It's barely February as I write this, but already 2008 is making brows sweat in Magazineland. Paper prices are skyrocketing, advertising is sluggish, and recessionary fears loom. Wal-Mart (WMT) booted hundreds of magazines out of its stores, which won't help newsstand sales. Nor will magazine wholesalers' ongoing campaign to reduce the volume of copies they distribute, so that they can increase the percentage of copies they actually sell. "Everything that's going up is not supposed to be going up, and everything that's going down is not supposed to be going down," cracks a mordant senior executive. Plus, oh yeah, that Internet thing. Virtually all publishers are racing to invent or buy digital strategies after previously neglecting that part of the business.
This year's stresses are likely to hit the independent, midsize companies of the sector first. These guys are not huge enough to spread challenges across a business notching north of a billion in revenues, nor can they hide within a parent company's multiple companies, as Hearst Magazines or Time Warner's (TWX) Time Inc. can. But they rely on titles big enough to be exposed to macro advertising trends, to which small, niche companies are relatively immune. Rodale and American Media, which post annual revenues around $625 million and $475 million, respectively, are very different companies in very different situations. But they're both still likely to feel the changes in this year's barometric pressures earlier than their bigger brethren.