A price war has broken out in the glossy magazine market – a sector which has always taken great pride in the quality of its products and has commanded premium cover prices to match.
What is even more surprising is the fact that the skirmish has been triggered by Condé Nast, publisher of such upmarket titles as Vogue and Tatler. Its launch in March of the handbag-sized Glamour, with a cover price of &£1.50 – at least &£1 cheaper than its rivals – has spawned a flurry of copycat price cuts.
No stranger to price wars, H Bauer published its first glossy – Real – the following month, also priced at &£1.50. The company caused a stir when it launched Bella into the UK women’s weekly market in 1986 and later into the TV listings market with TV Choice, providing cheap alternatives to rival publishers.
Last week the National Magazine Company axed the price of Company magazine, normally &£2.60, to bring it into line with Glamour (MW last week).
NatMags’ deputy managing director Duncan Edwards says: “We are now facing intense competition from new entrants to the market, which have chosen to come in at an astonishingly low price. To protect our position, therefore, we have no option but to drop the price.”
He adds that the women’s lifestyle sector is at the “centre of a price war”.
The previous month NatMags launched Cosmo Girl at &£1.49. Edwards admits that “had Glamour not devalued the market in the way that it has”, Cosmo Girl may not have been priced so cheaply.
The low-price strategy has helped Glamour shoulder its way into a full market. It recorded a first-issue circulation of 451,486, according to the latest ABC figures, covering the period January to June this year.
Company’s circulation – 223,121 – dropped by 14.4 per cent period on period and 3.2 per cent year on year in the same set of ABCs. IPC Media’s Marie Claire also fell by 7.6 per cent period on period and 11.9 per cent year on year to 370,089, and circulation for EMAP’s Elle, at 224,410, remained sluggish for the period, rising 2.3 per cent year on year.
Simon Kippin, publisher of Glamour, claims that his magazine, along with Real, has brought new readers into the market. He points to the latest ABCs, which show that sales of women’s lifestyle magazines increased by 12 per cent period on period and 17.8 per cent year on year.
He says: “Magazine publishers have been pushing up prices for years, ahead of inflation. We looked at why women were buying fewer magazines: portability, content and pricing are all factors.”
Kippin says that the value-for-money strategy was always long-term, and warns other publishers against adopting a similar approach. He says: “If the magazine is not popular, just dropping the price is not going to change anything.”
But Starcom Worldwide media communications director Nigel Conway believes that more publishers will follow NatMags’ example. He says: “It’s a risky strategy, but if you don’t do it, you probably have more to lose.”
PHD press director Laura James also believes that other publishers will follow, but draws parallels with the newspaper market and warns of “short-term gains” encouraging “floating readers” and wrecking the loyalty factor that magazines claim to have.
Yet Tim Brooks, managing director of IPC Southbank, the division responsible for Marie Claire, has no plans to join the price war. He admits that Glamour’s launch had an initial effect on Marie Claire’s circulation but he says it has now recovered.
Brooks says: “There’s no evidence that price-cutting significantly increases sales, but there is evidence that it reduces revenue.”
All the same, IPC was forced to cut the price of What’s On TV from 50p to match H Bauer’s TV Choice, which launched in 1999 at 35p.
IPCtx managing director Caroline Ward says: “Very few families buy more than one TV listings magazine a week, therefore it was imperative that we retained those sales.”
Step by step, IPC increased the price of its title to 45p and circulation, which peaked at 1.8 million before the price war, is now holding steady at 1.7 million. Bauer’s TV Choice, which has a circulation of 751,618, followed suit and is now priced at 40p. Ward claims that since TV Choice’s launch, retail revenues in the TV listings market have dropped by five per cent, despite a two per cent rise in the number of copies sold.
MediaCom group press director Steve Goodman believes that a cover price war could affect the market in the same way as cover-mounting has done, with most publishers adopting the marketing mechanism. He says: “When they all do the same thing, the effect on circulation is cancelled out, and there’s even a danger that if magazines don’t cover-mount they will lose readers.”
With a downturn in the economy, Conway argues there will be even more pressure on publishers to look at price, with consumers thinking twice about making multiple purchases and newspapers offering them an alternative by including more lifestyle content in their colour supplements.
But Brooks and Edwards claim that magazine sales remain buoyant during times of recession, arguing that consumers are still prepared to treat themselves to small luxuries.
With covermounting and cover price wars contributing to the rise of flighty, disloyal readers, magazine publishers are going to have to become more agile in marketing their products.