7 Lessons from Publishers Who’ve Diversified Their Revenue Streams

Table of Contents

• A Year of Innovation
• Meredith Corp. Expands into Retail Sales, Videos and TV
• New York Times Tries Acquisitions and Events
• Motor Trend Launches Premium Streaming Video on Demand Subscriptions
• The Guardian Offers Sponsored Content and New Membership Opportunities
• Men’s Health Launches a Quarterly Subscription Box
• Become a Vogue Insider with an Annual VIP Membership
• Southern Living Opens Branded Retail Store in Myrtle Beach
• Nonprofit News Site VTDigger Adds Podcasting to its Repertoire
• Richland Source Releases Live Album, “Newsroom After Hours”
• Forbes Diversifies Revenue with New Book Imprint, ForbesBooks
• Insider Take

A Year of Innovation

This year was a year of innovation for newspaper and magazine publishers as they try to successfully bridge the divide between declining print sales and ad revenue and the digital publishing landscape. While print is still important, its role is declining, as evidenced by these recent newspaper and magazine statistics.

According to Pew Research Center’s “State of the News Media 2016” report, 2015 was a recession year for newspapers as circulation and revenue continued to decline.

• Weekday circulation fell 7 percent, the biggest decline since 2010 (print circulation dropped 9 percent, while digital circulation grew 2 percent)
• Sunday circulation fell 4 percent, also the biggest decline since 2010 (print circulation dropped 5 percent, while digital rose 4 percent)
• Advertising revenue dropped nearly 8 percent, its biggest drop since 2009
• Digital advertising revenue fell 2 percent
• Non-digital advertising revenue fell 10 percent
• In 2014, newsroom employment dropped by 10 percent.

News magazines fared a little better, according to Pew, in a sampling of 14 magazines studied:

• Single copy sales fell 3 percent
• Individual titles’ single copy sales ranged from a 37 percent loss to a 65 percent gain
• Subscriptions to news magazines were relatively stable with a 2 percent decrease overall. The Nation’s subscriptions dropped 12 percent for the year, while Time’s decreased by 8 percent.
• Total circulation, a combination of single copy sales and subscriptions, experienced a 2 percent decrease across the 14 titles. The Atlantic had the biggest increase in circulation with a 2 percent increase.
• Average circulation across the titles was 923,000.

Statista offers facts on a broader base of magazines:

• Magazine retail sales at the end of 2014 were 103 million (total number of magazines).
• Magazine retail sales for the second quarter of 2016 was 85 million.
• In 2010, Americans spent an average of 24.7 minutes reading magazines on a daily basis. That number is estimated to decline to 16.5 minutes by 2017.
• The number of U.S. magazines is relatively steady, between 7,100 and 7,300 magazine titles since 2008.

To compensate for declining readership and revenue, publishers are trying innovative tactics and strategies and a multi-platform approach. Here are some of the more notable innovations from 2016.

Meredith Corp. Expands into Retail Sales, Videos and TV

Meredith Corp. (NYSE: MDP), a 115-year-old media company, has had a busy year. In addition to owning 17 TV stations and reaching more than 100 million women each month with its consumer magazines and websites, in 2016, Meredith shut down More magazine, debuted redesigns of Family Circle and Allrecipes magazines and launched The Magnolia Journal.

The company also started a number of new endeavors in 2016 that will help the multi-media Meredith test new revenue streams. Unlike some publishers who have reacted too slowly to declining print numbers, Meredith Corp. seems to be ahead of the game, testing and changing at a time when the company is profitable.

In October, when Meredith reported its financials for the first fiscal quarter of 2017, total company revenue increased 4 percent to $400 million and total advertising revenue grew 3 percent to $226 million. The company declared earnings per share of $0.75, more than triple earnings of $0.24 for the same period last year.

Meredith chairman and CEO Stephen M. Lacy credited strong political advertising at local TV stations and double-digit growth in digital advertising at both the national and local levels for the company’s impressive results. In addition to strong TV ratings, Meredith said its magazine readership is 127 million, and traffic to its digital and mobile sites averaged 81 million unique visitors per month, a 13 percent increase year-over-year.

Eager to keep the momentum going, Meredith Corp. is testing other products and platforms. Here are a few of the initiatives launched by Meredith in 2016.

