Future US Will Become “Primarily Digital Business”
Disappointing newsstand sales lead to “significant adverse adjustments.”
Editor’s Note: This story has been updated with a comment from Future US president John Marcom.
After reorganizing its marketing verticals to focus on its gaming division in June (and letting go five staff members), Future US is undergoing further change, transitioning to “a primarily digital business.”
According to an interim management statement from Future PLC, unsold copies returned from the newsstand during the first half of the year are resulting in “significant adverse adjustment to our forecasted sales.”
Future cites “broader challenges at retail and fewer opportunities still for consumers to buy magazines” among reasons for the disappointing numbers.
Print ad sales are down 25 percent, and the company will further delay a digital product launch planned for later this year.
John Marcom, president of Future US Inc., says that this does not mean any title closures, despite rumors that traveled the Web this weekend. In the past, Future US relied heavily on newsstand sales, allowing subscription prices to remain low. Marcom says, "We’ve typically been a very newsstand-reliant magazine company, compared to the rest of the U.S. publishing companies, and that’s a very perilous position."
Since its previous revenue model began to falter over the past few years (Marcom cites the economy and video game advertising, a big chunk of Future’s revenue stream, going to video on the Web as large influencers), Future is reassessing its strategy.
"Sales for most people [in the first half] aren’t what they thought it would be. We’re looking very closely at how we manage that, and what we plan to do in the next six months. We’ve been trying to plot the curve to not raise prices for subscribing customers, and reduce our alliances with low-cost sources that publishers have turned to in the past years, such as agencies," Marcom says.
Future plans to keep expanding digitally, "adding more verticals based on specific counsules and platforms" in the video game sector.
The company is also looking at how to integrate the success of UK’s TechRadar group into the U.S. division.
Future’s first half financial report shows US circulation revenue was down 17 percent, falling from $16.8 million in 2010’s first half to $14 million in 2011’s first half. Advertising revenue is down 15 percent, from $13.2 million in the first half of 2010 to $11.2 million in 2011’s first half.
Overall US revenue fell 7 percent, from first half 2010’s $33.5 million to first half 2011’s $31.3 million.