When a business model becomes problematic, sometimes the only solution is to step outside the circle with some seriously radical thinking.
That seems to be what magazine publisher Rodale has done with its flagship media property, Prevention magazine.
As reported by Jeffrey Trachtenberg this past week in The Wall Street Journal, beginning with the July issue, Prevention will no longer accept print advertising.
It’s a major step for a publication as venerable as Prevention, in print since 1950 and an important player in the magazine segment focusing on nutrition, fitness and weight loss.
According to the Trachtenberg piece, Prevention magazine has actually seen an increase in ad pages – up over 8% to 700+ ad pages in 2015 over the year before. But here’s the rub: ad revenues were actually down because of circulation losses.
The magazine hasn’t turned a profit in a number of years, either, although other related Rodale titles have (Runner’s World and Men’s Health).
The radical surgery planned for the publication means that the number of pages of a typical magazine issue will decline dramatically. So the cost of printing and shipping will go down. In order to make up for the loss in ad revenue, the magazine’s subscription price is set to more than double to nearly $50 per year.
Price-conscious as consumers are, that action is expected to drive circulation figures down even further – from around 1.5 million to roughly 500,000 if the company’s projections are correct.
Is this an ingenious idea that will preserve and strengthen a highly regarded publication? Or a desperate action that will end up simply driving this magazine into oblivion in a novel way?
Maria Rodale, CEO of the family-owned publication company, thinks the former. As she stated to reporter Trachtenberg:
“We’re walking away from revenue but we’re also walking away from a lot of expense. Let’s serve our readers and charge them for it.”
Rodale anticipates that Prevention magazine’s operating expenses will be reduced by more than 50%.
What are the implications of that? Maria Rodale again:
“If you have to run the numbers out with an advertising model, it’s hard to see it ever getting to profitability. With a non-advertising model, it quickly becomes profitable.”
… But I’m not so sure. This radical departure from the traditional ad-supported publication model may pay short-term dividends. But will it turn out to be merely a momentary respite before the next downward slide – this time into irrelevance?
With so much information being so easily accessible online (and free of charge) – particularly in the areas of preventive health – I can easily envision fewer and fewer people wishing to shell out $50+ per year for the benefit of receiving a monthly publication that may or not contain highly relevant and valuable information each and every issue.
What do you think? Is this a silver-bullet solution? Or a zinc zeppelin?