March 21, 2011

US Postal News Postal Service, APWU agree to four-year-plus contract ...... 1 BofA, Verizon CEOs should push for postal reform, regulator says ...... 2 Book/Directory Industry News Macmillan to sell e-books through Diesel eBook store...... 4 Catalog/Retail Industry News Williams-Sonoma record earnings growth a good economic sign ...... 5 Golden Gate sells J. Jill ...... 5 Chicago is Walmart's kind of town ...... 6 Direct Marketing Industry News DMA releases Quarterly Business Review (QBR) for Q4 2010...... 7 Magazine Industry News Conde Nast: Every magazine will go digital...... 8 Kang to oversee Hearst content extensions...... 9 The Week grows as other newsweeklies lag...... 10 Hearst Magazines is 2010 Group Publishers' ad-page champ...... 12 Dennis buys bimonthly trivia magazine Mental Floss ...... 14

ECONOMIC UPDATE GDP: (Revised) 2.8% in Q4 2010 (up from 2.6% Q3 2010) (Next Release March 25) Unemployment Rate: 8.9% in February 2011 (down from 9.0% in January) Consumer Confidence: 70.4 in February 2011 (up from 64.8 in January)

US POSTAL NEWS

Postal Service, APWU agree to four-year-plus contract (DM News – March 14, 2011) Original Link: http://www.dmnews.com/postal-service-apwu-agree-to-four-year-plus- contract/article/198311/#

The US Postal Service and the American Postal Workers Union tentatively agreed to a new four-and-a-half- year contact on March 14. The deal, which would run through May 20, 2015, includes a 3.5% wage increase over the life of the contract, with the first raise taking effect in November 2012.

The deal must be approved by both the APWU's rank-and-file bargaining committee and its general membership. The USPS said it expects the union to ratify the agreement, which would affect about 205,000 clerks, mechanics, vehicle drivers and custodians, within two months.

“The last time, in late 2006, it took about five weeks,” said Sally Davidow, senior manager of communications at the APWU.

1 The USPS reported a net loss of $451 million in January, when it also cut work hours by 3.3%. The Postal Service also saw a net loss of $8.5 billion in its 2010 fiscal year, which ended September 30, 2010. The USPS has said the prefunding of retiree health benefits costs it $5.5 billion per year and has urged Congress to address the issue.

The contract with the APWU also includes limited long-distance reassignments, changed wages for new employees and increased workforce flexibility, according to the union.

The Postal Service's negotiations with the National Rural Letter Carriers' Association came to an impasse last November at the end of their last contract. The two sides are “still talking,” said Mark Saunders, PR representative for human resources, labor and stamps at the USPS.

The USPS will begin negotiations with the National Association of Letter Carriers and the National Postal Mail Handlers Union about 90 days before their contracts expire this November. The NALC represents mail carriers in metropolitan areas, while NPMHU employees work in mail processing plants and post offices.

BofA, Verizon CEOs should push for postal reform, regulator says (Bloomberg – March 17, 2011) Original Link: http://www.bloomberg.com/news/2011-03-18/bofa-verizon-ceos-should-push-for-postal- reform-regulator-says.html

The U.S. Postal Service, which says it may run out of cash, needs chief executive officers of companies like Bank of America Corp. (BAC) and Verizon Communications Inc. (VZ) to convince Congress to provide long- term relief, the agency’s regulator said.

President Barack Obama, in his budget proposal, proposed deferring $4 billion of a benefits payment this year and refunding some surplus pension payments. If executives from banks, utilities, publishers and other large users of mail services push lawmakers, there will be a better chance of adjusting the amount than if just their trade groups do, Postal Regulatory Commission Chairman Ruth Goldway said.

“That’s what we need,” Goldway, 65, said yesterday in an interview at Bloomberg’s Washington office. “The associations are very valuable, but that’s not what’s going to make the difference now.”

The Postal Service, which had a loss of $329 million in the quarter ended Dec. 31, is seeking legislative changes to ease $5.5 billion of annual payments it must make into a fund for future retirees’ health benefits. Without the changes, it says it will dry up cash by September and reach borrowing limits.

