Magazines: Does it Matter Who Pays the Piper?

For those of you who love print magazines, the economics of the publishing industry might be of secondary interest. Who cares where the money comes from as long as a mag reads like a dream and looks beautiful, right? But a couple of recent developments might make you question who is pulling the levers at your favourite publications. The first, and possibly most seismic of these, was a leaked memo emailed by the Walmart owned supermarket Asda to its magazine suppliers. You can read the full text of the email here, but to summarise: along with an increased margin on each magazine sale, Asda demanded ‘two pages of editorial/advertising’ for every single magazine they stock – i.e. not just ad space, but editorial space, surreptitious features that plug their brand. In addition, Asda states the shelf space given to suppliers should be subject to a ‘space contribution’ fee of £10,000, an extra £2,500 ’space’ fee to be paid for every new store Asda opens, as well 2% of the magazine supplier’s total business in their stores, to be paid on a quarterly basis (amongst several other small fees and demands). 

Put simply, they want blood. 

Now ‘want’ doesn’t always get, and Asda have already rowed back on their demand for ‘editorial’ space after the memo created a mini media furore, but if their approach is followed by other UK supermarket chains, the commercial magazine sector is facing a harsh winter. This is before you factor in the inevitable effects of the credit crunch on sales figures and brands’ advertising spend, the latter already contracting as a result of the increasing claim Internet advertisers have on marketing budgets.

‘So what?’ you might ask. Well, in such a climate publishers – both medium and small – might wonder whether the pursuit of multiple print display adverts is a viable model in the long term. Wouldn’t it be cheaper and easier to secure more money from a single brand sponsor, preferably one that wouldn’t want to interfere with editorial matters?

Late last year, I interviewed Niku Banaie, then a director at the marketing communications agency Naked, who was convinced that corporate patronage was the future of cultural production, cutting the media buyer out of the economic chain entirely. Niku cited BMW, who commissioned a series of short films starring Clive Owen, directed by leading filmmakers including Ang Lee, Alejandro Gonzalez Innaritu and, er, Guy Ritchie, as part of an Internet campaign. 

The level of product placement in the BMW films, which were made in 2001 and 2002, makes the purpose of the exercise very clear, but Niku argued that ‘branded content’ is becoming more sophisticated these days and the clients less overbearing. 

The second development signalling the shifting economics of magazine publishing, and another good example of this trend, is the launch of a new free title called ‘Susology’, which you may have picked up if you’ve passed through a trendy metropolitan boutique lately. While I’ve only flicked through the digital version of the mag, I can vouch for the quality of the team who pulled it together; the editor, Matt Bochenski, also edits the excellent indie film magazine Little White Lies, and its first issue features contributions from BAD IDEA contributors Jean Hannah Edelstein and Ed Hogan.

What’s not immediately apparent from reading Susology though, is that it is entirely funded by Suso, a new carbonated juice brand set up by former Red Bull managing director Harry Drnec. Suso is launching with a marketing budget of £4 million, of which a very small portion will have gone to Susology, although the magazine features prominently on the product’s website. 

While it’s not clear if Susology is a one-off exercise in stealth marketing or a long-term magazine project, its very existence poses interesting questions.

If Suso, as patron, is relaxed about the editorial direction of Susology, does that make it less credible than other independent publications, especially those who run covert ‘advertorial’ features? And what responsibility should brands like Suso have to flag their involvement in cultural projects like this? The ethics in this changing economic landscape are unclear. 

On the one hand, direct, singular brand sponsorship could liberate publishers from their traditional dependency on retailers and media buyers. On the other, the publishers of such magazines are open to accusations that they are betraying the trust of their readers, especially when the brands who support them are making a conscious effort to hide their involvement.    

So, an entirely cynical exercise, or the future for magazines with integrity? I’d be interested to know your thoughts. 

Posted by Jack Roberts in Creative Economy | August 3, 2008 7:01PM |