Time Magazine Slashes Rate Base, Raises Newsstand Price (posted 11/10)
New advertising model to use sell-by-audience method.
Time magazine said late Thursday its making sweeping changes to the way it sells advertising by slashing its rate base and changing its selling model to a “sell-by-audience” plan. At the same time, the magazine, which is trying to reinvent itself as more and more readers continue to abandon the printed page for the Internet, plans raise its newsstand price by $1 to $4.95 in a seemingly contradictory move.
The country’s largest newsweekly has been struggling this year with falling newsstand sales — down 24 percent in the first half of the year — even as its overall circulation is up 1.2 percent to better than 4 million copies. Plans to raise the newsstand price by $1 come on the heels of a change that would move the magazine’s on-sale date from Monday to Friday. While the newsstand price hike takes effect next week, the other announced changes, including the on-sale date move, take effect in January.
Time will lower its rate base beginning next year from 4 million to 3.25 million, relying “to a greater extent on subscriptions that are individually paid” and other sources of subscriptions that have “proven attractive to advertisers,” the magazine said in a statement. The reduction still puts the magazine ahead of its closest competitor Newsweek, which has a circulation of about 3 million.
In its news selling model, Time will transition to an audience selling plan, similar to the way television networks sell advertising. Under the plan, advertisers will have the option of purchasing the magazine based on the new, targeted rate base or a new audience guarantee of 19.5 million readers per issue. Time will use magazine audience researcher, MRI’s new Issue Accumulation Study to support the audience guarantee. The magazine ad revenue through October of this year is down 6.8 percent to $69.4 million, from $74.5 million in 2005, while its ad pages dropped 10.4 percent to 243.9 from 272.09 in the first 10 months of 2005.
Additionally, the magazine plans to “take the lead” in developing research to measure the combined audience of its multimedia channels – the magazine says Time.com’s Internet traffic is up some 90 percent over last year’s numbers.
Time also says it will reduce the number of targeted editions from eight to three. Apart from the national magazine, the magazine will continue to print TIME Global Business, circulation of 1.5 million; TIME Select, circulation of 800,000; and quarterly TIME Style & Design, circulation of 550,000.
The changes come as Time’s parent company Time Inc., under pressure from its parent Time Warner to raise earnings, plans to sell off 18 of its magazines, including its Time4Media and parenting brands, to focus more on its core brands such as People, Fortune and Sports Illustrated.