Alligators and Eyeballs

Alligators and Eyeballs

The Great Recession has been snapping up victims like a thousand-pound alligator in Gary Larson’s boneless chicken farm. And it turns out that hundred-year-old automakers are as defenseless as freshly-minted internet startups.

The magazine world has also been hard hit – at least weekly we hear of another closure. The reason is simple: magazine publishing’s core business model – advertiser subsidized publications – is moribund. Judge for yourself. The model is this: ① create a vehicle (magazine) that delivers eyeballs (readers, viewers, targets) to advertisers; ② maximize the number of eyeballs by giving away content for free (e.g. 12 issues of Vanity Fair for $12); ③ receive bounty (advertising fees) from advertisers; ④ rinse and repeat.

The problem is that, when ad revenue dries up, as it does in a recession, or when advertisers find ways to gather eyeballs on their own (e.g. via the internet), the model collapses.

Newspapers were the first to be hit – decimated when Craigslist began offering classified advertising for free (some papers received over 50% of their ad revenue from classifieds). Now magazines are facing similar pressures.

Publishers are bemoaning the fact that they cannot compete with free online content, that they must find a way to make people pay to read news and magazine articles in their web browsers. But the reality is that for decades magazine and newspaper publishers have given away their publications for free, never asking readers to pay the true costs of their editorial product. That has been borne by advertisers. (A quality magazine, one publishing consultant estimated, should cost $30-50 a year, depending on the publication’s size and frequency. How many magazines that you currently receive are worth that?)

Russian Life has always been a different sort of publication. We rejected the advertiser subsidized model from the outset, deciding instead to rely primarily on our readers. For 15 years our model has been simply this: create a quality editorial product and charge a fair price for it.

We watch our costs and run a very tight ship. Yet there are many factors outside our control. Like paper and printing and labor costs (many of our writers live and work in Moscow – one of the world’s most expensive cities). Or the 40% postal price increases we absorbed a year ago, thanks to a plan crafted by the big, ad-supported magazines that are now on the ropes. Or inflation.

We have not raised our magazine’s subscription prices since 2001. Eight years. I wish we could continue holding that line, but we cannot. So, on September 1,  we will introduce a modest subscription price increase. I felt you, our readers and customers, should be given advance notice. Of course, you can renew now and lock in current rates for up to three years.

Thank you for your continued support of Russian Life and, for the 101st time, enjoy the issue!

Paul Richardson