Representatives of Bank of America, the biggest U.S. lender, and Verizon, the second-largest U.S. phone company after AT&T Inc., declined to comment.

CEOs helped get the Postal Accountability and Enhancement Act passed into law in 2006, making it easier to raise rates, Goldway said. Top executives at Hearst Corp., Time Warner Inc. (TWX), Pitney Bowes Inc. (PBI) and banks were among those who personally pushed for the law to go through, she said.

The ‘Hurdle’

2 The 2006 law also created the requirement of paying $5.5 billion a year for future retirees’ health benefits to set up a $50 billion fund.

That requirement should be lower, based on the agency’s shrinking workforce and current calculations for medical inflation rates, Goldway said.

The Postal Service and its allies would have to convince Congress, including Representative Darrell Issa’s House Oversight and Government Reform Committee, which Goldway called “the hurdle.”

Issa, a Republican from California, and Representative Dennis Ross, the Florida Republican who runs the panel overseeing the Postal Service, became chairmen of the respective committee and subcommittee when their party took control of the U.S. House in January.

Appropriate Term?

“They’ve expressed skepticism and tend to use the word ‘bailout,’ which the rest of us don’t think is an appropriate term in this situation,” Goldway said.

Spokesmen for Issa and Ross didn’t respond to e-mail seeking comment.

The Postal Service is seeking to transfer money it overpaid for federal pensions to an account it’s required to fill to cover health-benefit costs for future retirees.

The amount of overpayment into two separate funds is in dispute, with the Postal Service’s Office of Inspector General setting the amount for one fund at $75 billion and the regulatory commission estimating $50 billion. The U.S. Office of Personnel Management, the postal inspector general and the postal service agree that that overpayment into another fund totals $6.9 billion.

The service has a borrowing limit of $3 billion a year and a total cap of $15 billion.

Cutting Saturday Delivery

The agency has asked Congress and its regulator for permission to cut Saturday mail delivery, shutter post offices for financial reasons and to raise postal rates faster than normally allowed.

The Postal Regulatory Commission will issue a non-binding recommendation as soon as next week on whether the Postal Service should be allowed to reduce mail delivery to six days a week. Goldway, who has spoken against cutting Saturday service, said her opinion “hasn’t changed.” Federal law, which mandates mail delivery six days a week to all U.S. addresses, would have to be changed for Saturday service to be cut.

“I still believe there’s a strategic advantage for them to have Saturday delivery,” Goldway said, citing United Parcel Service Inc. (UPS)’s use of the Postal Service for Saturday deliveries.

The agency may not realize the benefits of projected cost savings by eliminating a day of delivery because it would probably lose business at the same time, she said. The postal service estimates it would save $3 billion a year by eliminating Saturday deliveries.

Push From Home 3 Corporate executives who take the time to push postal changes in Washington are effective because they represent jobs in lawmakers’ districts, said Jerry Cerasale, senior vice president of government affairs for the Direct Marketing Association. The New York-based group’s board includes CEOs of Publishers Clearing House and Quad/Graphics Inc., a Sussex, Wisconsin-based printer of magazines including Oprah Winfrey’s “O” and “Good Housekeeping.”

“It’s the economy within their district or state,” Cerasale said in a telephone interview. While the associations have “great relationships” in Washington, “it always helps to have some push from back home,” he said.

BOOK/DIRECTORY INDUSTRY NEWS

Macmillan to sell e-books through Diesel eBook store (Book Business – March 10, 2011) Original Link: http://www.bookbusinessmag.com/article/macmillan-sell-e-books-through-diesel-ebook- store/1#utm_source=bookbusinessmag.com&utm_medium=home_page&utm_campaign=today-in-book- publishing-tab

Macmillan has partnered with the Diesel eBook Store to sell its titles directly to the public through Diesel's Web-based bookstore.