• In September, Meredith announced it was partnering with Merial, a leading animal health company to develop As the Dog Barks, an original, four-part video series – a spoof on daytime soap operas. The goal of the series is to engage millions of pet lovers across Meredith’s digital properties and social media channels while creating an awareness for Merial.
• In August, Meredith announced the first-ever television series inspired by an app. In this case, the app is Allrecipes Dinner Spinner. Hosted by chef Gabe Kennedy, the 26-week Dinner Spinner series is a half-hour Saturday morning show that premiered in October on The CW. It features two home cooks competing head-to-head to create a unique dinner. A panel of three celebrity judges chooses the winner of each week’s competition.
• At the beginning of the year, Meredith partnered with Apparel Bridge LLC to launch SHAPE Active, a moderately-priced activewear collection for women. Meredith acquired SHAPE magazine in January 2015.

• In September, Meredith partnered with Bellisio Foods to introduce EatingWell frozen entrées. Banking on the success of EatingWell magazine, the line includes eight different meals following a specific, nutritional formula. Available in more than 5,000 retail stores, the frozen meals are free of artificial colors and flavors, preservatives, MSG and hydrogenated oils.

New York Times Tries Acquisitions and Events

Acquisitions: The Wirecutter and The Sweethome

Last month we wrote about The New York Times’ $30 million acquisition of The Wirecutter and The Sweethome, online consumer guides that generate revenue from affiliate links within their product recommendations. As a privately-held company, The Wirecutter doesn’t have to report its financials, but Owler estimates its annual revenue to be about $5 million. If that figure is accurate, it will only take six years for the New York Times to recoup its investment. The time frame may be shorter if they work to grow and expand that revenue stream.

This is a good example of a publisher branching out from its core competencies to acquire a proven moneymaker. The key is whether they can make it work, given the minimal impact estimated annual revenue of $5 million would have for the Times. Let’s look at the numbers in the New York Times’ 2015 annual report.

Revenue Category	Revenue	Percentage of Total
Circulation	$845.5 million	53.5%
Advertising	$638.7 million	40.4%
Other	$95.0 million	6.0%
Total Revenue	$1.58 billion	99.9%

 

Based on 2015 numbers, $5 million in revenue would be less than 0.5 percent of the New York Times’ total revenue. It is hard to imagine how such a small influx of revenue could be beneficial to the Times. Perhaps they plan to grow the affiliate revenue or maybe they will benefit from having access to The Wirecutter’s audience.

There is an added challenge for this acquisition as well. The New York Times is calling The Wirecutter’s work “service journalism,” a term typically used to refer to consumer-oriented features and advice that benefit readers in some way. While The Wirecutter’s reviews do help consumers, it is a stretch to call it journalism with the inherent bias that comes with writing reviews for products where you receive a percentage of sales. The New York Times needs to draw a clear line in the sand between what it does and what The Wirecutter does, so the Times doesn’t lose its reputation as a trusted legacy publisher.

Events: nytLive

Leveraging the emotionally-charged election, the New York Times planned an exclusive election night event – Election Night Live. For $250 a person, engaged readers could watch the election returns with Times’ staffers including executive editor Dean Baquet, senior editor for politics Carolyn Ryan, managing editor Joseph Kahn, editorial page editor James Bennet, and op-ed columnist Maureen Dowd, as well as U.S. Congressman Hakeem Jeffries, U.S. Congressman Steve Israel and the New York Times Company president and CEO Mark Thompson, among others.

The evening kicked off at 7 PM with moderated discussions on a variety of hot topics:

• Election Day 2016: How Did We Get Here?
• From #NastyWoman to Black Lives Matter
• Vote for Trump!
• The First 100 Days
• Politics and the English Language
• The G.O.P. in Crisis

After closing remarks just before 9 PM, the election night party began. After the party, the Times has posted videos and photos from the event online. Nieman Lab reports that the event was the brain child of nytLive, the newspaper’s events division, which brings together national and global leaders to discuss important issues in depth.

Here is the 2016 and early 2017 line-up of nytLive conferences:

Some of the events are by invitation or application only, while others like the Luxury Travel Conference are open but pricy, starting at $1,115. The New York Times would not disclose conference attendance statistics when we asked.

Motor Trend Launches Premium Streaming Video On Demand Subscriptions

In the fall of 2015, Motor Trend magazine, owned by TEN: The Enthusiast Network, decided to leverage the popularity of its free YouTube subscribers to offer a premium product, Motor Trend On Demand, a subscription service that would give fans exclusive access for $5.99 a month, $59.99 a year, or $99.99 for two years, following a 30-day trial.  Motor Trend calls its subscription “the premier all-automotive video-on-demand service.”

The new subscription service offers more than 1,000 hours of automotive, motorcycle and motorsport programming including old movies and TV, documentaries, videos from the Hot Rod and Motor Trend archives, early access to YouTube shows, live motor sports including exclusive live events, and original programming for popular shows including Roadkill, Roadkill Garage, Roadkill Extra, Head2Head, Dirt Every Day, Dirt Every Day Extra, Ignition and more.

