The Economist Lifts Its US circulation By 15.6% And Increases Its Ad Pages By 13.3% While Time’s Circulation Drops 17.1% and Ad Pages Are Down 2.4%, So Is The Right Question “What Are The Brits Doing Right?” Or Is It “What Are The Yanks Doing Wrong?”

Philip M. Stone August 15, 2007

The Economist and Time Magazine had a few things in common at the beginning of the year – both titles raised their newsstand price by $1 – Time to $4.95 and the Economist to $5.99 – Time joined the Economist in publishing on Fridays so readers had the magazine at home over the weekend, and both focused on an editorial product that included exclusive commentary and analysis that readers wouldn’t find on the Internet. But there was no similarity on the results after six months.

The Economist continued its upward trend of past years. Circulation was up a total of 15.6%, with newsstand sales up 10.6%, through June for a total circulation of 694,345, of which 60,877 were at the newsstand. But over at Time the story was very different. Circulation dropped 17.1% to 3.4 million. True, Time has been chipping away at unprofitable circulation and at the beginning of the year it instituted a 19% rate base, guaranteeing 3.25 million sales from its previous 4 million plus. Even so that big a circulation fall was a shock, it was the biggest fall for any magazine in the top 25 circulation bracket, and it is now has only about 1.2 million more sales than Newsweek where circulation was flat at 3.1 million over the period.

On the financial side the Economist increased its ad revenue by 30.4%, from $40.6 million last year at this time to $53 million this year. And its number of ad pages grew 13.3%, from 1,060 to 1201. But at Time, ad revenue dropped 14.6%, from $295.6 million to $252.5 million, and pages were down 2.4% from 1,035 to 1,010, which goes to explain why the employee culls continued this year.

The Economist actually had more ad pages than Time but Time’s rate card is, of course, much higher than the British weekly’s. A four-color one page ad in Time has a rate card of around $241,000 whereas in the Economist that same ad would run for around $48,000. Indeed look at the financials and Time’s revenue is more than four times that of The Economist, and there’s not going to be any crossover for many a year to come, but it is rather startling how two news weeklies can have such different results.

In a recent interview with Talking Biz News, the Economist’s North American publisher, Paul Rossi, explained that he thought the magazine’s “unique editorial quality” has made it into a hit with Americans. For Rossi, the Economist is not just a news magazine competing with Time and Newsweek, but it’s also a business magazine competing against the likes of Business Week, Fortune, and Forbes. Could it be canny Americans are saying to themselves why buy a news weekly and a business magazine when the combination is available in The Economist?

He admits the magazine has been on a marketing blitz, expanding retail outlets, adding a printing plant, running city-focused initiatives, but at the end of the day he says Americans are coming to appreciate the Economist “as a unique product that more and more people want.” He believes the Economist’s analysis of world events “cannot be found in standard newsweeklies or business publications.”

What also is probably working in his favor is that Americans are taking a liking to British journalism. The Times and The Guardian, for instance, report they have more American readers to their web sites than they do British. “I believe readers in the US welcome our witty and irreverent style; they see our British perspective as refreshing,” Rossi said.

As for Time it must reexamine its marketing. For instance did it work to examine the postcodes for wealthy subscribers and for about 800,000 of those subscribers insert additional features monthly on such subjects as travel, fashion, and leisure with the luxury goods trade biting? Has the Friday publication day helped in allowing leisurely weekend reading – there’s a lot of competition for that leisure time, for instance,  from the Saturday edition of the Wall Street Journal,  and what answers does it have to the still declining spend by automakers?

It has purposely has cut back on its bulk sales to doctor offices and the like, and indeed that is responsible for some 225,000 of the circulation drop, but that’s only about one-third of the total circulation loss.

It will also want to check if the editorial product is actually what people want. Research told editors that people aren’t interested in what happened over the past seven days – the Internet, television and print has that covered pretty well -- so the natural focus it to look forward – what might happen in  the next seven days combined with plenty of analysis and opinion.  That’s quite a change when one remembers that it wasn’t that long ago that newsweeklies never even had bylines (The Economist still doesn’t).

But all of these circulation numbers pale in comparison to AARP, The Magazine, that is aimed at the aged 50+. It has the world’s largest circulation at more than 23 million, and a total readership of 31 million. In the readership stakes, incidentally, People Magazine stands tall. It circulation may only be 3.8 million, but at more than 11 readers per copy its readership audience is said to be more than 42 million.

Magazines, overall, saw their circulations stay pretty stable so far this year as compared to last year, something their newspaper cousins would love to be able to say, too, but they can’t.

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