Friday, July 4, 2008

Magazines And The Hearst Media Conglomerate In The 1990s

(The following article first appeared in the 9/9/92 issue of the now-defunct Lower East Side alternative weekly newspaper, Downtown.)

Of the $3 billion in gross annual income that the Hearst media conglomerate earned each year during the 1990s, about 50 percent came then from Hearst’s Magazine Division. [In the 21st century, the Hearst media conglomerate’s gross annual income is now between $4.1 billion and $4.5 billion.] Besides Cosmopolitan, Good Housekeeping, Redbook, Harper’s Bazaar and Esquire, Hearst’s Magazine division also marketed Town & Country, House Beautiful, Sports Afield, Popular Mechanics, Colonial Homes, Country Living and Motor Boating & Sailing in the early 1990s. [In the 21st century, the Hearst media conglomerate now also markets O, The Oprah Magazine.] In the late 1980s, Forbes magazine estimated that Hearst’s magazine business was then worth over $1.1 billion and that around 250 million copies of Hearst magazines were then being sold each year. Cosmopolitan was generally the Hearst media conglomerate’s biggest money-maker during the last thirty years of the 20th century, although Good Housekeeping and Redbook had larger circulations.

Hearst’s Magazine Division also made money during the 1990s from marketing seven magazines in Britain and 56 foreign editions of its U.S. magazines (including South African editions that it had sold in South Africa during the apartheid era), and from operating two U.S. magazine distribution companies—Eastern News Distributors and International Circulation Distributors—and two U.S. subscription fulfillment companies. Because Hearst owned its newsstand distribution operation it had more special power to get one of its newly-created or newly-acquired magazines onto newsstands and keep it there during the 1990s than competing magazine publishers did. Magazines like Cosmopolitan were also produced in Spanish-language editions by publishers who paid to be specially licensed by Hearst to reproduce its magazines in Spanish.

Another reason Hearst’s most consistently profitable division had been its magazine division was that it had been able, historically, to reduce genuine economic competition in the U.S. magazine industry. As The Hearsts: Family And Empire—The Later Years by Lindsay Chaney and Michael Cieply noted in reference to the businessman who managed the Hearst media conglomerate for the Hearst family from the early 1930s to the early 1970s, Richard Berlin:

“Dick Berlin had a philosophy about competition in the publishing business—it wasn’t good for business…Competing magazine publishers frequently engaged in rate-cutting in order to lure advertisers away from each other…Berlin summarized his attitude in 1941 when he wrote to [William Randolph] Hearst [I] telling him that he had just met with the publishers of McCall, Curtis and Crowell in an effort to pound some reason into them and get them to increase their rates. In that case, Berlin was successful, and the other publishers eventually did increase their rates to match the Hearst publications.”

(Downtown 9/9/92)

Next: Cosmopolitan’s Television, Radio and Cable TV Connections In The 1990s

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