Through this partnership, Diesel will store Macmillan's digital titles on its own servers and provide fulfillment and encryption on orders through Adobe Content Server 4—up to this point, Diesel used a variety of third- party e-book distributors for encryption and fulfillment. A new proprietary PubDesk interface, through which Macmillan can access its inventory, run reports and modify its metadata, has been created and will launch shortly.

The Diesel eBook Store originally launched in December 2004. In December 2010, it launched a new e- book retailing platform that includes features such as a "Deal of the Day," social networking, video integration, access to more than 2 million free e-books via partnerships with Google and Smashwords, and an improved search engine.

4 CATALOG/RETAIL INDUSTRY NEWS

Williams-Sonoma record earnings growth a good economic sign (Retailing Today – March 15, 2011) Original Link: http://www.retailingtoday.com/article/williams-sonoma-record-earnings-growth-good- economic-sign

In what can only be a sign that the economic health of the country is improving -- at least for higher-income consumers, Williams-Sonoma announced that net revenues for the fourth quarter of 2010 increased 9.7% to $1.195 billion versus $1.09 billion in the fourth quarter of 2010, including Internet net revenue growth of 27.2% and a comparable-store sales increase of 5.2%.

Diluted earnings per share on a GAAP basis were $1.05 for the quarter compared with 81 cents for the same period last year.

Laura Alber, president and CEO, commented, “Fiscal 2010 was a record earnings year for Williams- Sonoma, Inc. Each of our brands is stronger today than a year ago and we made substantial progress on our longer term growth and profitability initiatives. We are particularly pleased with the progress we made in merchandising, marketing, customer acquisition, and customer service, as it is these competitive advantages that allowed us to attract new customers to our brands and gain profitable market share all year, including Internet revenue growth of 27%.”

Going forward, Alber said she expects growth in the company's e-commerce business.

"In fiscal 2011, we expect e-commerce to once again be our most profitable and fastest growing channel. As such, our direct-to-customer segment is expected to reach 43% of total company revenues in fiscal 2011 versus 41% in fiscal 2010."

Williams-Sonoma reported that net revenues for the 2010 fiscal year increased 12.9% to $3.5 billion versus $3.1 billion last year, including Internet net revenue growth of 26.9% and a comparable-store sales increase of 9.8%. Diluted earnings per share on a GAAP basis were $1.83 compared with 72 cents for the same period last year.

For fiscal 2011, the company is expecting non-GAAP diluted earnings per share increasing in the range of 8% to 12% and net revenues increasing in the range of 4% to 6%.

Williams-Sonoma's strong fourth quarter and full year results are a good indication that consumers are feeling more confident and discretionary spending is up.

Golden Gate sells J. Jill (Multichannel Merchant – March 17, 2011) Original Link: http://multichannelmerchant.com/crosschannel/news/golden-gate-sells-j-jill-0317/#

Less than two years after it acquired J. Jill, private equity firm Golden Gate Capital announced today it has sold a majority stake of the women’s apparel merchant. The buyer is Bahrain-based global investment firm Arcapita Bank, which paid an undisclosed amount. 5 Golden Gate will remain a minority shareholder in the company, according to a statement, and J. Jill president/CEO Paula Bennett will continue to lead the Quincy, MA-based cataloger/retailer.

J. Jill has been passed around a lot in the past five years. Apparel merchant The Talbots bought it for $517 million in 2006, and put it back on the market in late 2008. Golden Gate Capital acquired all of the J. Jill assets in June 2009 for a mere $75 million.

Why is Golden Gate shedding J. Jill now? The timing might be right: Although it’s been a difficult climate for specialty retailers, Neil Stern, a retail analyst and senior partner for consultancy McMillan Doolittle, says the sector is looking attractive again—particularly to private equity investors as the economy recovers.

What’s more, while Talbot’s had focused on increasing J. Jill’s store base, “J. Jill’s business improved markedly during Golden Gate’s ownership, most likely weighted in growth in the catalog and online business,” says Chris Kampe, managing director with investment firm Tully & Holland. This is allowing Golden Gate “to exit with a healthy return,” Kampe says.

