Magazines: Booming or Faltering?

Within the magazine industry, opinions appear divided on whether the business is thriving or just surviving. The Publishers Information Bureau recently reported that total magazine advertising revenues topped $4 billion in the first three months of the year, which is some 7% higher than the same period last year. Meanwhile, the total number of ad pages dropped 2%.

These numbers show that the depressed advertising environment may finally be waking up and that magazines are likely upping their rates in the face of dwindling ads.

The categories experiencing increases in advertising include toiletries, cosmetics, financial services, travel, retail, and food. Meanwhile, categories such as drugs, cars, and technology experienced declines. The fact that financial advertising is picking up may reflect a growing interest in business and the stock market, which took a hit due to recent financial scandals coupled with a slumping market.

Time Warner's (NYSE: TWX) People magazine saw ad revenues down 4% and ad pages drop almost 9%. It is facing some new competition from The Star, a tabloid that's undergone a makeover, re-emerging as a glossy entertainment publication. Time Warner's other blockbuster magazine, Time, experienced an 8% jump in ad revenues and an ad page drop of barely 1%. Time's nemesis, Washington Post (NYSE: WPO) property Newsweek, saw revenues jump a whopping 23%, with ad pages up 10%.

(For those interested, 50-year-old Playboy (NYSE: PLA) magazine, which had been faltering somewhat in recent years, experienced a 42% surge in ad revenues on a 36% increase in pages.)

In the world of business magazines, Fortune saw revenues increase 3% while ad pages remained stable, and McGraw-Hill's (NYSE: MHP) BusinessWeek enjoyed increases of 6% in ad revenues and 3% in ad pages. Forbes rose 8% in revenues and about 2% in ad pages, while Dow Jones (NYSE: DJ) property Barron's saw ad revenues skyrocket 29% and ad pages soar 21%.

The overall ad page decline in March marked 10 consecutive months of declines. It's hard to spin that positively, but it can be done, as executives point out that the rate of declines is decreasing.

Investors in magazines should keep an eye on developments to see if this downturn will reverse itself soon or whether this industry is facing serious problems. In the meantime, magazine readers may just want to enjoy thinner periodicals.

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Longtime Fool contributor Selena Maranjian owns shares of Time Warner.