How Does a Magazine Business Get Money?

2009 magazine revenues totaled $42,870,500.

Magazine companies make money many ways, including through newsstand sales, subscriptions, advertising and online content. In 2009, magazine companies earned revenues of $42,870,500, according to leading industry analysis company IBIS World. Despite the economic downturn of the last several years, magazine readership has remained stable.

Magazine Basics

Magazines offer distinctive content to a variety of readers.

Magazines deliver information on a wide variety of subjects including news, fashion, celebrity gossip, health and fitness and other niche topics. The primary objective of a magazine is to deliver content to readers who are interested in one, or several, of these specific topics. Another objective of a magazine is to connect readers with resources, often other companies, related to their interests. Magazines are able to make money by fulfilling these two objectives through sales and advertising.

Subscriptions and Newsstands

Newsstand sales have a major impact on magazine companies' revenue.

One of the most significant ways magazines make money is through subscription and newsstand sales. Subscriptions involve customers agreeing to receive a certain number of magazines over a set period of time, for a predetermined price. Subscriptions ensure that magazines have customers for an extended period of time. The sale of magazines in locations such as bookstores and newsstands also contributes to a magazine company's revenue. The "New York Times" reported that magazine sales at newsstands totaled $39.3 million during the last half of 2009. Newsstand sales are an integral and profitable part of magazine revenues even though they make up only a small percentage of magazine sales.

Advertising Revenue

Advertising revenue for magazines has increased in recent quarters.

Another way magazines make money is through advertisements, which are placed by businesses for products that cater to the preferences of the magazine's target audience. Advertising space is sold to companies based on factors such as the size of the advertisement and the number of advertisements over a set period. The Publishers Information Bureau reported in October 2010 that there were increases in both advertising revenue and the number of pages of advertisements in magazines from the third quarter of 2009 to that of 2010.

Online Revenue

The Internet has allowed magazines to earn money in new ways.

Today's technology-driven world has led magazines to expand their content to the Internet. Magazines use the Internet to host distinctive and supplemental content to readers. Having an online presence allows magazines to make money through online advertising. Much like print advertisements, online advertisements can be placed on a magazine company's website by a company that wants to reach that magazine's market. Magazines also make money online by offering members-only content that is available for a fee.

The Future

In the future, magazines will make money in new ways.

A 2008 study by the Project for Excellence in Journalism concluded that in the future the Internet would be a valuable resource for magazines to increase revenues. Magazines, however, are still evaluating how best to use new technologies in combination with old publishing traditions. Magazines will continue to make money through sales, print advertising and online content until consumers desire new ways of receiving information and advertisers demand a new way of marketing goods and services.

References

• "New York Times: Newsstand Sales and Circulation Fall for Magazines"
• "Folio: MRI: Magazine Readership Remains Stable"
• "New York Times: Magazine Publishers See Future, But No Profit, in Shift to Internet"
• Project for Excellence in Journalism: "Online Trends"
• IBIS World: Magazine and Periodical Publishing