The service is available worldwide, however, international viewers will have limited access to some of the content because of licensing restrictions. Motor Trend On Demand can be accessed from an internet-connected computer, laptop, tablet or smartphone, Roku, Apple TV, xBox360 and Xbox One.

With a built-in audience with monthly print circulation of 1 million readers and 4.5 million YouTube subscribers, this new addition for Motor Trend is a no brainer. Motor Trend has already seen the success and demand for its YouTube videos. It makes sense for them to capitalize on that success by trying an on demand subscription to see how it fares.

The Guardian Offers Sponsored Content and New Membership Opportunities

Over the course of the last year, Guardian Media Group, the publisher of The Guardian and The Observer, has revealed it is in financial trouble, and it has developed an ambitious three-year plan to cut costs by 20 percent to address serious budget shortfalls and help the company become profitable again. David Pemsel, CEO for Guardian Media Group, said the company is taking decisive action to fight a “volatile advertising market.”

“We are on track to deliver a 20% reduction in our cost base over the next three years, while our unique ownership structure will allow us to continue to invest in the world-class journalism that these numbers clearly show our international audiences want,” Pemsel said. “We have a hugely talented workforce and a strong global brand with well-established core values and we remain committed to achieving financial and editorial sustainability through our three-year business plan.”

To that end, the Guardian is experimenting with a few different initiatives to diversify its income base.

Guardian Labs

Launched in 2014 as one of the first in-house branded content and innovation agencies, Guardian Labs is the news organization’s paid content portal. The portal includes a mix of sponsored content by corporate backers like Visa who provide content related to finance, Nissan who offers “Weekend Wonders: Road Trip to One of These 53 Quirky Destinations Across America,” and Squarespace who published a series of videos about side jobs and passion projects.

Guardian Labs has a team of more than 130 content specialists who combine editorial, marketing and multimedia talent. “We’re tailor-made to deliver exceptional branded content, by bringing together world-class content, technology and data expertise.”

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What seems unique about Guardian Labs is that it segregates its branded content from its other content, and it is clearly labeled as paid content. Some news providers bury native advertising alongside regular news stories, making it difficult for news consumers to identify which articles are meant to be objective versus those that have a specific purpose.

Membership

Two years ago The Guardian rolled out an exclusive membership program for readers and supporters to more deeply engage with the news outlet. At that time, the program offered four levels – friend (free), supporter (£50/year or £5/month), partner (£135/year or £15/month) and patron (£540/year or £60/month), each with its own set of benefits.

Jonathan Freedland, executive editor of the Guardian’s Opinion section, explains the concept of membership:

“The Guardian’s always been a community of ideas, but now those ideas can be amplified. People who’ve come to a Guardian event can then take that out into the world…If you believe in Guardian journalism, then the best way of expressing that is to become a member.”

In March 2015, the Guardian reported the experiment had yielded 35,000 members, though they did not disclose how many members were free versus how many were paid. A year later, however, as part of its cost-cutting measures, the Guardian reined in the program to simplify it and make it more attractive to readers. The goal, according to editor-in-chief Katharine Viner, was to grow a deeper set of relationships with the Guardian’s audience over the next three years.

In the U.S., the membership program has been whittled down to one tier, called Supporter.

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In the U.K., readers can become Supporters (£49/year or £5/month), Partners (£149/year or £15/month) or Patrons (£599/year or £60/month), though the pricing has changed a bit.

In the U.K., the Guardian offers masterclasses, courses and workshops on a variety of topics including writing, social media for business, history, public speaking, web design through Word Press and more. The news organization also offers events, discussions, debates, interviews, festivals, dinners and private views exclusively for its members. As of November 16, there were 21 upcoming events in six cities (Bath, Birmingham, Bristol, Leeds, London and Manchester). Several of the upcoming events have already sold out, including a private viewing of ARTIST Rooms: Andy Warhol and an evening with Trevor Noah.

The Guardian’s award-winning mobile app, available for iOS and Android, had reached more than 5.3 million downloads as of July 27, helping extend the company’s brand across platforms. The media outlet has also seen success on its website, generating record traffic following the Brexit vote. On Friday, June 24, The Guardian had more than 17 million readers, almost 3 million more readers than its second largest day. In June 2016, The Guardian had more than one billion page views for the first time in a single month.

