Hartford-based Marketing Resource Consultants and West Hartford’s Life Publications will be joining forces to publish Hartford Magazine, a glossy lifestyle magazine, and are double-teaming their sales staff to increase advertising revenues.
They’ll need it.
After four years of producing the glossy Hartford monthly, Marketing Resource Consultants last week agreed to hand over publishing rights to Christopher White’s Life Publications, which produces 13 monthly feel-good town newspapers. The move came after months of reports of financial problems at Marketing Resource Consultants, and after Life Publications shuttered its Connecticut Life newspaper in February.
But the question is: can a plan that dramatically ratchets up expenses, cuts some revenue lines, and places the publication at the mercy of just one income stream succeed? Especially when the new product is effectively a chimera of two distressed publications.
Michael Guinan, president of Marketing Resource Consultants, and White say they will double-team their sales staff to increase advertising revenues. But that move does nothing to pare expenses at either organization. Meanwhile, in an effort to bring more value to advertisers, the co-publishers say they’re significantly boosting circulation, from roughly 40,000 copies per month to a reported 80,000 per month.
On a back-of-the-envelope basis, the magazine will need to produce between $100,000 and $120,000 per issue just to pay for its printing and mailing. That doesn’t even cover the cost of turning the lights on.
Samir Husni, journalism chair at the University of Mississippi, estimates they will need at least $1.2 million in hand or a line of equity credit just to cover the costs of printing and mailing for the next 12 months.
The average cost of a magazine to print 80,000 copies runs about $100,000 per issue, and an additional $20,000 is needed to pay for mailing per issue, he said.
Husni said a healthy magazine would be running at 60 percent advertising. So a 100-page publication would have 60 ad pages. But a recent 116 page issue of Hartford Magazine had only 40 ad pages — a paltry 34 percent.
In magazine publishing, too, not all ad pages are paid for. Some are done on trade with arts organizations, restaurants and others. Still, giving Hartford Magazine full credit for all its ad pages, its new owners will still have to double its advertising to get it up even to industry average.
“To break even,” said Husni, “you need to bring in at least $2 million in advertising revenue annually.”
Regardless, White is confident about potential success. Acknowledging that publishing the glossy magazine is a large financial undertaking, he said, “It works financially, and we anticipate that we will break even. It is not to be an expensive hobby.”
Guinan asserted the joint effort will offer both publishing companies immediate financial returns.
“It is going to be very strong out of the gate because it is not a start-up scenario. We have discussed the opportunity with several advertisers and there has been nothing other than excitement about the enhanced product.”
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Red Flag
In the merger deal, White purchased the right to publish Hartford Magazine, but did not assume any of the magazine’s debt. It has been reported that payments to the magazine’s freelance contributors lagged by several months.
Husni speculates that most magazine publishers would not sell the licensing rights to another publisher if the publication were making money.
“Double the circulation and you don’t increase the ad rate? There is something fishy about that. But people go into magazine publishing for lots of reasons: I call it the three Fs: for the fun of it, for the fame of it, and for the fortune of it. It is that fortune that always escapes a lot of people.”
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Advertisers Like It
At first blush, Tom Trella, vice president and media director of Cashman & Katz Integrated Communications, a Glastonbury-based advertising and public relations firm, said the increased circulation will be attractive to advertisers.
“Advertisers are buying eyeballs — how many people are exposed to your ad message,” Trella said. “The audience delivery is always the most important thing you look at whenever you consider purchasing advertising space.”
Marcia Williams Olsson, manager of business development for Hartford Hospital, is “thrilled” with their agreement. Hartford Hospital has purchased full-page ads in Hartford Magazine since its launch four years ago.
“Both Life Publications and Hartford Magazine totally reach our target, and the circulation increase would be a bonus,” Olsson said.
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Deal Outlined
As part of the licensing agreement, Guinan and White will become co-publishers of the magazine. White’s former Connecticut Life staff will generate most of its editorial content.
Hartford Magazine’s sales force will grow from six to 20, and the two companies expect to begin offering cross-advertising opportunities, Guinan said.
The publishers plan to distribute Hartford Magazine to its existing free and paid subscribers, and also free to the homes that previously received Connecticut Life in West Hartford, Avon, Simsbury, Glastonbury and some selected portions of Hartford. Plans call for eventually crossing over to an all-paid subscriber circulation, Guinan said.
The magazine will also be sent to target households to sample the magazine.
The target demographic will remain the 30- to 65-year old age group, he added. “That’s not to say that young professionals in their 20s wouldn’t be interested in much of the content,” Guinan said. “It’s just not our goal to be in the 20s magazine.”