Tuesday, September 4, 2007

More about Magazines

The New York Times ran an interesting interview with George Green, the chief executive of Hearst Magazines International, which sells foreign versions of Cosmopolitan, Esquire and other Hearst publications. In the interview, Green says, "The economics are hugely different (inside the U.S. and outside). The United States is the only place where the postal service gives incentives for mailing magazines. So here, about 90 percent of magazines are sold by subscription, only 10 percent on newsstands. Outside the United States, that’s reversed. And no one overseas expects a huge discount from the cover price when they do subscribe. The business is driven entirely by ad revenue here, but elsewhere it is driven by circulation as well as ads."

In other countries, magazines are sold at newsstands, which affects the way Hearst designs its magazines and how it sells advertising in them.

According to Green, they use much heavier paper. "Since we don’t mail many magazines, we don’t have to worry about postal weight, and the heavier paper gives a higher-quality look on the newsstand. You hardly ever see newsstands in the United States anymore, but overseas you see them everywhere. The concept of a rate base — promising advertisers a certain level of readers — doesn’t exist in other countries. So you don’t have to spend a lot of money on promoting your new magazine to lots of readers. It can take more than three years for a new magazine to break even in the United States. Overseas, you can make money with your second issue"

One interesting concept of reselling/republishing U.S. magazines, content, and format to readers in other countries. Hearst doesn't just translate U.S. content into the local language. "We make the American content available, but it’s up to our partners whether to use it or not. At first they use lots of it, but over time it goes down to about 20 percent. After all, the women of Australia are not like the women of Korea, who are not like the women of France," Green said.

From a global messaging perspective, what's also interesting is that Hearst does not offer package deals, offering space in five countries for the price of four.

"We rarely bundle," Green said. "Media buyers tend to operate locally, with localized budgets. It’s rare that someone in Korea is buying ad space in Latvia."

That's important because often U.S. advertising and PR clients think it should take one budget to cover Europe. There are some pan-European publications -- the International Herald Tribune (which caters to Americans), The Economist, The Financial Times and The Wall St. Journal Europe are the main English-language exceptions. But generally, "covering" Europe requires translating messages into the local language and culture, and having people on the ground in each country. That often requires separate budgets for each country and plans customized for each country.

The full interview is available here.

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