What is Arcapita likely to do with J. Jill? "I’m not sure that they are bringing anything earth-shattering to the table, other than their capital," Kampe says.

As with most private equity buyers Arcapita will probably offer an incentive plan that provides management with enormous potential rewards for growth and successful exit in the future, Kampe says. The firm will also likely provide “an organized planning process that refocuses the target company on key value drivers, such as operational efficiencies and aggressive growth,” he says.

Arcapita focuses on acquiring companies in the $300 million to $1 billion transaction size range, Kampe says. He believes Arcapita will support J. Jill’s current management team’s growth strategy and probably seek to exit at a higher price in three to five years.

Meanwhile, Golden Gate is also trying to sell Orchard Brands, a conglomerate of 17 catalogs that target mature consumers. Orchard Brands, which had filed for Chapter 11 in January, is expected to emerge from bankruptcy sometime in April.

Chicago is Walmart's kind of town (Retailing Today – March 16, 2011) Original Link: http://www.retailingtoday.com/article/chicago-walmarts-kind-town

Walmart has succeeded in bringing its smaller format store concept to Chicago, helping to make the case that the retailer can find success in more urban markets, including New York, which has thus far eluded the retailer. The company announced that it has secured locations in West Englewood for a Walmart Market and Walmart Express store. According to the company, West Englewood is in the heart of a food desert and one of Chicago’s most underserved communities. <

In addition to the West Englewood Market and Express stores, opening in the spring and winter of 2012, respectively, Walmart's Chicago plans include the opening of a supercenter in Pullman and another supercenter and Express store in West Chatham.

According to Walmart, the company's investment in Chicago will result in 10,000 jobs in the city by 2015. 6 “When I met with Walmart last year, I encouraged them to take an approach that addressed the needs of the urban shopper if they truly wanted to make a difference in our underserved neighborhoods,” said Chicago Mayor Richard Daley. “Today, it appears that Walmart has done just that by creating smaller urban store formats that will better serve our communities. I applaud their leadership in creating jobs and providing retail and grocery services in areas of the city that need it most.”

The Walmart Express stores will be less than 30,000 sq. ft and will focus on a broad assortment of brands at everyday low prices, selling grocery, pharmacy and limited general merchandise, the company reported. Walmart Market – previously called Neighborhood Market – will range in size from 30,000 to 60,000 sq. ft. and provide a wider assortment of fresh grocery, as well as a bakery and delicatessen.

“Mayor Daley has been a champion of economic development in the city and his support of Walmart through the years has allowed us the opportunity to do what we do best: open stores that create jobs and offer a broad assortment of products at everyday low prices,” said Julie Murphy, Senior Vice President, Walmart U.S., who is based in Chicago. “Moving forward, we will continue to identify sites in Chicago’s food deserts, while also looking for opportunities to help even more Chicagoans save money and live better.”

DIRECT MARKETING INDUSTRY NEWS

DMA releases Quarterly Business Review (QBR) for Q4 2010 (Whattheythink.com – March 14, 2011) Original Link: http://whattheythink.com/news/49668-dma-releases-quarterly-business-review-qbr-q4- 2010/?utm_source=whattheythink&utm_medium=rss&utm_campaign=rss

The Direct Marketing Association (DMA) today released its Quarterly Business Review (QBR) for the fourth quarter of 2010. DMA partnered with Winterberry Group, a leading strategic management consulting firm that helps advertising and marketing companies build shareholder value, on this report.

In Q4 2010, the marketing and advertising community continued with modest but steady improvement in all key economic performance measures. Revenues, investment, staffing levels and bottom-line profitability all rose from the previous quarter.

“Once again, digital media received the bulk of new investment, with email and social media leading the way” said Yoram Wurmser, director of marketing and media insights for DMA. “That said, marketers reported increased spending in every medium we track. This points to a broad-based recovery in the marketing industry.”

