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Catching Newsstand Fever

Tara Roberts remembers seeing Seventeen and Teen in high school and feeling as though neither magazine represented her. "I was tired of reading about how to get slim or get a man," she says. Roberts believed she could do better. So, in the summer of 2003, after learning the ropes and working at women's magazines for a decade, Roberts poured her heart, soul, and cash into the launch of Fierce -- a magazine with the tagline, "For women who are too bold for boundaries."

In June, 2004, after only four issues and burning through $175,000, Fierce published its last edition, unable to bring in enough ads to cover the costs. Roberts is now looking for a strategic partner in hopes of reviving it.

WEB'S BITE. Roberts' experience is poignant, but hardly unusual. The magazine business remains alluring for many entrepreneurs, but with recent ad slumps and a proliferation of media outlets, it's more treacherous than ever. "The rule of thumb is that 80% of the new magazines fail in the first two years," says Chip Smith, vice-president at Kable Distribution Services, a New York City-based comaany that delivers more than 650 titles to 130,000 outlets in the U.S.

Even the biggest and most-established news magazines are starting to worry about their own survival, as a larger chunk of ad dollars leaves print for online. This year, the Magazine Marketing Coalition launched a three-year, $40 million multimedia campaign to demonstrate the power of magazines to the advertising community, and the Magazine Publishers of America has hired brand-building firm HotSpring and ad agency Fallon to formulate strategies for luring advertisers back.

But the rash of seemingly bad news hasn't shattered the aspirations of those who want to start magazines. In 2004, new magazines numbered 1,006, up from 953 in 2003 and the first time since 1998 that new titles totaled more than 1,000, says Samir Husni, chairman of the journalism department at the University of Mississippi. The pace hasn't abated this year -- 236 magazines launched in the first quarter.

"NARROW-CASTING." Part of the boom derives from an old phenomenon: What entrepreneur wouldn't love to see his or her name as editor or publisher emblazoned on the inside cover of a magazine? And now, the barrier to entry, at least from a technology standpoint, has never been lower, with sophisticated publishing software and high-speed Internet connections commonplace.

Combine that with Americans' greater discretionary income to spend on leisure, which allows them to more fully cultivate interests, from cooking to coin collecting, and you have a trend. "I call this phenomenon narrow-casting, where people want to know more about just one subject, and they either flip to a TV channel that offers that information or pick the magazine that does," Husni says. "I mean, you have tons of new magazines on fishing, a magazine for landscaping, even furniture painting -- you name it, and we've got a magazine for it."

Last year saw the launch of 125 new magazines on crafts and hobbies, 83 on specific geographic regions, 59 on home design and services, 57 on sports, and 41 on different types of cars. The latest craze: "There have been eight poker magazines launched in just the past six months," Smith says.

The O FACTOR. To stand out on an increasingly crowded newsstand, however, startup magazines have had to get creative -- in both subject matter and marketing techniques. SchoolSports, for example, has found a loyal readership of 650,000 nationwide with its 15 regional editions, covering high school sports across the country (see BW Online, 5/31/05, "The World of SchoolSports"). Soon-to-be-released Pink is hoping to gain an edge via promotional partnerships with CNN, Sam's Club (WMT), and others (see BW Online, 5/31/05, "Will Women Think Pink?").

Many editors and publishers have been inspired by recent industry success stories like O, The Oprah Magazine, which first hit the newsstands in 2000. But few startups carry the clout and brand recognition of namesake Oprah Winfrey, which explains why the industry sees hundreds of Fierce-type failures for every successful O.

It's a telling comparison in an increasingly corporate industry. Experts estimate that 90% of all new magazine launches are independent and cover niche subjects, usually stemming from their founders' personal interest, but only 10% survive. In contrast, about 90% of new magazines from big publishing houses make it. O, for example, has the support of not only Winfrey but also media powerhouse Hearst, publisher of Cosmopolitan, Esquire, and Harper's Bazaar, among other titles.

HIGH ANXIETY. While marketing, advertising, and distribution heft comes naturally for titles launched by Time Inc. (TWX) or Conde Nast, small independent magazine publishers are usually bootstrapping operations that have a high likelihood of failure. Often, they spring from people with a passion for the subject -- but not the funds or business savvy to run it long term.

Just ask Darren Ressler, editor and publisher of Big Shot, a music magazine he launched in May, 2003. A music aficionado, Ressler put his own money in the publication that he runs from a small space in Brooklyn, N.Y. He spends sleepless nights worrying about adding to his circulation of 40,000, landing more ads, maintaining his current advertisers, and making the next big vendor payment.

"I don't expect to start making money until my fifth year," says Ressler, who edited another music magazine that shut down in January, 2003. Until then, he's gradually bringing in big advertisers like Toyota (TM) and Heineken, and attempting to build a grassroots buzz by sponsoring club nights in cities like Chicago.

INDIE EXCEPTIONS. For most magazines, it does indeed take at least five years to show a profit, and most simply run out of money before then. Like many entrepreneurs with big ideas, fledgling editors often don't have the nuts-and-bolts business acumen to run a magazine for the long term. Fierce's Roberts now admits that her lack of business skills was her Achilles' heel. "The next time around, I will definitely hire more businesspeople," she says.

That's not to label indie success unattainable. Among the recently notable winners are Dwell, a modern home and architecture title launched in 2000, and Budget Living, a guide to managing well on a shoestring that got its start in 2002.

Both magazines came from entrepreneurs who saw that the market lacked what they wanted. Lara Hedberg Deam got the idea for Dwell when she set out to build her own home and couldn't find an architecture magazine that addressed her needs. "All I found was high design rather than an authentic home you would like to live in," Deam says.

PASSION PLUS PRACTICE. So, the San Francisco-based Dwell presents architecture in a lively, simple form and offers readers advice on incorporating similar design into their own homes. The magazine turned a profit in 2004 and has seen circulation rise to 250,000, while also claiming a National Magazine Award in April. Budget Living, conceived by Donald Welsh, who also founded the successful Budget Travel and sold it in 1999, now boasts a circulation of more than 500,000.

Despite her success with Dwell, Deam admits it has been -- and remains -- a learning experience. She recounts the challenges of persuading people to join a startup magazine during the Internet boom and getting advertisers to stay on after the Internet bust. "I guess my passion spoke for itself, and I combined that with hiring talented people from the publishing world," she says. Wise words for hopefuls to learn from.

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