A staggering statistic is that 26% of the consumer magazines in circulation at the end of a typical year have been launched during the previous twelve months. This fact underlines why magazines are at the cutting edge of consumer trends: they are fast-moving and responsive to the slightest consumer change, but this also makes them very difficult to track and manage as a product for retail sale.
| Magazine Launch Overview | |||
| Regular Frequency Magazines | 2004 | 2005 | Change |
| Launches | 462 | 586 | 27% |
| Deaths | 389 | 561 | 44% |
| Net Increase | +74 | +25 | -66% |
| Deaths as % of launches | 84% | 96% | 14% |
| One-Shots | 2004 | 2005 | Change |
| One-Shots | 263 | 268 | 2% |
| * Sources: WH Smith News, BRAD, Wessenden Marketing | |||
2005 in perspective
There are approximately 2,625 regular-frequency, paid-for, consumer magazines in retail distribution currently. The graph (below) shows the long-term trend in these numbers with three distinct phases:
* Phase 1: Cyclical (1989-1993).
Here, the peaks and troughs of the market followed the economic cycle, with the overall trend being slightly down as magazine deaths during the period exceeded launches by 4%, resulting in a slightly shrinking magazine market. Average launches per year = 551 titles.
* Phase 2: Strong growth (1994-2000).
This was a golden period for magazine sales generally: rising volumes, surging cover prices, an expanding retail universe. This is also reflected in strong launch activity, with the death rate dropping down to its lowest levels for some years. Average launches per year = 569 titles, with deaths as a percentage of launches averaging only 75%.
* Phase 3: Stabilisation and steady growth (2001 to date).
The market cooled down sharply in 2001, which was a major ‘clearout’ year, when launches slowed down and deaths exceeded launches by 27%. Since then, the number of launches has risen and the ratio of deaths to births has averaged 96%.
2005 in detail
* The level of activity dropped markedly in 2004 (from 578 launches in 2003, down to 462 in 2004). Yet it has bounced back again in 2005 to 586.
* At the same time, the number of deaths also jumped up in 2005, resulting in a much smaller net increase.
* In addition to the regular frequency magazines, there is a constant flow of one-shots. This activity hit a peak in 1997, when just under 1,400 products were launched in a single year. Since then, one-shot activity has slowed down sharply, mainly because of the more rigorous buying policies of the major wholesale and retail multiples. The figure for 2005 was 268 one-shots, slightly up on the previous year.
Magazine churn
The balance between magazine launches and closures is obviously the key driver of the total size of the magazine business. There have been two major ‘clearouts’, when magazine deaths exceeded births and the magazine market shrank: in 1992-3 and in 2001. These clearouts were largely driven by weak advertising markets, which undermined the viability of the more vulnerable magazines. Over the whole 1989-2005 period reviewed, the number of deaths averaged 89% of the number of launches. The figure underlines the massive amount of ‘wash-through’ in the magazine market as it constantly refreshes and reinvents itself.
Deaths are not just launches that fail in the early months, but also include long-established magazines which have reached the end of their lifecycle. Yet the high 89% death to birth ratio points to the fact that the average success rate of new magazine launches must be lower than the 1 in 3 often quoted in other FMCG categories.
Some big issues
Lying behind this mad flurry of activity there are a number of major issues.
* The role of specialist magazines.
Over 70% of new launches in 2005 had launch distributions of under 25,000 copies. While this is the engine room of the whole market in terms of ideas and creativity, it is also the source of a great deal of the strain that the supply chain feels itself under.
* The role of the retail multiples.
The buying decisions of a few, key buying points are having a bigger and bigger influence on the overall shape of the magazine market.
* Rising promotional spend.
The big launches are getting bigger in terms of their promotional support. The entry costs are rising inexorably. This has two implications. Firstly, it can pressure the major publishers to play safe editorially and to opt for proven, ‘me-too’ products. Secondly, it is putting the squeeze on specialist publishers.
* Retail theatre.
As the industry agonises over how to sell magazines more creatively and effectively in retailers, surely some of the answer lies in making more of this flow of ever-changing launch activity with more prominent displays.
Love them or hate them, launches are central to the continued health of the whole business. Yet the industry still faces a difficult balancing act between allowing open access for creative new ideas and controlling the flow of product through a more efficient supply chain. It is the retail multiples who will determine much of that balance in the years to come rather than publishers or the end-consumer.
| 10 facts about launches in 2005 1. There were 586 launches and 561 closures, so deaths represent 96% of launches. This means that the overall net increase in the total number of titles was small. 2. The average success rate for magazines is well below the 1 in 3 ratio quoted for other FMCG categories. 3. The most active magazine sectors were Comics & Teenage and Women’s Interest. 4. Only 8% of the titles launched had a supply level of over 100,000 copies, but these represented 60% of launch copies distributed. 5. 72% of titles launched had a supply level below 25,000 copies and they represented 15% of launch copies distributed. 6. Supermarkets handled 39% of titles launched, but took well below their normal share of copies distributed as they focus on the bigger selling titles. 7. For launches below 25,000 copies, a massive 68% of copies go through independents, influenced by limited acceptance from the retail multiples. 8. Every month had a significant flow of launches, but March was the most popular. 9. Despite the general buoyancy of weekly titles currently, monthlies continue to be the most popular launch frequency. 10. Of the distributors, COMAG handled the most titles (32% of the total), but Marketforce the most total volume of copies distributed (23%). |
