Thursday, March 26, 2009

Celeb magazines suffering like the rest of us

Try and remember there is a human cost - or nearly human cost - as you read predictions that the US celebrity magazine sector might be wiped out by the recession:

This, according to a new report from DeSilva + Phillips, a New York-based media banking firm, released today.

The rise of “feisty online alternatives” and the recession have sped up the decline of some celebrity media franchises, according to the report. But “timid magazine management” is also to blame.

As a result, celebrity magazines “have the most to lose” in terms of audience and revenues—“and they will certainly lose the most in the years ahead.” People, the report notes, is perhaps the only magazine to prove itself as a multi-platform leader—accounting for 24 percent of the category’s print circulation, 28 percent of its ad pages and “an eyebrow-raising” 43 percent of its revenues.

I'm not quite sure that the D+S report quite knows what it's talking about, though:
The report points to the $1 sale of TV Guide, a magazine that once was acquired by Rupert Murdoch for $3 billion, as emblematic of the erosion of print’s value. “How [a] magazine is worth nominally .000000001 percent of what it was 20 years ago is a story for a B-school case study,” D+P managing director Ken Sonenclar, the author of the report, wrote. “But what’s most noteworthy now is that the sale excludes and the TV Guide Network cable channel, which were sold separately in January to Lions Gate Entertainment, the Vancouver-based film company, for $255 million. That’s where the seller realized growth and value.”

Isn't using TV Guide as an exemplar of the entertainment sector a bit dodgy? Given that the main reason for the fall in value of a magazine which has been hit by everyone getting TVs which have guides built in?

And, yes, the two electronic versions of TV Guide sold for millions, but given that even adding that to the dollar for the magazine you're still looking at a loss of two and three quarter billion dollars in the brand's value, it's hard to spot where Murdoch actually realized any growth or value at all.

Still, gloomy outlook for the celeb mags - care to offer a prediction about who might do well, Mr. Sonenclar?
He added: “Long-term winners online will have roots in print, TV and the web—and so will the losers.”

Brilliant. Thank you for helping me through this difficult period with your insight. I'm reading between the lines and assuming this means that celebrity news services who have their roots in riding bicycles up and down the street shouting about Angelina Jolie's breasts have no hope of surviving.