This is a quick follow-up to a prior post, “Another One Bites the Dust: Readers Digest In Bankruptcy.”  It now appears that Fortune Magazine has come under severe financial distress.

Consider this recent headline: “Fortune Magazine To Sharply Cut Publishing Frequency.”

First Portfolio, the business magazine launched just two years ago by publishing giant Conde Nast, folded. Then, the largest business magazine in America, BusinessWeek, was sold by its parent company, McGraw-Hill (MHP), to Bloomberg for as little as $3 million plus its subscription liabilities. Now, Fortune, started by Time, Inc. founder Henry Luce, will cut its publishing frequency from 25 times a year to 18 times. According to several media reports, Time, Inc. will also cut several hundred jobs. Time, Inc. is part of media giant Time Warner (TWX).

Fortune will probably never recover.  The magazine is victim to a changing economy in which its primary moneymaker — print advertising — is simply not as lucrative as it used to be.  Plus, the internet has provided a barrage of new competition, much of it available for free or at a very low cost.  And, perhaps more importantly, you can’t e-mail, re-post, or Twitter a hard-copy article like you can an online article.  If Fortune plays its cards right, it could perhaps retain its prestige as a premier financial website.  But it it doesn’t make some substantial changes, it will be on the fast road to irrelevance.

Charles Sizemore, CFA
Co-author of the recently-published Boom or Bust: Understanding and Profiting from a Changing Consumer Economy

Reader’s Digest, that magazine many of us most associate with the waiting room of a dental office, filed for Chapter 11 bankruptcy yesterday, the latest casualty of the worst advertising market in generations.

The Great Recession has hit the advertising industry particularly hard, and by association, the print media industry. Traditional newspapers and magazines make most of their money from advertising, not subscriptions or news stand sales. So, when advertisers quit paying…your favorite magazine or local paper stops making money.

The recession has exacerbated a trend that was already well underway. Internet news sites and classifieds (like Craigslist) have been gradually chipping away at the core consumer markets for newspapers for years. In an age in which information can be blasted around the world instantly, it is simply not economical or sensible to print, sort, and deliver untold tons of paper to the doorsteps of American homes. And it’s not just a problem for local dailies. The venerable Christian Science Monitor — considered one of the best newspapers in the world for its international coverage — decided to cancel its print edition in 2008 because its traditional model as no longer viable– and this was before the financial crisis fully hit late last year. Read the rest of this entry »