Sustainable business models for magazines Mary Hogarth reveals - how to make publishing profitable again

Key points 1. Sustainable business models 2. 6 reasons for a business plan 3. Defining objectives 4. Revenue models are changing 5. Income stream opportunities 6. Case study 7. Future revenue models 8. Conclusion

Sustainable business models

6 reasons for a business plan 1.Focus your efforts, set objectives and company direction 2.Identify pitfalls before they happen 3.Set realistic targets which allow flexibility without compromising core objectives 4.Enable you to track your growth 5.Structure the financial side of your business 6.Raise finance.

Defining objectives Start with the goal – to build a successful title that utilizes print, online and digital in equal measure to their best advantage. Two questions will help define key objectives: Where do you see the magazine in five years time? How do you intend to get to that point? As the Chinese say... no battle plan ever survives contact with the enemy – and no business plan survives contact with reality. But you must have one, be flexible and build in as many contingency factors as you can.

Revenue models are changing Magazines can no longer rely on advertising alone Revenue comes from a variety of streams

Income stream opportunities

How this might work Advertising: There are now opportunities to sell adverts on the websites, newsletters and social media sites as well as sponsorship of social media pages or newsletters. Advertorials: Storytelling is big in advertising. For magazines this translates by turning an advert into a feature. Paywalls: It is possible to get an audience to pay for some content. However, this must have an actual or perceived value. The Financial Times achieves this with distinction. Newsletters: These have three revenue possibilities – from sponsorship, advertising and through selling the database of subscriber’s details. Sponsorship: Creating consumer demand will enable a publisher to sell sponsorship of competitions.

Case study – The New York Times While successful paywall models are still emerging The New York Times is in the lead: 2011 – the paper introduces a paywall. According to a report by Jonathan Cook in The European Magazine many readers were upset at having to pay for access after the first 20 articles it reduced the number of pay for access articles from the first 20 to the paywall was acknowledged as a “surprising success” by the Huffington Post. Cook states that recent financial reports show a circulation increase relative to the same quarter the previous year. (Cook, 2013). If subscriptions to the New York Times’ paywall continue to grow then it is logical that this could be implemented across the magazine sector. However, publishers should remember that content behind a paywall must have a perceived value.

Future revenue models 1.Owning the means of production: Magazines may seek to develop their own technology for tablets/digital devices thus further extending supply and demand 2.Print on demand: With printing being revolutionised how many consumers might prefer to print their own issue to their specification 3.Brand extensions: More diversity enabling publishers to further expand existing extensions or develop new ones.

Conclusion Magazine publishers in the future will have to: Be realistic on finances Set clear objectives Consider what their readers will want five years from now – will the magazine be able to meet those needs? Make sure their publications continue to evolve – stagnation can kill a title.

Any questions? Material based on an extract from Chpt 5, A sustainable business model from: Hogarth, M How To Launch A Magazine In This Digital Age. New York: Bloomsbury