Screen Shot 2016-03-01 at 3.45.00 PMAt the American Magazine Media Conference (AMMC) in New York in early February, Hearst Magazines President David Carey summarized the underlying mood of the conference when he said, “Who would have thought the magazine business was such a springboard to all these other media forms? We’re seeing that.”

That sentiment reflects the way the magazine industry views itself in 2016, right down to the name of the conference—which formerly was known more simply as the American Magazine Conference.

It’s not a “magazine industry” anymore, it’s an industry of powerful brands that all have a print-magazine component. The print magazine is no longer the hub of the wheel, but it remains an important point of engagement with audiences and an ad vehicle that produces resilient revenue.

At the AMMC, top magazine media executives didn’t downplay print. They just stated that print is not what their business growth is about these days. The business itself evolved from a hub-and-spoke model with the magazine in the middle to a wheel with the consumer at the hub, and the magazine just one of the spokes—but a spoke that completes the wheel.

Screen Shot 2016-03-01 at 3.30.54 PMMagazines at the Nexus

Hearst’s Carey elaborated for this story, telling Folio:, “I do believe that magazines are at the nexus of so many emerging platforms, uniquely so across the media landscape. In 2015, our U.S. magazine company was up in revenue, with gains from digital more than offsetting any declines in print. For some of our brands, the combination of digital, TV, and other extensions are now a material part of their profits. Esquire leads the pack here at Hearst, with the Esquire Network (via NBCU), Esquire.com (growing rapidly), product licensing, and more.”

At Meredith, the story is similar. Tom Harty, president of the National Media Group, says the magazine industry has always been willing to try new things to further the connection between brands and audiences. “While not everything we do is successful, experimentation and innovation have never been lacking,” he says.

Total revenue at the group, Harty says, has grown in the four years since 2012, even as reliance on print advertising has declined from 40 percent of total revenue to 35 percent, and digital has grown from 20 percent of revenue to 25 percent.

“It’s always been confounding to me that legacy media is not considered as innovative as new media,” Harty says. “For example, legacy media were among the first media to invest in mobile-first design. Several of our brands, including Parents, and Better Homes and Gardens, among others, were pioneers in this space. And in terms of licensed products, magazine media were among the first to connect the power of their brands with consumers in the retail environment. For example, both Martha Stewart and Rachael Ray have built highly successful licensed products for their brands, along with extensions including broadcast television, radio, and digital media.”

Screen Shot 2016-03-01 at 3.31.04 PMClearly, new sources of revenue are where the action is. In fact, the MPA, the New York City-based association that produces the AMMC, used to report ad pages for its members, the 250-or-so largest consumer magazines, but that’s no longer the focus. Now, audience engagement is. For decades, the Publisher’s Information Bureau (PIB) numbers of tracked ad pages and estimated rate-card revenue served as the measuring stick for the health of the industry in the aggregate and measured individual magazines against each other and against prior years.

PIB went away last year. The industry instead instituted what it calls Magazine Media 360°, which tracks user engagement as measured in print and digital circulation, mobile and web users, and video viewings. It also has a related social-media report, tracking friends, followers and the like. Together, those metrics track user engagement—which, according to the official line—is a better barometer by far than ad-page performance. And naturally, user engagement, as measured by the Magazine Media 360°, is off the charts, with magazine brands reaching a staggering (but frequently double-counted) 1.7 billion people last year. 

Pervasive Downsizing

All this comes as the media industry convulses with change. No one is really sure what business model is coming next or whether one will emerge that’s viable for the future. The newspaper industry, by many accounts, is in a state of collapse. Print is dead, say some observers, but so is digital—unless you’re a VC-backed startup, you don’t have the valuations or cash needed to buy traffic, which costs more than you can ever make back from ad sales.

