10 Reasons New Magazines Fail

Folio: The Magazine for Magazine Management, Feb, 2001 by Dale Buss

IN BOOM TIMES OR DOWN, THE RULES FOR LAUNCHING A SUCCESSFUL START-UP REMAIN SURPRISINOLY THE SAME.

IN INDUSTRY PARLANCE, IT MAY SOMEDAY be known as the New Year's Swoon: the couple-day freeze in early January when the announced closings of George and Offspring sent a shiver through the business and underscored the rather abrupt end of what had been a balmy period for magazine publishing.

But the demise of the two high-profile start-ups wasn't necessarily the result of the general economic downdraft now in full swing or even the pronounced chill among advertisers as 2001 opened. Instead, some observers say, the closures of George, Offspring and a number of other new titles that bit the dust around the same time reflect the reality that establishing a new magazine remains a perilous enterprise--and remind us that the majority of start-up ventures still fail within a few years.

The upshot: George, the Hachette Filipacchi-owned journal of political hip-ness, eventually suffered the lack of advertiser interest that often greets magazines about politics, and it probably would have closed much sooner were it not for the status it acquired in 1999 as a sort of would-be eternal flame in memory of its late co-founder, John F. Kennedy Jr. And while the sponsors at the Dow Jones-Hearst joint venture remain passionate about the idea behind Offspring, an offshoot of Smart-Money, they seemed to have forgotten that their target audience of upscale parents might be too busy compiling wealth to read about stuff like how to spend amply financed quality time with their kids.

"It's still the case: The new magazines that are succeeding are filling a niche where there is a real need. Those that are dying are the me-too's or the ones trying to create a market that didn't pre-exist, and for which--they are finding--there really isn't a need," says Ruby Gottlieb, senior vice president of Horizon Media, a New York City-based media-buying service.

Such rules had been evident over most of the course of the 20-year boom in new-magazine titles. But during the past couple of years, much of the peril seemed to have left the exercise, as the exploding New Economy spawned dozens of Internet-related titles and brought advertising demand that allowed many of them to bulge to hundreds of pages a month. At the same time, more and more brand extensions of well-established titles provided comfortable jumping-off points for readers and marketers. And several clearly ego-driven projects, which might have been more skeptically greeted in an earlier era, seemed instead to find acceptance and even--as in the case of Oprah--an embrace by the marketplace.

But the current shakeout is reminding the industry to accept some limits, and it's forcing more start-ups to confront mortality. Even with the recent record economic boom, almost half of new magazines still don't celebrate their first anniversary, and about 70 percent of those that die don't even make it to a second issue, says Samir Husni, a journalism professor at the University of Mississippi. After a decade, only about one in 10 new titles is still publishing. "I have a personal collection of about 15,000 first editions," Husni says. "If it were second editions, there would be only about 3,000."

When it comes to new publications, publishers, consultants and other experts list 10 problems that most often separate the also-rans from the survivors.

No audience

It can be easy, especially for entrepreneurs, to perceive a market for their brainchild where there actually isn't one. "Lots of people make the mistake, first, of asking their friends if it's a good idea," says Peter Craig, president of the Magazine Consulting Group. For example, he says, his Los Angeles-based concern recently received a serious proposal for a new-magazine non-starter that would have been based on "lifestyles of advertising salesmen."

Gottlieb says that she's "seen lots of new magazines coming my way whose reason for being I just don't understand." For example, she cites a start-up from a few years ago, Smart TV: "It was geared toward the educated, intellectual television viewer. But that's like an oxymoron: How many people are there out there who really could be classified as 'smart' TV viewers?"

But media conglomerates can go wrong, too. Husni suggests a similar lack of audience greeted American Express Publishing Co.'s recently launched and quickly canned B. Smith Style, which was conceived as a sort of "Martha Stewart for African Americans."

For trade publishers, argues Joel Novak, the simple but too commonly committed mistake is not picking a growth market. "It's always easier to be a salmon swimming with the current rather than against," says the managing director of Veronis, Suhler & Associates, a New York City-based media investment bank. "If it's not a market that's targeted to grow rapidly, regardless of how efficient or astute you are, you'll have a far more difficult time."

Weak initial funding

Many start-ups make the mistake of underestimating the amount of capital necessary to create a viable concern out of their new venture. Or they simply aren't able to establish crucial financial underpinnings.