Economics & Research Blog
Look at Magazine Revenue Increase Data with a Skeptical Eye
By Dr. Joe Webb
Published: October 16, 2007
Today's report from the Publishers Information Bureau should be viewed carefully. The key phrase is "rate-card-reported advertising revenue" which is their way of saying "list price." Most all ad pages are discounted, and that's become more common over the years as bundles of promotional formats are assembled into a contract, such as custom publishing, web site advertising, direct marketing such as list rentals, or any other options depending on the publisher and their marketing. "Rate card revenue" is the equivalent of having Wal-Mart report its corporate revenues at list prices.
More importantly, they are at current dollars, and not "real dollars." Where the consumer price index is running at about 2%, the producer price index for publishing is running at about 4.4%. The PPI is not based on list prices, but is based on the most recent or average prices for goods and services as customers are actually charged. Most of the revenue increases being reported are from price increases.
The important item in the release is the number of ad pages being reported, and those are down. So is circulation. We know this because we get circulation data from other sources, such as the Audit Bureau of Circulation, but also we know the pieces and weight of goods going through the postal system. Fewer ad pages means fewer editorial pages, which means lower page counts as far as printers are concerned. Lower circulation means shorter press runs (before anyone goes into a tizzy, we're talking about runs dropping from a million to 900,000, not anything that creates a print process change).
In all, the report affirms the continuing malaise of the big consumer magazine publishing business.