Magazine

For Your Eyes Only, Wal-Mart Woman


For Time Inc., the world's largest magazine publisher with 134 titles, coming up with a fresh idea for a new magazine gets harder and harder. That's because they've got something for just about everybody, from sports fanatics to celebrity gawkers to folks who live in fancy cottages. But when Time Inc. executives did some digging, they discovered an unfulfilled niche: Middle America's discount shopping crowd, mostly women. That's how All You, a title distributed exclusively at Wal-Mart (WMT) stores, was born.

All You's mission is quite simple. Research showed that women wanted to see models of all shapes and skin tones wearing clothes from stores like Kmart (KMRT) and Sears (S). They wanted to know how much it would cost to make a recipe, per person, and how to unclog a toilet "because even if they have a man around, chances are he's not doing it for them," says All You's editor Bella Price, a 48-year-old British transplant who is a wife and mother of four. And just as these bargain hunters seek out good deals in the aisles at Wal-Mart, they said they wanted a low price for the magazine as well, even if it meant fewer pages and no celebs. Ring up $1.47.

All You is one of five Time Inc. launches this year, vs. none in 2003 -- a sign that advertising is finally recovering. But as ads grow, so do new competing titles, one reason Time Inc. decided to push ahead with the new newsstand-only approach and offer its least expensive magazine yet.

But why choose Wal-Mart, the biggest, baddest retailer, as sole distributor? A no-brainer, really, say Time Inc. execs, given the chain's ability to lower costs and its vast reach. Magazine-industry consultant Samir Husni estimates that the All You launch may have cost $25 million, about half the bill for a more traditional magazine's debut. Time Inc. executives declined to disclose launch costs. The savings from All You, the first three issues of which have sold about 500,000 each, come from cutting out the newsstand wholesaler and the expensive direct marketing normally deployed to attract initial subscribers.

What's more, Time Inc. found it hard to resist the retailer's scale. Since it started selling magazines in the mid-1990s, Wal-Mart has amassed a 15% market share of all magazine sales in the U.S., making it the largest single outlet for newsstand sales. Circulation consultant Dan Capell estimates that the store racks up an even higher figure for sales of women's magazines -- 20% to 25% -- yet another measure of the chain's increasing clout. More than 138 million people visit Wal-Mart's 3,000-plus stores every week. "I can't think of another outlet that could get this done," says Capell.

HOT POTATOES?

Still, some publishers worry that Wal-Mart's sway is too powerful in their business, going so far as to demand that magazines it deems too racy hide their content behind plastic placards. More recently, the chain ruffled Time Inc.'s sister unit, Warner Books (TWX), by canceling orders for The Daily Show with Jon Stewart Presents America (the Book) because of a feature showing the U.S. Supreme Court justices' heads superimposed on top of naked bodies. "Wal-Mart is a huge player in our society, in other issues from health care to minimum wage structures to labor unions to downtown development. Are those all issues that [All You] will never touch?" asks Michael Hoyt, executive editor of Columbia Journalism Review. "That will be interesting to see." All You execs say they weren't bothered by any potential censorship issues. They also point out that Wal-Mart products that appear in the magazine are often on the same page as items from competitors such as Target (TGT), Kmart, and Kohl's. Wal-Mart spokesperson Karen Burk says All You is "just like any other magazine we offer."

Now others are rushing to follow Time Inc.'s lead by developing low-priced newsstand titles themselves. For example, American Media Inc., home to Star, Shape, and Men's Fitness, is set to roll out health and fitness magazine Looking Good Now at Wal-Mart stores in 2005 with a sticker price of just $1.99. Hachette Filipacchi Media U.S. Inc., which publishes Elle and Woman's Day, plans to offer the women's title For Me only on newsstands later this year.

ATTENTIVE READERS

Publishers are warming to newsstand-only titles in part because studies show consumers are more attentive to advertising when they plunk down money for a magazine on the spot. "When a subscription comes in the mail, you throw it in a pile of things to do later," says All You publisher Diane Oshin, who confirms that All You ad sales are strong -- 30% ahead of budget so far, with 70 ad pages in the December issue. Indeed, All You's typical reader fits a coveted demographic: a woman in her mid-40s with a median household income of $50,000.

Still, not all analysts are sold on the all-newsstand tack. Capell, whose newsletter Capell's Circulation Report shows that the 100 top magazines have lost 36% of their newsstand sales in the past 10 years, predicts that All You will be in the subscription biz before long, "because it's the only way to increase revenue and circulation."

Sure enough, subscription requests for All You have come in droves since the launch, accounting for about 40% of reader feedback, says Oshin. With numbers like that, editor Price agrees that taking on subscribers at some point will be a good thing because "Wal-Mart isn't everywhere." At least not yet.

By Erin Chambers in New York


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