News of print-industry downsizing is pervasive. Layoffs and efficiencies come often, certainly a few times in any given month. Yes, new print-magazine launches still persist, as industry legend Samir Husni faithfully reports. But new-magazine startups were a long-shot business even in the best of times. In some markets, though, such as regional luxury magazines, print remains the preferred medium.

Meanwhile, advertising sales revenue at Google and Facebook alone, at more than $90 billion, exceed ad sales revenue for the entire magazine industry. And those tech giants—which have redefined the meaning of targeted advertising—have the advantage of not having to create content. They simply sell advertising against the work of other content creators.

But is the story as bad as it seems? The overwhelming narrative for the magazine industry is that print is declining while growth in other areas isn’t robust enough to make up the loss of print (David Carey’s Hearst notwithstanding). It’s unclear whether that pattern is permanent. But what if Carey was simply stating the truth—and that what Hearst is experiencing is the norm? What if the business formerly known as the magazine industry has already turned the corner, and the shutdowns and layoffs, as painful as they are, are the consequence of innovation and change—not the desperate actions of a dying business? What if the industry is doing things now that the digital-only media players can’t, and has content creation and marketing skill sets that Google and Facebook can’t replicate?

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Data Tells the Story

It’s useful to look at the data. Clearly, print is declining overall. According to advertising intelligence firm IMS, which tracks data points across its customer base, print revenue declined from a peak of about $17.1 billion in 2007 across 2,700 titles tracked. In 2015, IMS recorded revenue of $15.8 billion across 1,647 titles tracked.

This is a story of decline, and it’s the overriding external narrative of the magazine industry.

Screen Shot 2016-03-01 at 3.31.53 PMBut it’s not the whole story. Ten years ago, according to Folio:’s annual B2B and B2C CEO surveys, print was the main revenue stream by far for magazine companies. But just ten years later in 2014, print had declined dramatically as a proportion of revenue.

Specifically, in B2B in 2004, according to Folio: data, 66.7 percent of revenue came from print advertising, and another 11.6 percent came from subscriptions. Nearly 80 percent of all revenue came from those two sources. Only 8.4 percent of revenue came from events and even less than that came from digital sources.

In 2014, the story was vastly different. For brands that exceeded $5 million in revenue, print accounted for 46.6 percent of revenue, with subscriptions another 5.2 percent, for slightly more than half of the total. Nearly 20 percent came from digital, with another 11 percent classified under data and marketing services, which is generally also digital media. Nearly 16 percent came from events.

The consumer side tells a similar story. In 2004, print advertising was 50 percent of revenue and subscriptions another 29 percent. Digital media, data and events were all low-single digits and combined were less than 10 percent of revenue. In 2014, by contrast, print advertising was down to 42 percent of revenue and paid subs down to 19 percent.

Digital advertising rose to 13 percent of total revenue. This pattern is based on distinct sets of respondents 10 years apart. But it indicates an undeniable trend at the macro level that applies in the major sectors of the industry.

Yes, association media and regional media tend to be print centric, but that is often a deliberate strategic response to the markets served. 

Consider the experience of Esteem Media, the Carlisle, Massachusetts-based publisher of New England Home and Atlanta Homes & Lifestyles. CEO Adam Japko says that for his company, print magazines remain very strong. The reason, he says, relates back to an old concept for magazines—a concept that is not present in, say, the newspaper industry, and often not in digital-only media.

Screen Shot 2016-03-01 at 3.32.07 PM“Why are these local luxury design magazines growing in ad pages and thumping when they hit the table?” he asks. “If a media brand has a following and is highly recognizable, then it’s like a club. You join to make connections.”

“Most of our advertisers are looking to reach the most important constituents in the market, which is other people in the interior design trade,” Japko adds. “So what I did with our company was say, if something helps make more connections in the trade, we will do whatever that activity is, whether live, digital or anything.”

In other words, judging from the results of companies as diverse as Hearst and Esteem Media, even print-centric companies have turned the corner, innovated, and have adapted in successful ways to changed market conditions. That is, in some ways, the under-told story of magazine media.

