survey
Print titles flourish but the category lags on the digital side.
Spurred by a low barrier to entryâ€”including low-cost self-publishing systems and, in many cases, door-to-door distributionâ€”the city and regional magazine category continues to grow, with not just cities but even regions and small towns supporting multiple titles vying for the same readership and often the same ad dollars. Even when one title stumbles, another is there to pop up and take its place. Regional titles are even starting to develop franchise programs, as evidenced by the success of the Edibles franchise, which enables entrepreneurs to buy into a program that produces local food titles around the country in markets ranging from Boston and San Francisco to Shasta Butte. Folio:â€™s third annual City and Regional Publishing Survey finds a group that continues to flourishâ€”from large urban markets to suburbs and small townsâ€”even as competition grows rapidly and even though they are largely focused on print. However, there is increasing concern that city and regional publishers arenâ€™t doing enough to go beyond their traditional print role.
Sizing The Market
The city and regional market has enjoyed explosive growth over the last five years. The majority of city and regional publishers remain single-title publishers, with 38 percent of respondents saying they publish one magazine, down slightly from 45 percent in 2007. While 21 percent say they offer two titles (down from 23 percent in 2007), 12 percent say they publish three titles, up from 8 percent in 2007 [Table 1].
Circulation varies widely but remains small compared to mass market and even many enthusiast publications. The majority, in this case 30 percent, say their organizationâ€™s smallest title has a circulation of between 20,000 and 39,999. Given that the majority of city and regional publishers are still one-title publishers, 28 percent of respondents also said their largest title has circulation of 20,000 to 39,999. Twenty-two percent say their smallest titleâ€™s circulation is between 10,000 and 19,999 and 17 percent say itâ€™s between 40,000 and 59,999.
Paid circulation (including newsstand sales) still accounts for the majority of city and regional circulation (36 percent) while the number of â€ścontrolled, not requestedâ€ť titles (21 percent) exceeds the number of â€ścontrolled, requestedâ€ť copies (11 percent).
While print titles at large remain flat in terms of revenue growth, 53 percent of city and regional publishers say they expect their revenue to increase compared to what it was three years ago, with 26 percent saying it should be up between 10 percent and 29 percent while 11 percent say revenue will be up by 50 percent or more this year compared to 2005 [Table 4]. Fourteen percent of respondents say they expect 2008 revenue to be about the same as it was in 2005, while 11 percent say revenue will actually drop in 2008 compared to 2005, and a significant 6 percent of those respondents say it will fall by 10 percent or more.
The majority of respondents, in this case 27 percent, said they expect their 2008 revenue to fall into the $1 million to $2.9 million range [Table 5]. However, the next largest group at 11 percent say they expect their revenue to be less than $250,000 this year. Ten percent say they expect revenue to be between $3 million and $4.9 million while another 10 percent say revenue will be in the $10 million to $24.9 million range. Print will account for the majority of revenue.
But even as most city and regional publishers are focused on one title, others are turning to spin-offs and ancillary publications to grow. â€śAlmost all city and regional magazine publishers are now looking to expand,â€ť says Chris Schulz, formerly vice president and publisher at Freedom Specialty Media, which publishes Coast and other titles. â€śWith the core product, your growth is going to slow. Your only chance to grow is to provide new products. In the old days, that could be as simple as a special sectionâ€”if that was successful, you could spin it off into its own publication. The challenge is with how to staff it and sell it. If itâ€™s a publication with annual or quarterly frequency, you canâ€™t afford a separate staffâ€”the economics donâ€™t add up. You end up having the same staff stretched a little thinner and that pressures all aspects of the businessâ€”editorial, advertising, circulation, etc.â€ť
The majority of city and regional spin-offs remain focused on the Shelter category [Table 6]. Thirteen percent of respondents were focused on Tourism/Travel, while 11 percent produced spin-offs for Arts/Entertainment (Renaissance Publishing launched a magazine called On Stage, which covers performing arts in the New Orleans area). Berkshire Living has launched two spin-off titles in BBQ: Berkshire Business Quarterly and Berkshire Home & Garden. â€śWeâ€™re selling an idea that youâ€™re buying a demographic with Berkshire Living and you can achieve that through multiple levels of platforms,â€ť says publisher Michael Zivyak.
Just 6 percent of respondents say theyâ€™ve launched spin-offs focused on business for the local market, while 5 percent say they offer spin-offs for the bridal market.
Startup Investment Remains Low
City and regional publishers are often launching products on the cheap by leveraging existing staff and limiting frequency. Seven percent of respondents say they dedicated between $50,000 and $99,999 to their launch, while another 7 percent say they spent less than $10,000 on their launch [Table 7]. However, 6 percent say they put between $100,000 and $249,999 toward their launch, while 3 percent spent a whopping $1 million or more on a launch.
Larger publishers are more likely to launch a spin-off [Table 9]. Forty-eight percent of city and regional publishers with annual revenue of more than $5 million say they have launched a spin-off, while 74 percent of respondents that generate less than $5 million in annual revenue say they have not launched a spin-off.
Most spin-offs seem to get off to a slow start. Twenty-percent of respondents say their spin-off generates between $50,000 and $99,999 in revenue while 18 percent say spin-offs net them between $100,000 and $249,000 [Table 10]. The small numbers reflect the large number of one-off ancillaries the city and regional market produces (7 percent say their spin-off generates less than $25,000).
However, 10 percent say their spin-off generates $1 million or more, while 7 percent say they see between $500,000 and $749,999 from spin-offs and 5 percent say they see between $750,000 and $999,999.
Competition continues to grow rapidly. While 21 percent of respondents say they saw no competitors enter their market within the last five years, 24 percent say they have seen between three and five competitors emerge, 20 percent have seen two, 21 percent have seen 1 and 10 percent have seen six or more [Table 8].
Digital Revenue Lags
City and regional publishers remain solidly print-driven, and there seems to be little disparity between both larger publishers and smaller publishers when it comes to sources of revenue (compared to the broader consumer publishing market, where larger publishers are far outstripping smaller publishers when it comes to online revenue growth). Print accounts for 86.6 percent of revenue on average for publishers with less than $5 million in annual revenue, and 79.1 percent for publishers with more than $5 million in revenue [Table 11].
City and regional publishers trail the broader publishing market when it comes to embracing digital and events. Events account for just 2.8 percent of revenue for larger publishers (and 2.6 percent for smaller publishers) while e-media accounts for 2.7 percent of total revenue for larger publishers and just 1.3 percent of smaller publishers. DLG Media, former publisher of Philadelphia Style, was a leader in e-media among regional titles, before selling to Niche Media in February. Now Philadelphia Style has been repositioned as a regional luxe title, boasting a 62 percent increase in ad sales for the May/June relaunch but Web initiatives are again secondary.
The survey sample of 906 was selected from Folio: subscribers who classified their companyâ€™s primary focus as city/regional publishing. Readex Research collected data from February 28 to April 10, 2007. The survey closed for tabulation with 246 usable responsesâ€”a 33% response rate. The margin of error is Â±5.3% at the 95% confidence level.