By Hirschfeld, Bob
Folio: the Magazine for Magazine Management , Vol. 33, No. 8
Byline: Bob Hirschfeld
THERE'S SOMETHING THAT LIFE PRESIDENT ANDY BLAU WANTS TO MAKE CLEAR: THE LATEST INCARNATION OF THE ICONIC TIME TITLE THAT IS DUE OUT IN OCTOBER IS NOT A SUNDAY SUPPLEMENT. FOR STARTERS, IT WILL ARRIVE WITH FRIDAY EDITIONS OF 63 DAILIES. BUT MORE IMPORTANT, HE INSISTS, LIFE IS NOT AN ALTERNATIVE TO PARADE AND USA WEEKEND . "WE'RE A NEWSPAPER-DISTRIBUTED MAGAZINE," HE SAYS. "IT'S NOT A SUPPLEMENT."
It's an important distinction, not only for retaining the incalculable brand equity of the Life name, but also for Time's strategy. The much-revived Life is now positioned as a breezy lifestyle magazine for relatively upscale urban consumers, a vehicle for Time Inc. to generate more ad sales (at more than $300,000 per page) from its core advertisers as well as from marketers that have not appeared regularly in the company's other mass-market books, including direct-response advertisers. At the same time, Time execs are eager to avoid hand-to-hand combat with the reigning giants of Sunday supplements: 63-year-old Parade, with a circulation of 36 million and Gannett's USA Weekend, which reaches 20 million readers.
It took more than two years for Time to give the final go-ahead on the project, which had become an open secret in the industry. The venture took on such importance that Time Editor-in-Chief Norman Pearlstine, a former Wall Street Journal editor, jumped in and spearheaded efforts to convince major newspaper chains to sign on.
In the end, the opportunity seemed worth the risk. Not only does Life give the company another mass-circulation magazine overnight, it does so in a novel and potentially lucrative way. By delivering Life via newspapers, the company avoids mailing and newsstand costs. And it pays nothing to acquire subscribers. To manufacture and distribute a single copy of a magazine the traditional way costs something in the neighborhood of $1.50 to $1.75. And to acquire a new subscriber costs roughly $15 to $25, guesstimates Mike Neiss, executive vice president and managing director at media buyer Lowe Worldwide. With 12 million subscribers at the low end of that the range, the savings would be $180 million, and even if it cost $80 million for paper, printing and staff - excluding whatever fee Time will pay the newspapers - that's still a savings of $100 million over launching the magazine the traditional way. "The costs of a magazine start-up are horrible," says Neiss. "Even with the most precise list, you usually get 90 percent nonresponders." Even though Time will wind up paying papers to carry Life, the per-copy economics should be compelling. "We have a weekly that is starting out with 12 million readers. What's not to be excited about?" says Pearlstine.
Not that Time is cutting corners on the launch. The budget is rumored to be in the region of $20 million. Time declines to comment on the investment or on the economics of the newspaper-distribution model. But says publisher Peter Bauer: "We're spending a hell of a lot of money on printing, paper and distribution. It's not about putting out a magazine in a cheaper way. It's about putting out a mass-reach magazine fast."
Time isn't the only publisher that is trying to leverage the newspaper-distribution system. Publishing Group of America, a three-year-old start-up, has been signing up dailies and weeklies in rural markets for its weekly lifestyle supplement, American Profile, and growing at a phenomenal rate (see sidebar, page 24). "By going with newspapers, you face no subscription marketing costs - none," says Profile CEO Dick Porter. "If you're Ann Moore, and you want to launch new magazines, you're well aware that new-business acquisition costs for magazines are really ugly."
The newspaper route also provides Time with an attractive demographic: Newspaper readers are generally more affluent and better educated than other mass-media audiences. And Time is skimming the top of the market, focusing on major metros, which account for 50 percent of the population and 70 percent of the purchasing power. …