Budget Living By The Numbers

Budget Living magazine died, not particularly quietly, on Valentine’s Day.

This follows a moderately illustrious three-year run in which it won Launch of the Year honors at Adweek and Advertising Age (disclosure: As part of a small-team at Ad Age that decided such things, I pushed for Budget Living to win that award) and also won a National Magazine Award for General Excellence. For whatever that’s all worth, that is. Past National Magazine Award winners like the long-defunct Seven Days can tell you how little such plaudits and kudos-from-your-peers mean to the bottom line.

It was an interesting magazine, especially when run by its colorful founding editor/brand embodiment Sarah Gray Miller, who departed abruptly last year. But—well, again, the bottom line thing, especially for independent magazines, and doubly-especially for magazines run by serial entrepreneur Don Welsh, whose business it is to invent and then sell magazines. (He’s done this twice before.)

Kyle at Big & Sharp runs math and wonders why it’s closing. According to his figuring, it took in $1.7 million in ad revenue in its December issue:

From a stricly publishing sense, Budget Living should be doing just fine. I took a look at the numbers:

Circulation: 512,000 (I posted the BPA Worldwide statement here)

1x Full Page Open Rate: $39,375 (Source: BL Media Kit; I posted it here)

Dec ‘05 Issue Ad/Edit Ratio (in %): 43.5/56.5

Projected Dec ‘05 Revenue (Open Rate - 20% x 53.12 [pages])= $1,673,280

That’s not too shabby. For those of you paying attention, the December issue (they didn’t publish their Jan/Feb ‘06 issue — the first sign of trouble) trumped Cargo’s December ad percentage rate by 26.5%. So, what gives?

( … )

Put this in perspective: That’s (on the low side) roughly $17 million annually for their ten issues. And that doesn’t include subscription and newstand revenue to boot.

What gives is this:

1. Assuming Budget Living gets 80% of its stated ad rates is wildly optimistic. 50% is a more realistic starting point. And in the cases of independently-owned magazines that give off a whiff of trouble—like, say, the sudden and simultaneous departure of its top editors and general market repositioning, even 50% may be wildly optimistic. So let’s halve Kyle’s math to get us to around $850,000 in ad revenue for December—and realize that, too, might be kind. And remember that December is reliably one of the most ad-fat issues of the year, if not the fattest outright.

2. Unlike Cargo, Budget Living is not part of Conde Nast, which has deep pockets, revenues measured in the billions, and thus can afford to show some patience with money-losing titles.

3. As with many major magazines, it’s a mistake to assume that Budget Living’s circulation is profitable. Keeping subscribers onboard is a major pain at almost every magazine; “acquisition costs” can easily outstrip how much subscribers pay.

4. Before going under Budget Living announced they were cancelling their January-February issue, which is A. really not a good sign at all and B. a hint that ad sales were lousy.

5. Budget Living had been officially for sale long before late last year and de facto for sale pretty much forever. No takers ever bit.

I’d be surprised if Budget Living was profitable at all when Welsh decided to shutter it.

It was a good magazine, but as the New Yorker of yore, the Atlantic Monthly of today, and about a thousand other magazines can tell you, “good” doesn’t equal “profit.”

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