Interesting story today on Melbourne Mag and probably true.

It was an interesting mag in that it reflected new Melbourne rather than the old guard.

It was also good to see a new publisher at a time when almost all serious magazines come out of Sydney.

I’ve been running another mag for a while and didn’t in my business
planning take into account the number of loss leaders that they run at
Fairfax in an attempt to prop up circulation.

They do it to such as extent that even News Ltd’s deep pockets can’t compete.

Examples of loss leaders include:

– The Green Guide (check with News on the level of discounting used
to keep out competition – it’s massive).

– Uncorked, distributed in The Age and the SMH, you can buy a full
page ad for $5,000 hitting several hundred thousand subscribers.That
is compared with Melbourne Mag’s rate card price of $4530 and a
claimed (unaudited) circulation of 20,000.

– any number of other inserts.

Discounting is always inevitable in a new mag and it wasn’t the only reason that Melbourne Mag is out of business:

– Many media buyers don’t think a magazine is serious unless it has a
circulation of at least 30,000

– Melbourne Mag wasn’t audited and distributed a lot of copies in cafes and hotel rooms. Buyers prefer paid for circulation.

– and being small the mag didn’t have the economies of scale to make
it work and make it cheap enough for advertisers.

PS: Apparently News Ltd has figures that shows that few of the Fairfax free inserts do anything for circulation.