Private Frazer’s Doomed Magazines

September 18, 2008

Global financial meltdown and other fun stuff

Filed under: B2B magazines,consumer magazines,Recession — privatefraser @ 3:40 pm

In his Media Money blog, the always-perceptive Peter Kirwan has set out some thoughts about how the financial meltdown might affect media companies. There’ll be extra pressures on B2B advertising, luxury goods will suffer (so tougher times for Conde Nast and the glossy monthlies), less financial services advertising, increased problems for companies with debt (that’s most of you, right?), and more job losses. All good stuff as usual from wee Peter, and Private Frazer would like to chip in his two penn’orth (which is all that’s left from my HBOS shares):

  • the obvious one for B2B publishers – there are going to be fewer people to send their magazines to. Financial titles will soon have postrooms dealing with ‘gone away, return to sender’ and as the economic consequences ripple out businesses will lay off staff and close altogether. Controlled and paid circulation is bound to decline.
  • getting away with cover price and subscription price increases will be riskier. There’s less money on hand so the above-inflation increases that have occurred over the past few years aren’t going to be possible. The newspapers are trying to get away with price increases right now – we’re unlikely to have the same escape route.
  • and if advertising is suffering then magazines are going to be thinner, so even with no price increases they’ll look like poorer value.
  • another obvious one, if any of your advertising is connected with property or finance you’re going to have to deal with more blank pages
  • Bad debt will rise. It wasn’t just holidays that were lost when XL collapsed, print and online publishers were owed a fair sum. Companies in trouble – especially retail businesses – will advertise as a last throw of the dice. And ad teams – desperate to hit target – will take their IOUs. Expect some serious pain as retailers start going down.

For consumer publishers the big clear out will come from December onwards – the Christmas issue is on the stands, the January sales issue is put to bed, so put up the shutters before the desperately thin February issue needs to be commissioned. Merry Christmas everyone!

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