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The old-fashioned, non-commercial, thriving Economist

The old-fashioned, non-commercial, thriving Economist

While most news publications seem to be facing financially touch times, the Economist is sailing on remarkably smooth waters. The publication has posted record profits over the last four years, Reuters reported, and contrary to the trend at most papers, its circulation kept growing during the second half of 2011.

As the Editors Weblog noted last November, more than 100,000 of the Economist's subscribers are digital readers - a notable achievement in convincing online readers to pay, although still dwarfed by the 1.49 million print readers.

But what is perhaps most remarkable about the magazine's growth is its rapid speed. Reuters noted that it took 161 years for the Economist to break the 1 million subscribers milestone, in 2004 (the paper was founded in 1843). Andrew Rashbass, Chief Executive of the Economist Group, told Reuters that he expected the Economist to reach 2 million readers within five years.

How has the magazine succeeded in maintaining such an impressive growth? Simply put, by having solid revenue model and offering content that is seemingly non-commercial by nature but for which people are willing to pay.

As mentioned, the Economist has made record profits over the last four years. The latest numbers are from the fiscal year that ended at the end of March 2010, for which the company reported a 9-percent increase in revenue. The results for the most recent fiscal year will be published in June.

Reuters credits such strong growth partly to relatively high subscription prices, which form a solid base for revenue. As only about 30 percent of the publication's revenue comes from print advertising, the Economist Group is less dependent on advertising money than many other magazines.

However, the revenue model is only one part of the success. Also the Economist's "uncommercial", or what Martin Walker, head of a magazine consulting firm Walker Communications, called "contrarian" approach is an important factor. It explains how the paper has been able to build up its reader base during a time of across-the-board loss in readership within the industry.

For instance, unlike many of its peer publications, the Economist does not plan to produce more video content. "In contrast to U.S. companies that are looking to broaden their revenue streams through video and social media, The Economist wants its content to stand out even more as exceptionally high quality and worth paying for," the Reuters article quoted Reed Phillips, Managing Director of DeSilva & Phillips.

Explaining the magazine's approach to reporting, Rashbass described it as bringing elite media to the masses: "There's a huge opportunity for people to be challenged by the media," he said.

This line of reasoning is akin to recent developments at Salon, which saw a notable increase in pageviews after it began publishing fewer articles, concentrating instead on in-depth, "old-fashioned" reporting.

That's two news outlets succeeding with this recipe. Would that be a formula for others to replicate?

Source: Reuters


Teemu Henriksson


2012-02-20 09:35

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