Making the Case For Recession-Proof City and Regional Titles
Despite an advertising downturn, the regional market continues to expand.
While much of the publishing industry grits its teeth in anticipation of a recession and national publishers reign in their print launches, the city and regional market remains hot, thanks to a low barrier to entry and a continued demand for print. The first quarter of 2008 alone has seen a flurry of regional magazine launches.
‚ÄúLocal, local, local‚ÄĒthat‚Äôs the key,‚ÄĚ says Dan Shannon, publisher of Chapel Hill magazine and Durham, a bi-monthly title with 20,000 circulation set to launch this spring. ‚ÄúEveryone identifies with their own city or town and embraces the media that recognize that fact.‚ÄĚ
Over the last few years, regionals have trended toward vertical launches‚ÄĒbusiness journals, home/design magazines, luxury titles‚ÄĒthat have a more narrow audience and cover smaller geographic regions. ‚ÄúRegionals are going through and will continue to go through their own normal consolidation, albeit for different reasons than national titles,‚ÄĚ says Kim Mac Leod, president of Regional Media Advisors, an M&A advisory company for the regional market.
‚ÄúWhen the economy tightens, as it is doing now, ad dollars become even more focused,‚ÄĚ says Randy Thompson, co-publisher of Virginia Wine Lover. The quarterly magazine, with an initial circulation of 80,000, was set to launch May 1 with 84 pages‚ÄĒabout 30 of which are ad pages. ‚ÄúRegional and niche publications can capitalize on that.‚ÄĚ
Regionals: An Optimistic Market
While regional magazines may not be recession-proof, a number of new publishers are optimistic that regionals are in a better cycle than their national counterparts. ‚ÄúIf you have a strong product that people want and need then you can get through the economic cycles,‚ÄĚ says Jonathan Weber, publisher and CEO of New West Publishing. After developing NewWest.net in 2005, Weber in February launched New West, a quarterly business and consumer magazine focused on growth and development in the mountain regions of Colorado, Idaho, Montana, Utah, Wyoming, Washington and Oregon.
‚ÄúWe‚Äôre starting out fairly small, with the first issue at a circulation of 25,000, but we have a good circ strategy which we‚Äôre confident will get the magazine into the right hands,‚ÄĚ Weber says. Of the 68 pages in the launch issue, Weber has 35 advertisers over about 20 ad pages.
New publishers are finding also that there‚Äôs a lower barrier to entry in the regional market. ‚ÄúWe feel like our situation is unique in that Alabama is overdue for a smart, articulate lifestyle magazine,‚ÄĚ says Lee Hurley, co-publisher of Thicket, a bi-monthly lifestyle title with an initial 30,000 circulation, that launched in January.
M&A Remains Strong, Too
Despite the overall economic downturn, the market has seemingly valued regional magazines well. In May 2007, Modern Luxury sold to Clarity Partners for an estimated $250 million. In February 2008, Niche Media purchased DLG Media Holdings, publisher of lifestyle and fashion magazine Philadelphia Style.
According to Chris Shannon, managing director at Berkery Noyes, national media companies will launch more regional products and more mid-size companies will to look to own ‚Äúfamilies‚ÄĚ of regional titles. Mac Leod expects to see a number of regional titles, especially those that have been impacted by the declining housing market, put up for sale over the next year.
‚ÄúWe anticipate that it will be a frothy market in the second half of the year,‚ÄĚ Mac Leod says. ‚ÄúAlso look to see even more buyers and sellers from the newspaper sector active in the regional magazine market.‚ÄĚ