Wednesday, September 9, 2009

`Reader's Digest''s Hidden History--Part 10

(The following article originally appeared in the October 27, 1993 issue of the now-defunct alternative Lower East Side weekly, Downtown. Between 2007 and its 2011 bankruptcy, Reader’s Digest  was owned by Citigroup board member Tim Collins’ Ripplewood Holdings’ private investment/leveraged buy-out firm. See below for parts 1 to 9 of article).

In 1950, the Reader’s Digest Association established its lucrative Reader’s Digest Condensed Book Club which condenses a number of novels and/or nonfiction books into one volume and distributes these volumes around the globe to its members. The Reader’s Digest Condensed Book Club quickly became the largest book club in the world, with over 2.5 million members by 1955.

In 1955, after its newsstand sales began to drop when many of its readers began buying TV sets, Reader’s Digest then began to sell ad space for the first time in its U.S. edition to make up for its lost revenues. Reader’s Digest has also sold ad space to U.S. corporations like Eastman Kodak, Gillette, international Harvest, Exxon, Mobil, U.S. Steel, Texaco and Lockheed in its international edition. By 1980, a full page ad in the U.S. edition of Reader’s Digest cost $65,000 (in 1980s money) per issue.

Although $1.6 million worth of Reader’s Digest equipment at its Havana, Cuba plant—that had been used to produce its Spanish-language edition for Latin America—was confiscated in June 1960, following the Cuban Revolution, the Reader’s Digest Association continued to prosper during the Vietnam War Era of the 1960s and early 1970s. A division to sell vinyl record albums around the globe, which had been set up in 1959, had also proven to be quite profitable.

By 1980, the Reader’s Digest Association was a billion dollar/year business that employed 10,000 people around the globe and earned $100 million (in 1980s money) per year in profits. But in 1981, Reader’s Digest co-founder DeWitt Wallace died at the age of 91 and, in 1984, Reader’s Digest co-founder Lila Acheson Wallace died at the age of 95. (end of part 10)

(Downtown 10/27/93)

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