"The main conclusion we can derive from the fourth quarter data really has little to do with holiday-season spending or marketers' preparation for this new year," said Jonathan Margulies, a vice president at Winterberry Group. "Instead, the continuing acceleration of marketing investment and payback represent a capstone achievement for an industry that faced crisis conditions no more than 15 months ago. To wrap up

7 a year that brought great economic improvement with yet more signs of optimism portends good things ahead for marketers and the supplier community in 2011."

Key findings include:

- A majority (54.7 percent) of marketers reported an increase in revenue generated from direct/digital marketing activity compared with the same quarter last year (SQLY).

- Marketers and suppliers are optimistic about their near-term profitability, with a majority of marketers (53.5 percent) and nearly half of suppliers (46.1 percent) projecting improved performance during the first quarter of 2011.

- Marketers reported “general demand for digital marketing investment/activity” as the most significant driver of marketing investment in Q4, in contrast to previous quarters, when the leading answer was “availability of improved data analytics tools and processes.”

- Despite the overall positive performance by marketers, job growth remains slow. 67.1 percent of marketers and 51.7 percent of suppliers, respectively, indicated that their staffing levels remained unchanged during the fourth quarter as compared to the previous quarter (Q3 2010).

- Digital channels, led by Search, Social, and Mobile, had the largest increases in ROI in Q4.

MAGAZINE INDUSTRY NEWS

Conde Nast: Every magazine will go digital (WWD.com – March 14, 2011) Original Link: http://www.wwd.com/media-news?module=tn#

Not the Apple of His Eye: Conde Nast executive Rick Levine preached to a South By Southwest crowd on Friday night that the growing tablet marketplace will make good business for the magazine industry but one thing remains in the way: Apple's dominance.

"We frankly don’t want Apple to have a stranglehold on this business," he said.

Levine, the director of editorial operations who was recently named the Conde Nast corporate executive of the year, said that publishers need the marketplace as "open and competitive as possible. That’s how we will get scale."

But Levine condeded that "for the foreseeable future, Apple will rule the roost in terms of the marketplace." Apple released its iPad 2 on Friday.

Conde Nast and most publishers have failed to make a deal with Apple to sell subscriptions for its digital magazines on the iPad. Single-copy sales for magazine digital editions have flat-lined in recent months. 8 After Wired sold 100,000 copies for its debut iPad edition in June, sales between October and December dropped to an average of about 23,000, according to the Audit Bureau of Circulations. Levine said subscriptions are necessary.

"That's why we're actively working with all distributors to get a more competitive environment," said Levine.

But Levine was bullish on the business and said that he expects there to be 60 to 70 million tablets on the market within nine months.

"We like this technology so much that by the end of the year every [Conde Nast] magazine will have a digital edition," he said.

Kang to oversee Hearst content extensions (MediaPost – March 14, 2011) Original Link: http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=146653

To help build on existing titles, Hearst Magazines has brought on David Kang as creative director of "content extensions."

In this newly created role, Kang will oversee a department focused exclusively on broadening the presence of individual properties.

"By reimagining the magazines as brands, the content can extend across multiple platforms to create new print books, ebooks, digital tools, mobile apps. ... that work to build and extend Hearst's content franchises," Kang explained to Online Media Daily in an email.

As a result, added Kang, "Hearst has a great opportunity to generate significant new revenue streams and profits by creating new print and digital products -- and selling these products both directly and across other channels to consumers."

From mid-2007 to late-2010, Kang served as senior vice president and general manager of Rodale.com, where he oversaw strategic planning and digital brand extensions, including Eat This, Not That! and The Biggest Loser Club.

Regarding specific Hearst brands in need of a content extension or two, Kang listed Cosmopolitan, Good Housekeeping, Seventeen, Marie Claire, Redbook, Esquire and Popular Mechanics.

"We think the 'content extensions' approach can work very well with each of them, but we're being very sure to partner closely with the editors to understand the nuances of each brand, audience and the value proposition to the consumer," Kang clarified.

Kang declined to discuss specific content extensions, but said that several are underway.

What does the bigger effort mean for advertisers?

"Hearst is deepening its relationships with its audiences, and in each of the content extension products, there will be potential opportunities to integrate advertisers," he explained.