Men’s Health Launches a Quarterly Subscription Box

2)]This spring Men’s Health, a Rodale-owned glossy magazine for men, announced it was launching Men’s Health Box, a quarterly subscription box for men. With a price tag of $89.99 per quarter, or $1 a day, each box is curated by Men’s Health editors and includes “life-improving” products including fashion accessories, grooming products, fitness gear, gadgets, snacks and more, many of which have been featured in the magazine. Annual subscriptions are also available for a discount. The box’s retail value is estimated to be more than $150.

Signing a three-year agreement with The Box Out Group to prepare and ship the boxes, Rodale, the world’s leading health and wellness content company, wants to see this new project succeed. While there are other subscription boxes for men available, we think this box has a good chance of succeeding. It is offering quality products, a unique experience and exclusivity which might be attractive to the Men’s Health audience.

Because of the price point, a quarterly box is a great way to test the market, see what works, and adjust as they go. If this box is successful, we anticipate Rodale will roll out similar subscription boxes for some of its other titles – Prevention, Women’s Health, Runner’s World, Rodale’s Organic Life and others.

Become a Vogue Insider with an Annual VIP Membership

3)]Vogue, owned by Condé Nast, announced its VIP membership program this summer. The members-only program gives subscribers exclusive content from Vogue editors, limited-edition designer collaborations like the Clare V. clutch, Facebook Live Q&A with Vogue editors, a one-year all-access magazine subscription, a six-month gift subscription to share, the It Girl Style special issue and other special perks and offers from Vogue partners. For just $200 a year, you too can be a Vogue VIP.

This is an interesting, low-risk membership idea. Except for the exclusive clutch designed specifically for Vogue, there isn’t much financial risk involved with this program. While some may scoff at the $200 price tag, Vogue is a high-end fashion magazine appealing to a very specific target audience – an audience that can afford the $200 membership fee and that will enjoy the exclusivity the program provides.

Southern Living Opens Branded Retail Store in Myrtle Beach

4)]A subsidiary of Time Inc., Southern Living has taken the concept of revenue diversification to a whole new level with specialized cookbooks, gardening and landscape books, books on decorating and the holidays, the Southern Living Hotel Collection, a Plant Collection, an annual Idea House, Southern Living communities and Southern Living house plans to name a few.

In its latest venture, Southern Living opened a 5,000-square-foot branded retail store in Myrtle Beach, South Carolina in November. According to Media Post, this store is the first in a line of brick-and-mortar stores that are planned to open in 2017.

The store includes local art, Southern Living-branded products including its cookbooks, a grocery section that includes products that have won the Southern Living food award, and products featured in this year’s holiday gift guide.

In addition, the store features Fashion, Home Décor, Travel and Gardening sections as well as a demo kitchen so customers can sample Southern Living recipes. With a reach of 20 million readers each month, Southern Living has a ready-made audience for its new stores.

Nonprofit News Site VTDigger Adds Podcasting to its Repertoire

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With a solid 150,000 unique readers per month and a $1 million annual budget, nonprofit news site VTDigger is holding its own, but it wants to expand beyond written content into the world of podcasting, says Nieman Lab. The news outlet had tried video interviews during Vermont’s legislative hold, but readers never really took to the format.

Mark Johnson, senior editor and reporter for VTDigger, told Nieman Lab people don’t have time to watch videos, but they do listen to audio at home and in their cars. And the Digger Dialogue series was born. The podcast will help the news outlet test format, length, guests and technical improvements while also giving VTDigger the opportunity to expand its audience and reach new sponsors and donors.

VTDigger has already done a test run, which was sponsored by a Montpelier-based business for $5,000. Even larger sponsorships are possible once VTDigger finetunes its model and expands its promotional efforts of the new product.

At the beginning of November, VTDigger published “Digger Dialogue: Right to Life Group Feeling Misused,” that included an online article with photos and an embedded link to a 27-minute audio file. Other recent topics include commentary on the 2016 election, Rep. Peter Welch’s thoughts on a Trump presidency, hope on the heroin horizon and the opiate crisis.

We love that VTDigger is testing and making incremental changes as they go rather than going “all in” on a concept not yet proven. This is a good way for any publisher to experiment with new products to test their popularity and viability.

Richland Source Releases Live Album, “Newsroom After Hours”

6)]As part of its commitment to promoting live entertainment through its RichlandLIVE initiative, Richland Source now has a mixed-tape-style CD and digital download readers and music fans can buy for $7.

The music represents a sampling of music from a series of seven concerts Richland Source hosted in its Mansfield, Ohio newsroom after hours. The collection is titled “Newsroom After Hours,” live original music from Mansfield’s best independent artists.

Each set was recorded and one song from each show was featured in a video that was then posted to social media. This example features Al Jenkins & The Trio performing their single ‘One Up which received 419 views on YouTube.