Regional Markets Remain Strong for Magazines
Launches, acquisitions steady despite down economy.
While much of the publishing industry grits its teeth in anticipation of a recession and established 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.
“We feel like our situation is unique in that Alabama is overdue for a smart, articulate lifestyle magazine,” says Lee Hurley, managing director and co-publisher of Thicket magazine, a bi-monthly statewide lifestyle title with an initial circulation of 30,000, that debuted in January. Thicket’s April issue has 80 pages—13 of which are ad pages.
“We believe the major advertisers in this market realize the need for a vehicle that promotes the state in a sophisticated manner,” says Hurley. “We have miles to go in the revenue area but we are on the road. Our plan is for steady rather than meteoric growth.”
Over the last few years, regionals have trended toward vertical launches—business journals, home/design magazines, luxury titles—that have a more narrow audience and cover smaller geographic regions. “Regionals are going through and will continue to go through their own normal consolidation, albeit for different reasons than national titles,” says Kim Mac Leod, president of Regional Media Advisors, an M&A advisory company for the regional market.
While regional magazines may not be recession-proof, a number of new publishers in the market are optimistic that regionals are in a better cycle than their national counterparts. “If you have a strong product that people want and need then you can get through the economic cycles,” says Jonathan Weber, publisher and CEO of New West Publishing. After developing NewWest.net in 2005, Weber in February launched New West magazine, a quarterly shelter and living title covering the mountain regions of Colorado, Idaho, Montana, Utah, Wyoming, Washington and Oregon.
“We’re starting out fairly small, with the first issue at a circulation of 25,000, but we have a good circ strategy which we’re confident will get the magazine into the right hands,” Weber says. Of the 68 pages in the launch issue, Weber has 35 advertisers over about 20 ad pages.
Regional M&A Remains Strong, Too
Despite the overall economic downturn, the market has seemingly valued regional magazines well, illustrated in part by a number of significant regional acquisitions over the last several months.
In May 2007, Modern Luxury magazine sold to Clarity Partners for an estimated $250 million. In February, Niche Media purchased DLG Media Holdings, publisher of lifestyle and fashion magazine Philadelphia Style, and online publications DC Style and ACConfidential.com. Niche Media finalized an agreement last fall that effectively unified its operations with controlled circulation publishers Greenspun Media Group and the Ocean Drive Media Group.
“These are good examples of the strength of the regional market and the range of buyers out there,” Mac Leod says.
Mac Leod expects to see a number of regional titles, especially those whose markets have been impacted by the declining housing market, go to market next year. “There will be a few large deals coming out, and we anticipate that it will be a frothy market in the second half of the year,” Mc Leod says. “Also look to see even more buyers from the newspaper sector active in the regional magazine market—both acquiring and divesting depending on their own business needs.”
Some recent regional launches:
|Virginia Wine Lover||Virginia||May||Quarterly|
|New West||Western Mountain||January||Quarterly|
|Greater Lafayette Business Journal||Lafayette, La||March||Monthly|
|New Heights||Tampa, Fla.||January||Bi-monthly|
|Business New England||New England||Spring||Bi-monthly|