9 Added Kang: "Because many of the new digital tools will be driven by customer data (e.g., preferences on fashion, purchase histories), it will allow advertisers to achieve greater depth within categories, while still offering tremendous scale."

In one instance, according to Kang, Hearst is considering more "branded entertainment." Advertisers may have the opportunity to be fully integrated into content extensions and to focus on specific campaign goals, such as product sampling, product feedback and high potential leads in showrooms.

To support Kang's efforts, Hearst is currently seeking a business development executive. The group will report to John Loughlin, executive vice president/general manager of Hearst Magazines.

The Week grows as other newsweeklies lag (The New York Times – March 14, 2011) Original Link: http://www.nytimes.com/2011/03/14/business/media/14magazine.html?pagewanted=1&_r=1

Somewhere along the line, utility became a bad word at news magazines. And that’s where The Week saw an opening.

While magazines like Time and Newsweek published heavy essays, distinguished guest columnists and artful photo spreads, The Week embraced magazine journalism at its most functional and stripped down.

Small photographs. Graphics with no bells and whistles. One-hundred-word news bites in unadorned prose and synopses of opinion columns, all culled from what was written the week before by other news organizations around the world.

The Week’s formula has worked, and it is testing the tenets of what many editors have come to believe their readers wanted. The Week is both profitable and growing steadily, something few news magazines can claim today. As American newsweeklies remake themselves — Newsweek, the latest example, arrived on newsstands last week with a completely reconfigured look and feel under the leadership of Tina Brown — The Week’s tale is instructive.

The Week earned a profit for the first time last year — $4 million — and is on track to make $6.3 million this year. It just increased its rate base to 510,000, and its total circulation has grown by more than fivefold since it began publishing in 2001, to 520,000 last year.

Traffic to The Week’s Web site has averaged around one million monthly visitors in the final months of 2010, according to comScore, which tracks Web popularity.

That The Week has thrived doing exactly what most weekly news magazines say they think consumers no longer want — giving them a perspective on last week’s news — is surprising enough. But its formula for success may be just as surprising.

Felix Dennis, the brain behind Maxim who also created The Week, borrowed the idea from an unlikely source: the original Time. When Henry Luce and Briton Hadden published Time’s first issue on March 3, 1923, their magazine summarized the news with the stated goal of keeping “busy men” informed. Their template called for 100 articles in each week’s issue, none longer than 400 words.

10 “People don’t want to believe that it can be so easy,” said Isaiah Wilner, author of “The Man Time Forgot,” a book on Mr. Hadden’s unsung role in creating Time.

“By saying less, The Week actually got more into people’s minds, and I think that’s the idea,” he said.

A profit of $4 million is indeed modest. But in an environment where in just the last six months Newsweek sold for $1 and U.S. News and World Report ceased publishing as a printed news magazine altogether, there are plenty of publishers who would happily take that $4 million. (Despite falling circulation and advertising, Time is profitable.)

Critics of The Week complain that its approach to the news is reductive and that its model is essentially a print version of the aggregation done by Web sites like The Huffington Post.

The Week does borrow content liberally. And it piggybacks on the expensive reporting that larger news organizations carry out. But editors at The Week are unashamed about what they are, and their confidence lends a certain verve to their work.

“This is not a coffee table magazine,” said William Falk, the editor in chief, who likened the role of The Week’s writer-aggregators to off-stage producers. (Only the weekly editor’s note carries a byline.) “It’s not one that piles up next to the bed with its beautifully written articles that go on and on forever.”

Mr. Falk said that while The Week relies heavily on the “fair use” doctrine by summarizing copyrighted articles, the magazine is a paying member of The Associated Press and the news services of The New York Times, The Washington Post/Bloomberg and McClatchy/Tribune. (The Huffington Post, too, pays for A.P. content.)

The magazine identifies hot topics from the week before and publishes excerpts from a variety of news articles and opinion columns on each topic. It also excerpts film and book reviews and obituaries. A feature called “Best properties on the market” allows readers to lust after gorgeous homes. A more serious feature called “How they see us” translates reports from foreign publications few Americans would ever stumble on.

