SIC 2721 Periodicals: Publishing, or Publishing and Printing
SIC 2721
This category covers establishments primarily engaged in publishing periodicals or in publishing and printing periodicals. These establishments carry on the various operations necessary for issuing periodicals but may or may not perform their own printing. Establishments not engaged in publishing periodicals but which print periodicals for publishers are classified in commercial printing industries.
511120
Periodical Publishers
The first American magazines appeared in 1741 but, like many of their successors, were doomed to swift failure. This inauspicious start notwithstanding, the periodicals industry burgeoned steadily over the following 250 years. By 2006 the number of business and consumer magazines had grown to 19,419, according to the consumer magazine industry association Magazine Publishers of America.
Increasingly, magazines are stretching beyond the boundaries of the print format. The Internet is a medium that is used in conjunction with—or in some cases, as an alternate for—the print publication. Other magazines are attaching their title to products and services across industries, including television, radio, and restaurants.
Periodical publishers earn money either by selling advertising space in their pages to companies wanting display areas for their products or by charging readers for subscriptions or individual issues. Thus, the periodical's content is essentially a tool that can be fine-tuned in order to boost sales and ad revenues. Many publishers also generate income through database marketing techniques, such as selling subscriber lists or marketing "back-end" products and services to their customers.
In recent years, publishers have sought innovative ways to attract more advertising dollars. Some, like top-ranked TV Guide, cut their rate bases to advertisers, making up the difference in revenues by boosting the newsstand price of the magazine. Others started custom publishing magazines tailored to the needs of specific clients. Business Week noted two interesting examples in the mid-1990s. One, a richly illustrated Conde Nast publication, advertised only the expensive watches specified in its title, Patek Phillipe; the other, from Hachette Filipacci Magazines, was Mercedes Momentum, launched in 1995 specifically to attract more female purchasers to the Mercedes Benz automobile.
A second way to multiply advertising dollars is by paying close attention to previously skirted markets and introducing new magazines targeted to them. For example, Essence Communications, publisher of the highly successful Essence, a magazine for African-American women, introduced Latina, a bilingual Spanish-English magazine in May 1996. From 1994 through 1997 alone, an average of 800 new magazines were launched each year to reach new audiences.
The leading magazine advertisers include automobile manufacturers, consumer goods companies, entertainment conglomerates, and tobacco firms. The top 10 magazine advertisers in 2002 included four automotive firms (General Motors, Daimler Chrysler, Ford, and Toyota), four consumer goods firms (Procter & Gamble, Johnson & Johnson, Loreal SA, and Unilever), one tobacco company (Philip Morris), and one entertainment and media company (AOL Time Warner). Procter & Gamble led all magazine advertisers with $496 million in expenditures, followed by General Motors with $396 million, Philip Morris with $382 million, and AOL Time Warner with $273 million. Taken together, the top 50 magazine advertisers spent $6.4 billion on magazine advertising in 2002.
More than 18,000 American magazines are published each year, yet the industry is dominated by large companies that tend to be diversified media conglomerates with interests in other media as well as magazine publishing. While figures representing total industry revenues are not available, in recent years the industry magazine Folio has estimated that the top 500 magazines account for roughly three-fourths of the industry's total revenues. The top-grossing magazine for several years has been TV Guide, which reported circulation revenues of more than $579 million in 2001. Notably, TV Guide was acquired in 1999 by Gemstar for $9.2 billion.
Because competition for ad and circulation dollars is intense, the turnover rate of publications is enormous—particularly for start-up periodicals. On average, hundreds of magazines debut each year, but statistically speaking, 50 percent are doomed to failure. Low barriers to entry in comparison to most other industries contribute to the high failure rate, because anyone with several thousand dollars and an idea can start a new periodical. Poor business planning and inadequate market research, however, usually accompany such endeavors.
Periodicals evolved from book notices that were inserted in European newsbooks published during the early 1600s. By the 1640s publishers were beginning to include critical commentary, and by the 1650s the notices began appearing as regular features of newsbooks and papers. About the same time that book notices were developing, digests and abstract journals began appearing. These periodicals provided summaries of published books, biographies, and reports on important philosophical, literary, and scientific matters of the time. The Journal des scavans, first issued in Paris on January 5, 1665, is recognized as the parent of the modern periodical industry.
Throughout the remainder of the seventeenth century, several...
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