Magazines get a handle on ratebase management

Folio: The Magazine for Magazine Management, June 1, 1997 by Tony Case

More consumer magazines met their ratebases in the first quarter of this year than in all of 1996, turning in one of the best quarterly performances ever, according to the April 28 "Capell's Circulation Report" newsletter. Only 21 percent of titles claiming a ratebase fell short in the first quarter, compared with the 1996 year-end total of 23 percent.

"It really says that magazines have adjusted and cut their ratebases," circulation expert Dan Capell tells Folio:. "They're delivering on their promises more than ever before."

Among the most notable performers were Newsweek, Conde Nast's Details, Hachette's Metropolitan Home, Meredith's Midwest Living, Advance Publications' The New Yorker and Fairchild Publications' W.

Capell, managing director of the New York City-based investment banking firm Gruppo, Levey & Capell, singles out The New Yorker for consistently--and significantly--surpassing its ratebase. Over the past 15 years, only one issue of the weekly failed to sell the number of copies promised to advertisers.

So why doesn't The New Yorkerboost its base? Capell says he is perplexed. Smaller publishers, he points out, shy away from raising their ratebases for fear of scaring away advertisers--but that hardly applies to The New Yorker, whose accounts include such high-end merchandisers as Absolut, Chanel and Louis Vuitton.

"It delivers such huge bonuses over its ratebase," says Capell, who notes the magazine has been besting its 725,000 ratebase by some 100,000 copies. "Why not raise the ratebase and, thus, the ad rates? With the cost of printing and paper and everything else, it really makes you wonder."

Let the readers pay more

New Yorker president Tom Florio explains that in recent years the magazine has started looking at circulation as more of a profit center, while giving its ad customers a break. "We didn't feel advertisers should have to bear the entire cost of the magazine," he says. "We're putting out a spectacular editorial product, and we thought readers would be willing to pay for that product--and they are."

The New Yorker has raised its subscription rate 25 percent over the past four years. Over that same time, the title has hiked its newsstand price from $1.75 to $2.95.