The staff is minimal. Mr. Falk leads a group of 18 at the magazine. An additional 15 people work on the Web site.

Editors and writers spend their days combing the Internet. A researcher uses LexisNexis to prepare dossiers on the big stories of the week; it is not uncommon for one to contain 100 articles. Mr. Falk said some 200 news sources are cited in each issue.

“We’re not a legacy magazine that’s trying to adapt to a new era,” Mr. Falk said. “We were born in a new era.”

The Week began publishing in the United States in 2001 after its founder and owner, Mr. Dennis, found success with a version of the magazine in Britain. At the time, few in the media world thought the idea would work. “Is Felix Dennis mad?” The Wall Street Journal asked.

A spokeswoman for The Week said Mr. Dennis was unavailable for an interview because he was busy composing poetry at his estate on the Caribbean island of Mustique. But in response to an interview request, Mr. Dennis faxed a two-page, single-spaced statement that said, in part: “It’s the old tortoise and 11 the hare story, and by golly I’m glad I own the tortoise and not The Daily Beast, however exciting the merger of The Daily Beast and Newsweek must be for all those concerned.” He added: “In the end, The Week will inherit the earth!”

Mr. Dennis revealed another unorthodox business move on Monday, saying he would buy Mental Floss, a magazine that writes about history and trivia with an irreverent flair. It has a small but passionate following that Mr. Dennis hopes he can grow.

The Week's business model relies on subscribers for all but a tiny sliver of circulation revenue. In a typical week it sells only 2,000 copies on the newsstand, or less than 1 percent of its total circulation. Its average annual subscription price last year was about $37, a few dollars more than Time ($31) and Newsweek ($34). The Week has been increasing its price and relying on promotions for two subscriptions for $90.

It creates demand in the advertising market by limiting the number of ad pages it sells most weeks to about 20, eliminating the need to expand or reduce editorial content based on how well the sales staff did in a given week.

“If we sell a bunch of ads, we don’t say, ‘Hey, Bill, go scribble some more of that word stuff,’ ” the magazine’s president, Steven Kotok, said. “And if we don’t sell ads, we don’t start ripping pages out. That’s our contract with readers.” Advertising revenue and circulation revenue are split 50-50, he said.

The Week boasts of its popularity among educated and wealthier readers — the so-called influencer category that advertisers covet. Figures from the Mendelsohn Affluent Survey, a measure of media consumption habits, show that readers have a median household income of $145,000.

Its promotional materials list gushing quotes from the likes of Barry Diller and his wife, Diane von Furstenberg, and Brian Williams. “This is a perfect magazine,” Mr. Diller, now a partner in Newsweek, is quoted as saying. (Told what they had been quoted saying, both Mr. Diller and Mr. Williams said they had not given the magazine permission to use their words to promote The Week.)

Considering the scale that Newsweek and Time once had — and to some extent still have with circulations of 1.5 million and 3.3 million, respectively — The Week’s success seems modest. A question it faces in the years ahead is whether its $4 million profit ever becomes $40 million.

“This is not a multimillion-circulation publication, and that’s where you’re going to hit the profits,” said Mark Edmiston, a former Newsweek president who founded Nomad Editions, a new digital magazine company. “I happen to read it and like it. But it’s not for everyone. And it doesn’t have a mass market appeal, nor do I ever think it will. It’s very difficult to generate a $30 million, $40 million profit when you’re that small.”

Hearst Magazines is 2010 Group Publishers' ad-page champ (MinOnline – March 15, 2011) Original Link: http://www.minonline.com/news/Hearst-Magazines-is-2010-Group-Publishers-Ad-Page- Champ_16666.html

With the explosion of magazine apps, social media and the resurgence of print advertising, magazine brands are showing a prominent face to their loyal and new readers and advertisers. This week’s top 5 chart looks at the group publisher vanguards that had highest ad page gains in 2010 versus 2009. Of the 23 12 magazine companies that we track in min, (13 of which were ad-page plus) Hearst Magazines led with +1,554.03 ad pages with Condé Nast and Time Inc. close behind.

