Reader’s Digest in peril in US

The US business of Reader’s Digest has put itself into Chapter 11 bankruptcy protection to buy time in reducing its $2.2bn debts, writes Martin Wainwright and Stephen Brook in the Guardian.

That’s a big beast to go down. But, like Picture Post, Punch, Lilliput and Illustrated Evening News in the UK or Life and Saturday Evening Post in the US, such titles have a finite life.

There may be attempts to revive them – and several of these titles live on as ‘brands’ in some diminished form or as picture libraries (images from Lilliput and Picture Post were held by the Hulton picture library, which was subsumed by the BBC and later by Getty) – but there is a lifecycle for magazines.

Reader’s Digest chief Mary Berner summed the latest problem up as “a balance sheet issue and not an operational issue” in the Financial Times. That’s undoubtedly true with buy-out investors led by Ripplewood Holdings set to lose $600m.

However, Reader’s Digest has a long-term problem of falling sales as its ‘baby-boom’ readership dies off. In 1999, then chief executive Thomas Ryder said the group’s strategy was to focus on those over-50s readers. They’re now all 10 years older and I doubt that today’s 50-year-olds are replacing them. The figures show what’s happening.

In 1999, RD had 1.25 million subscribers – it’s now down to a bit over a third of that at 463,597 – with about 150,000 of those sold at less than half price. Some 12,354 copies are sold in newsagents, a level at which it would be dumped by the likes of WHSmith if it were not for its reputation.

It’s a long, slow slide and the publisher has appointed high-profile editors to bolster sales while turning itself into a services company selling just about anything it thinks it is good at to the over-50s, with the magazine acting as a marketing front.

As for the concept of summarising other publications, that’s a lot older than RD, being made a staple of publishers by Victorian titles such as Tit-Bits and Answers (and Answers was the inspiration for the World-Wide Web!).

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2 Responses to “Reader’s Digest in peril in US”

  1. strangerinbluesuedeshoes Says:

    Is it the magazine itself or the company that’s running it? Reader’s Digest is an old concept, but The Week uses the same basic principles. From what I have read about the PE operation that bought out RD I’d rather be in the tender hands of Felix Dennis. Perhaps there should be a new question, along the lines of What Would Google Do – what would Dennis do? Probably close it.

  2. magforum Says:

    Reader’s Digest chief Mary Berner summed the problem up as “a balance sheet issue and not an operational issue” in the Financial Times*. That’s undoubtedly true with buy-out investors led by Ripplewood Holdings set to lose $600m.

    However, Reader’s Digest has a long-term problem of falling sales as its ‘baby-boom’ readership dies off. In 1999, then chief executive Thomas Ryder said the group’s strategy was to focus on those over-50s readers. They’re now all 10 years older and I doubt that today’s 50-year-olds are replacing them.

    As for the concept of summarising other publications, that’s a lot older than RD, going back to Victorian titles such as Tit-Bits and Answers (and Answers was the inspiration for the Wolrd-Wide Web!).

    *www.ft.com/cms/s/0/91aad306-8b8d-11de-9f50-00144feabdc0.html

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