One of the things I am getting used to, having moved from the UK to the US, is that magazines are free on this side of the Atlantic.

Well, perhaps not free, but certainly very cheap. Magazines offer subscriptions at cheap rates in order to build circulations that they can guarantee to advertisers as the so-called "rate base". Buying magazines on news stands is a very poor financial move because it is so much cheaper to subscribe.

As an example, among the latest magazine offers I have received at home is one to get a year’s supply of Newsweek magazine for $20. That compares with the cover price for a year’s supply of $267 - a handy saving of 92 per cent.

Magazines make a cursory effort to persuade you that you are only getting this rate because you are a special person, but so many discounted offers fly around that this is not very convincing.

Nor, incidentally, was an offer I just received to renew my subscription to Fortune magazine for $65 and have a friend receive a "free" subscription at the same time. The letter from the publisher said this was because I was "one of our most valued customers".

Yes, but a quick search online reveals that Fortune is offering yearly subscriptions to all comers for $29.98 a year. In other words, I would be paying two subscriptions-worth, plus five dollars. If this is how they treat their valued customers, what do they do to the ones they don’t like?

Chris Anderson, editor-in-chief of Wired, has written one or two revelatory posts on the arcane economics and deceptions of US magazine circulation departments on his Long Tail blog. One of them is here. His new book is to be about the economics of giving away things free, which is apposite.

The problem magazines face is that all this marketing and subsidising of subscriptions costs them a lot of money and it is often not covered by the increased amount they can charge advertisers. Indeed, one US magazine publisher told me that he regarded the entire business as virtually fraudulent.

So the trend in the magazine industry, which is as troubled as other forms of print media, is to "lower the rate base" - to cease sending out so many special offers and stop propping up the circulation to such an extent. Time is among the magazines to do so.

All in all, it was quite a surprise to receive a note from The New Yorker saying it had cut off delivery of the magazine because I had not renewed my subscription. I did not think magazines did that kind of thing. I had to write it a cheque for an exorbitant $49.95 for a year’s worth. I even had to pay for a stamp.

I suppose it means The New Yorker is doing OK - or at least better than Newsweek.

January 21, 2008 5:00am in Media | Comment