Is there a glimmer of hope for publishers in this time of reduced mail universes and increased churn?
Well, there may be a couple. One is the plan being mulled by the Audit Bureau of Circulations to waive its 50% rule.
Spelled out, that means that publishers will no longer have to collect half of the basic rate for each subscription. This will lead to the "reintroduction of the premium," said John Case, director of business development and partnership marketing for Time Inc. Consumer Marketing, speaking yesterday during a session at DMD in New York.
As a result of this plan, which will be voted on at ABC’s July board meeting, "We’re about to see more creative offers from publishers," Case added. With premiums taken into account, prices could go as low as 25% for some subs, he continued.
The bad news is that there will be "more requirements for disclosure by publishers," Case said. "You will have to disclose the average price paid." This, in turn, can hurt magazines with advertisers, especially if renewal problems develop.
But the panelists agreed that publishers and circulators need the help. Research shows that 20% of Internet users now read print magazines less than they once did, said Elissa de Brito, president of Paradysz Matera. And Case pointed out that newsstand sell-through is down to 35%, down from 38%.
In addition, many magazines have backed away from a tool they once relied on: sweepstakes offers. And with good reason.
"The Future Governors of America, otherwise known as State Attorneys General, have been going after magazines pretty hard," Case said. "We’re an easy mark."
With the collapse of American Family Enterprises, and declining response rates in general, they have also lost access to ever-popular stampsheet names.
"For years, the industry lived with agent-sold subs as a secondary [source]," said Bob Castle, senior marketing consultant for Equifax Direct Marketing Solutions, Inc. These days, they are "shrieking toward the hills that there’s not enough names."
The other solutions?
Michael Heaney, vice president-sales for Millard Group, argued that the best way to counter the list shortage is to drill down deeper in your best lists.
"Don’t miss obvious buckets like expires or address changes," he said.
Heaney also recommended "tier analysis from an ROI perspective. You might be able to mail that list with a price concession."
Subscriptions can also be sold through affinity partnerships, according to Case. Another possibility is alternative distribution. For example, This Old House magazine is now being sold at Home Depot checkout counters. "I’d like to see Golf Digest in the pro shop after I come off a round," Case said.
But in the end, the most promising solution may be the change in the ABC rules.
"Creative publishers will be able to take advantage, particularly in direct mail sales," said Gordon Grossman, president of Gordon W. Grossman, Inc. during an interview. "They can sell shorter term subs at a lower price, and if smart about it, renew and get up to a sensible price."
And the disclosure rule?
"The disclosure rule is nonsense because I never met an ad guy who can read an ABC statement," Grossman said.
