Real-World Solution

Folio: The Magazine for Magazine Management, July 1, 2003

CIRCULATION

Now Available on DVD

In an effort to boost newsstand sales, Macworld is raising the single-copy stakes with a premium that packs more gaming punch. The computer magazine is swapping the CD-ROM it normally polybags with newsstand issues for a DVD. The first test was in April, with a newsstand-only special "Digital Hub" issue available through June.

The new and improved premium is a sign of the times, believes Macworld editor Jason Snell. Now that most new computers have the capability to play DVDs, CD-ROMs just don't have the same allure. "We can only fit so much on a CD-ROM, and with game demos that space can fill up very rapidly," he says. "With a DVD you can put on so much more, and it changes the perceived value. And hopefully we'll sell more on the newsstand."

Early anecdotal evidence from the test has been positive, though concrete numbers won't be in until the issue is off newsstands. "I think we'll probably do it again, but DVDs are more expensive to manufacture," Snell notes. However, DVDs are a better (and cheaper) option than packaging two CDs, something the magazine has tried in the past. "This was a better idea because the cost was going to be close, and with one DVD you still get a lot more data," he adds. And as every techie knows, you can't get enough data. Macworld is the first title to test DVD premiums in the U.S., but it's already the rage in Europe, Snell reports.

LICENSING

Move Over, Martha

Taking a page from the Martha Stewart book of everyday licensing deals, Hearst's House Beautiful recently announced a partnership with May Department Stores to market home merchandise. The shelter glossy will be offering up everything from dinner plates to textiles under the House Beautiful brand, says Glen Ellen Brown, vice president for Hearst Brand Development.

The deal came about when HB execs realized that the magazine could parlay its editorial expertise into its own line of home accessories, and that the design tips found in HB pages could be translated into items on retailer shelves."We give [readers] information and confidence in terms of design that they can then act on," says Brown. She emphasizes that the products will not compete directly with categories that are dominated by advertisers in the magazine. "My goal is to build incremental business without cannibalizing profitable existing business," she explains.

The products are expected to appear in 2005 in May's more than 350 department stores around the country.

While Brown declined to comment on the financial details of the relationship, she did categorize it is a fully integrated, major partnership. "We both have equities, and we'll jointly build equity with the consumer," she says.

According to Gene S. Kahn, May's chairman and chief executive officer, the partnership will enable his retail chain to further set itself apart from competitors, and to build its bridal business and wedding registries by drawing young customers into May's home stores.

CIRCULATION

Shareholder Subs

AOL Time Warner shareholders are getting a bonus in their proxy and annual meeting notice these days. The mailing, which goes out annually to more than 2 million people, offers special discounts on various Time Inc. magazines.

The mailing has been a new source for generating high-quality subscriptions. "We tried it in 2001, and the response was incredible, much better than we expected," says Tricia Spollen, assistant director of multi-title marketing. In the first year, she reports that the offer brought in 40,000 gross subscriptions. So far this year, just under 30,000 subs have been requested, and Spollen expects the total will surpass the 43,000 subs generated in 2002. "The response rate for this year is the strongest ever," she says.

In addition to reaching a desirable demographic, Spollen claims that the subs have a pay rate of around 95 percent, and that there has been little overlap in response year-to-year. "It really is a great new source of new subscribers," she says. Discounts offered to shareholders range from 33 to 86 percent of the newsstand price, and cover magazines from Time4 Media and Southern Progress as well as from Time Inc.

The offer is likely to appear on the company Web site in the near future, so that it will be in front of shareholders all year and lead to even more new subscriptions. As Spollen says, "The pay rate is extremely high, the renewal rate is very high - it's successful all around."