Hearst Magazines

Thirteen out of the 15 Hearst titles tracked by min finished up in ad pages in 2010, which put the company on top. Key catalysts were Food Network magazine (+78.90%), Popular Mechanics (+20.31%) and Harper's Bazaar (+17.65%).

Hearst Magazines president/chief marketing officer/publishing director Michael Clinton gives min an early preview for 2011. “Advertisers are telling us that they are seeing a sustained recovery in their business, and we expect to see that lead to bigger advertising commitments this year. We have an integrated selling model with print, digital and tablet packages, however we are seeing growth in our core print magazines.”

Condé Nast

Brides (+26.57%), Wired (+24.04%) and Vogue (+16.04%) led Condé Nast's 18 measured titles to a cumulative +1,450.33 ad pages in 2010 versus 2009.

“Condé Nast’s ability to provide holistic solutions at a level that is unsurpassed in the industry was key to our success in 2010 and it will be integral to our growth in 2011,” said chief marketing officer,Lou Cona. “We’re a one-stop shop that provides a vast array of assets and services across all platforms, a highly creative branding consultancy and award winning content--a mixture that has resulted in deeper client relationships and larger investments in our company.”

Time Inc.

Of Time Inc’s 20 titles, People StyleWatch (+311.19 ad pages) , InStyle (+199.86) and Real Simple (+199.19) were the biggest winners for 2010. Time Inc. clocked in with a 1,318.24 ad-page gain.

Executive VP/chief marketing officer Stephanie George tells min: "Our advertising and marketing partners continue to believe in the extraordinary vitality of our brands. Our growth reflects our commitment to provide the products, ideas and solutions that span multiple platforms and are instrumental in building our clients’ businesses."

Bonnier Corp.

Of Bonnier’s 21 titles, the Parenting group—Parenting School Years (+23.37%) and Parenting Early Years (+21.50%)--were the company's advertising champions in 2010. Saveur (+18.98%) was a close third.

Says senior VP/corporate sales Mark Wildman: “Bonnier is experiencing real momentum right now. During the past two years, we have definitely seen a shift in the marketplace with clients understanding the power of community. In 2011, we are continuing to push even further into custom-curated content, social commerce, branded entertainment and mobile solutions to drive the brand-building and transaction volume that clients demand.”

13 Hachette Filipacchi Media U.S.

There is much to speculate as to how Hachette’s six remaining titles will fare with their planned acquisition by Hearst Corp. But titles such as Elle Décor (+34.65%) and Elle (+9.81%) showed no doubts in their advertising success for 2010. Hachette took fifth place with +466.49 ad pages.

Dennis buys bimonthly trivia magazine Mental Floss (Folio – March 14, 2011) Original Link: http://www.foliomag.com/2011/dennis-buys-bimonthly-trivia-magazine-mental-floss#

Felix Dennis has bought Mental Floss magazine.

Dennis, founder of Maxim and owner and operator of The Week, is the chairman of Dennis Publishing. Mental Floss is a bimonthly trivia-based magazine founded by Will Pearson and Mangesh Hattikudurin, former students of Duke University, in 2000.

Mental Floss expands beyond the magazine, as the brand includes books like Condensed Knowledge, board games and tee-shirts. According to wsj.com, Mental Floss reaches 100,000 readers.

An exact number was not disclosed, but it’s reported that Mental Floss was purchased for a sum in the mid- seven figure ballpark.

Steven Kotok, The Week’s president said, “Like everything else [Mr. Dennis] does, which seems weird at first, this is starting to make sense to us, too.”

Mental Floss made Inc.’s 5000 fastest-growing private company list in 2009. The publication went public in 2001 and turned its first profit in 2003.

Felix Dennis founded Dennis Publishing Ltd. in 1974. Other Dennis publications also include digital ad- supported mag Monkey and Men’s Fitness. Former Dennis magazines include Stuff and Blender, which folded in 2009.

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