Stability at the Top

Folio: The Magazine for Magazine Management, July 1, 1999

These days, it can sometimes feel like the magazine industry is roiling with change. Here's one view:

Circulation economics are in a state of turmoil; the wholesale and distribution industries are evolving in ways not friendly to smaller publishers; mergers and acquisitions are sweeping the industry; and private-equity companies are changing the priorities of magazine-industry ownership. The Internet is changing the industry perhaps most of all, and in ways that go far beyond how magazine-media companies deliver content to readers.

But all this change is not as encompassing as we might think. The handful of companies and individual magazines at the top of the magazine industry dominate it. And although these companies have changed dramatically internally, their positions of dominance have changed little over time. This is borne out by our FOLIO: 500, which starts on page 43 of this issue. Consider this:

In an industry that has something like 9,500 magazines with a frequency of four times a year or more, the top 500 produce the vast majority of the industry's revenue--and always have. The top 500 titles last year generated about $26.1 billion, which probably is good for as much as three-fourths of the industry's total revenue. The top 20 magazines produce $8.3 billion, which is nearly 32 percent of the total revenue generated by the FOLIO: 500.

The same major companies, Time Inc., Meredith, Conde Nast, Hearst and Hachette, with their large-circulation consumer magazines, have consistently retained their strength. In 1998, the top three companies--Time Inc., Conde Nast and Hearst--generated about 25 percent of the total revenue on the list!

Even more remarkable is the incredible stability among the magazines that head the list. Of this year's top 20 titles, 18 were also in 1992's top 20. While many shifted rank by a place or two, the top five didn't change at all. And the revenue they produced is also remarkably uniform--despite changes as the industry has moved from a deep ad recession to some of the best years in its history. The top 20 magazines produced revenues of $6.2 billion in 1992, compared to $8.3 billion last year.

In terms of their economic impact, these top 500 magazines, even the top20 magazines, represent an overwhelmingly dominant sector of the industry. And that sector, it turns out, is a very stable place, admitting relatively few new members. And especially for the elite titles, it is a sector seemingly immune to the negative effects of change sweeping the magazine industry.

Tony Silber