There’s no easy way to track this progression. The old PIB numbers are no longer public, and while the ad-page figures were largely reliable, they only covered a small portion of the magazine industry. On top of everything, PIB’s ad revenue numbers were universally seen as inflated and of little value. 

Tracking digital advertising is even harder, because pricing is based on impressions and banner advertising is usually rolled into integrated sales packages. Todd Krizelman, CEO of advertising-intelligence firm MediaRadar, estimates that only six to 10 percent of the revenue from his customer base comes from digital display advertising. In a general sense for both B2B and consumer media, most digital revenue comes from other sources, such as marketing services, native advertising, e-blasts, webinars, white papers, lead generation, and more, all of which are even harder to track. But companies like MediaRadar can track digital display advertising, which, while understating the shift, nevertheless shows a direction. The 201 MediaRadar customers who are members of the MPA—the consumer-magazine side, essentially—saw a 13 percent decline in ad pages from 2009 to 2015, from 133,850 to 111,115. But in the last three years, a similar cluster of 199 consumer-media companies has seen an increase of 48 percent in the number of online advertisers, from 27,472 in 2013 to 40,618 last year.

The B2B side saw a less striking decline but a similar pattern. In 2013, a group of 254 B2B titles tracked by MediaRadar had 77,743 ad pages, but that number declined to 72,925 by 2015, a six percent drop. However, the number of online advertisers during the same period for a similar group of 186 brands more than doubled, from 13,084 to 27,629.

And this analysis covers online display advertising—not the much broader definition of digital services that media companies sell, including Webinars and e-blasts, and also not including events.

Krizelman cautions that the macro trends don’t tell the complete story.

“I think it’s a story of have and have nots,” he says. “I worry the averages are misleading. Underneath a general decline of print are stories of real success in print. You would think weekly news would be destroyed by the iInternet. But brands like The Economist and The Week are doing really well. They’ve had a lot of success in the weekly news business while others haven’t been able to figure it out.”

Digital, Krizelman says, will fill the gap left by print for many companies, with upside still to come. “Native is just hitting B2B,” he notes. “That’s going to provide some lift. Video is just coming to B2B, and that is going to provide some lift. Folks are doing more trade shows and events than ever before. So from a revenue perspective, this all looks pretty good, to your thesis. But media executives are saying, ‘I also have a lot of cost. Digital was supposed to be much cheaper, but it is expensive.’”

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Screen Shot 2016-03-01 at 3.32.47 PMBenefits of a Shift

In the B2B space, Penton has seen a dramatic shift in source of revenue sources over the past decade. Print has gone from the largest source of revenue (73 percent) to smallest (24 percent), while digital share has grown from 11 percent to 36 percent, and events has grown from 16 percent to 40 percent. Events are now Penton’s largest revenue stream. CEO David Kieselstein says that for his company, it’s important to note that there is a multiplier effect when migrating revenue to events and digital, as the margins on these lines of business are far superior to that of print. In 2016, 52 percent of Penton’s EBITDA will tie to events, 38 percent will come from digital, and only 10 percent from print.

“The benefits of shifting our business model have actually accelerated over time, as dramatically improved profitability has enabled increased re-investment into the business,” Kieselstein says. “We spend more time focused on launching new products and less time debating migration plans for our legacy businesses.”

At the AMMC, the focus was on great content, strong journalism and innovation. As Time Inc. CEO Joe Ripp said, in a not-so-subtle shot at BuzzFeed, “People who don’t want to write listicles and want to do serious journalism are attracted to Time Inc.”

But there, and in virtually all of the interviews for this report, there was a focus on the sustainable value of print media.

Esteem Media’s Adam Japko, a veteran of B2B media, put it this way, “To me the magazine world is so far from dead. But I understand what you’re saying. We’ve never before now had this ability to create digital connections and personal connections that are as powerful as they are now. And clients can feel it. It’s visceral.”