Magazine article Folio: the Magazine for Magazine Management

Reader's Digest Finds Success Elusive for Special-Interest Titles

Magazine article Folio: the Magazine for Magazine Management

Reader's Digest Finds Success Elusive for Special-Interest Titles

Article excerpt

The Reader's Digest Association entered the special-interest magazine market six years ago with a simple theory: Take the areas in which the company's customers showed the most affinity--health, travel, do-it-yourself and retirement--and leverage RDA's database containing 50 million U.S. households against those subscribers.

Today, those special-interest magazine acquisitions--American Health, Travel Holiday, New Choices for Retirement Living and The Family Handyman--are keeping the segment's bottom line awash in red ink.

Although the company as a whole boasted an operating profit of $330.2 million on revenues of $2.6 billion in fiscal year '92 (which ended June 30), the special-interest publications lost $19.5 million on revenues of $75.5 million.

"It's the single obvious failure to date," says Salomon Brothers media analyst Ed Atorino. "They bought some problem children and it's taken longer to fix them because of a very tough recession."

Drastic measures have been considered to right the troubled titles. Travel Holiday, a struggling third in the economically battered travel category, was nearly downscaled, sources say. But those plans were averted thanks to recent breakthroughs in non-endemic advertising, namely automobiles. (RDA management declines to comment on internal deliberations.) Last year, the magazine carried 12 pages of automotive advertising; this year, because of a stronger sales effort, the total will be 65, says publisher Pat Haegele.

Snagging new advertisers outside core areas and buoyant results at American Health (it will close '92 up 33 percent in ad pages) are causes for optimism at the special-interest publications. And with narrowly targeted magazines gaining favor among advertisers, RD executives believe they are poised for growth and profitability.

"Niche-oriented publications are coming from positions of strength in the nineties," says Bob Mancini, senior vice president and director of media services at J. …

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