MEREDITH TO CONVERT ITS ICONIC LADIES HOME JOURNAL TO QUARTERLY
Apr. 25, 2014
Des Moines Register reports:
A 131-year-old magazine that helped usher in an era of magazines geared toward women will no longer publish every month, as the industry faces increasing pressure from digital competitors.
Ladies' Home Journal, which experts say became the first U.S. magazine to reach 1 million subscribers in 1903, will publish its last monthly issue in July before it becomes a special-interest quarterly publication available on newsstands only.
The Des Moines-based publishing giant Meredith Corp. has owned the magazine since 1986 and will transition its 3.2 million subscribers to other Meredith publications.
Meredith CEO Steve Lacy said Thursday that the magazine "would have become a drain on the resources" of the company's magazine division if it continued to publish monthly. According to industry trackers, advertising pages in Ladies' Home Journal fell 21.7 percent in 2013 compared with the year before.
Lacy announced the move during an earnings call that reported a 37 percent drop in profits for the third fiscal quarter, year-over-year. The report also showed a 19 percent drop in net profits for the first nine months of the fiscal year.
Meredith's earnings were affected by a special charge of $13 million, which included costs related to the transition of Ladies' Home Journal and layoffs. Excluding the special items, earnings per share were 70 cents, compared with 72 cents a year ago.
"The objective is to continue to make the brand available to the individual consumers who have been loyal," Lacy said, noting that the magazine's website will remain active. "By moving it to a newsstand-only publication, it eliminates any advertising dependency and costs in creating it."
Meredith officials said 35 people, most of them in New York, would be laid off due to the Ladies' Home Journal announcement. In addition, about 50 people in a Meredith-owned sales force training business in Michigan would be let go. Overall, less than 10 of the roughly 100 people laid off are in Des Moines, spokesman Art Slusark said.
Ladies' Home Journal will be produced in Des Moines, moving from New York, with the first quarterly issue expected to arrive in the fall.
"It has a loyal following, and we will continue to serve those consumers by keeping the brand alive and we will keep it on the newsstand," Slusark said.
Ladies' Home Journal began in 1883 as a chronicle of American life through a woman's eyes, and the magazine has served as a sort of time capsule from the same perspective. Throughout its 131 years, it has featured activities, celebrities and politicians and reported on topics like family, marriage, work, home and beauty.
It was an original member of the "Seven Sisters" of magazines aimed at women, along with Better Homes and Gardens, Good Housekeeping, Family Circle, Redbook, Woman's Day and McCall's. The magazine, at its peak, reached 6.8 million subscribers in 1968, Slusark said.
But legacy magazines find themselves in a constant battle to keep up with more modern publications, many exclusively digital, for advertising and readership.
Slusark said Meredith will look through data on the 3.2 million subscribers to determine a suitable replacement for the remainder of their subscription period. The company also will offer refunds to those who prefer them, he said.
Magazine experts lauded Meredith's move, saying it shifts the burden of paying for the magazine from advertisers to consumers.
"It is a general-interest magazine in an age of specialization," said Samir Husni, director of the University of Mississippi's Magazine Innovation Center, who noted a quarterly niche publication can often charge more. "They will benefit and serve the readers of the magazine who are willing to pay the price of the magazine."
Meredith's National Media Group, which includes its magazine brands, showed a drop in advertising revenue from $129 million to $112 million over the previous year. Circulation revenues were up 5 percent, primarily because of the launch and subsequent success of Allrecipesmagazine. Slusark said the magazine, which started with a circulation of 500,000, now has 650,000 magazines in circulation with a plan to raise that number to 750,000 this summer.
The Local Media Group, which includes the company's television stations, jumped in revenue from $85 million to about $97.5 million, driven partially by growth in digital advertising revenues. Meredith's stock fell 62 cents, or 1.37 percent, Thursday to close at $44.56.
During a conference call, National Media Group President Tom Harty said the Ladies' Home Journal change was purely an advertising decision. "This decision has nothing to do with consumer demand," Harty said.
According to data compiled by the Publishers Information Bureau, an industry tracker, ad pages at Ladies' Home Journal dropped from 228 in 2012 to about 178 in 2013. That resulted in a revenue decrease of 18.8 percent, according to the bureau.
Advertising is a key metric for the publishing industry, which typically sells off of circulation numbers. That is why magazine subscriptions are often offered for low rates. "We focus very aggressively on shareholder value, and it causes us to look with a pretty tough eye at this time of the year on every business we operate," Lacy said. "We are putting together our next three-year plan, our budget for (fiscal year) 2015, and deciding what we lean into and what to lean away from."
This is not the first time Meredith has made a similar move, Slusark said. In 2009, the company moved Country Home from a monthly to quarterly publication. Slusark said that magazine remains profitable five years later.
Some longtime Ladies' Home Journal readers, whose memories stretch back decades, lamented the move. Jamie McCullough-Harrison of the Melcher area in central Iowa called it sad news and reminisced about reading the magazine.
"I remember when I was a little girl," she posted on the Register's Facebook page. "I'd go page by page clipping out the coupons for my mom after she read the whole thing."