As well as having the necessary business acumen, publishers and editors must be passionate about their titles. Mary Hogarth explores key strategies for a sustainable magazine.
What makes a magazine successful? Passion, innovation and a sound business sense are my three essentials. Because without these three, publications are likely to be soulless with little hope of a reasonable ROI.
Although passion and innovation are essential qualities particularly in editors, publishers need to know how to achieve a positive cash flow. They must also be astute at planning and devising strategy.
These aspects all play a part in the success or failure of a title, be it a print or digital concept. That said, when it comes to business models caution is advised – because, as with most aspects of publishing, one size does not fit all.
Each magazine publisher has its own unique perspective. Therefore, publishers must tailor their business strategy accordingly and regularly review practices if publications are to be sustainable for the long haul.
This article will explore how to build sustainable titles in terms of planning, cash flow, developing the right business model and building revenue streams.
Without attention to detail a magazine will surely fail when it comes to achieving a balanced cash flow.
Generating sufficient revenue to meet all expenditure can sometimes be a juggling act. But income generation is only part of the problem. Sometimes problems arise because of bad debt or poorly managed accounts.
A careful approach to planning and early intervention is key. It is crucial to identify potential problems that can have a negative impact on accounts, then develop appropriate action plans to deal with them.
Using these six tactics can help to minimise poor cash flow and achieve sustainability.
- Encourage prepayment: offer incentives for pre-payment on advertising space
- Sell a series: when selling advertising space, incentivise your sales team to secure series bookings with pre-payment
- Build up subscription sales: magazine subscribers pay in advance which equals cash in the bank
- Timely payments: have systems so payments come in promptly, penalise late payers and don’t delay dealing with bad debts
- Avoid income eaters: such as monthly payments for those added extras that aren’t essential
- Keep it lean: monitor all expenditure and when necessary be prepared to make cuts.
A successful model
Having a realistic business plan is the key, providing a road map for the journey ahead. An astute publisher will not only have identified the end goal but also mapped out how to get there, with key markers to achieve along the way.
Though once developed, a business plan must be regularly evaluated as circumstances can quickly change.
After a decade of disruption following the evolution of digital content, the old model of advertising plus copy sales no longer works. To survive publishers have had to be more innovative when it comes to revenue.
There are numerous ways to expand magazine publishing from events to building a brand around a membership model.
Research pays dividends when creating or changing a business model. An individual approach is also crucial. What works for one publisher will surely fail for another, so first invest in research then evaluate the data and consider the impact of change on your current audience.
Take a holistic approach before making any big changes.
And when strategies or the business model becomes less effective? First, take a breath. While it is wise to take immediate action to stem losses, rash decisions must be avoided. Instead take a steady, methodical approach to identify areas of poor performance, then adjust your strategy accordingly.
Multiple revenue streams
An essential part of good cash flow is having a reliable stream of revenue. Those publishing houses that have developed a strong membership, subscription model or multiple revenue streams will be more financially stable.
Increasing revenue streams is another good measure to ensure a more stable cash flow. However, these must be relevant to the business model as well as the readers and offer clear value.
Potential revenue streams are likely to include some – or all – of the following:
- Brand extensions; such as digital editions, sister publications, books, events, conferences, courses and festivals
- Advertising sales: incorporating an innovative strategy and selling online plus print advertising as one package
- Sponsorships/promotions and services: facilitating strategic partnerships or third-party sponsorship of in-house events, plus selling design and content packaging services.
- Copy sales: digital/print magazine sales on the newsstands, subscriptions, along with in-house back issue sales and direct sales to partners/advertisers if appropriate
- Memberships schemes: will help cash-flow and is also likely to increase audience reach and reader loyalty
- Online content/paywalls: using a micro-payment system to sell additional content
- Product licencing: from selling the rights to content to be repurposed in an existing title to licensing the brand in terms of merchandising – particularly suited to specialist titles such as gaming magazines.
Remember that every title has its own identity – and this must be reflected in any brand extensions.
So, to successfully diversify first identify potential areas for added value, then test these with the appropriate market research. Only then can you create additional and relevant revenue streams, which have been specifically tailored to your business model.
The last word
Independent media consultant, trainer and lecturer David Bostock says creating viable business models is the biggest challenge for publishers.
Today business models must be different for each title. In the past decade, I have seen the industry move from a brand/magazine centric to a reader-centric business model – and readers are different in every market, a fact sometimes overlooked.
To be sustainable, publishers must build a profitable business model around the consumer and their needs – and for advertisers too, particularly where they see value. Often that value can be found in consumer as well as B2B data.
In consumer magazines, publishers have a deep understanding of their readers, but the data backs it up. And because data is available marketing and advertising directors now want proof of facts and figures so when approached by advertising sales team they will respond with: ‘this is who you tell me your reader is now show it to me – and I want to be able to contact all your readers too’.
It is essential to realise that there isn’t a one-size-fits-all model. You can’t just copy a rival title’s strategy and assume it will work, every magazine has a unique value proposition.
Certainly, it’s a lesson I’ve learned the hard way, so I always advise clients to focus on their readers – to talk to them and observe their habits to find out what they want.
While a solid business model and good cash flow management are crucial, a strong team is also key. Take time to find the right editor – someone who has a passion for the magazine, then build your team.
A like-minded team who communicates and bonds can achieve great things with very few resources. I know, because years ago I was fortunate enough to have had the privilege to be part of such a team.
This article is based on the fourth chapter of my latest book, Business Strategies for Magazine Publishing published by Routledge and available from Amazon.