Dealing as they are with competition from the Internet, not to mention bureaucratic hindrances, Russian print magazines are staying afloat – and bringing more revenues to publishers than websites.
According to the results of TNS Russia’s National Readership Survey, which was conducted from December 2011 through April 2012, weekly magazines about television and show business accounted for 52 percent of the average per-issue readership in Moscow.
The 7 Dnei weekly, which will mark its 10th anniversary in December, took up 22 percent of the market. Showbiz magazines are followed by puzzle magazines and car review magazines with 13 percent and 8 percent, respectively. Women’s magazines and political publications account for 7 percent of the market each.
Market leaders among monthly magazines are women’s magazines, specifically the Russian Cosmopolitan and Liza magazine, which are followed by Vokrug Sveta, a travel magazine, Karavan Istorii, a celebrity biography rag, Lyubimaya Dacha, a magazine for dacha lovers, Lyublyu Gotovit, a cooking publication, Zdorovye, a health publication, and, finally, Za Rulyom, a magazine for car owners.
According to the experts, prospects for magazines on business and politics look bright – if proper management is in place.
Regina von Flemming, the CEO of Axel Springer Russia, which owns such powerhouses as Forbes Russia, is optimistic about the future of the Russian print media market. “In general the situation is good, and we are satisfied,” she told The Moscow News. “The Russian market is not in crisis compared with Eastern European countries. The situation there looks worse.”
A major challenge is the increasing reach of the Internet. This, however, can in no way affect a robust publication, according to von Flemming. Forbes Russia, for example, is on the upswing, von Flemming says – printing and selling even more copies.
A changing scene
Those publications that can’t keep up with the changing market have to close down or revamp themselves.
In June, for example, Filipp Dzyadko, the editor-in-chief of Bolshoi Gorod, a magazine which placed a great emphasis on design, had to quit over an alleged decline in readership. Many, however, linked Dzyadko’s resignation with the magazine boldly taking the opposition’s side during the most recent election cycle.
The trend for resignations and closures started a while ago, however. Russian Newsweek, which was owned by Axel Springer, was losing out to Itogi, Kommersant Vlast and Ogonyok, and had to be closed in October 2010 after six years on the scene. “It was never profitable, therefore we didn’t prolong the license contract,” von Flemming said.
Von Flemming declined to say which publications she thinks will be successful in the future. “It’s our big secret,” she said.
The media cycle In general there were 70,473 print publications in Russia as of January 1, 2012. In 2011, 6,557 new print publications were opened, while 9,104 were closed. Some just ceased to exist, others moved online.
“Retailers sell only those products that the buyer votes for with cash,” Alexander Oskin, the Board Chairman of the Association of Press Distributors, wrote in his report on the future of the media publishing world. “There are up to 6,000 such publications in Russia. Those who don’t want to learn to survive in a new environment are out.”
The circulation of printed papers and magazines has gone down by fifty percent over the past three years – and is expected to drop by five to ten percent annually. Subscription falls by two to four percent annually.
Nevertheless, print media remain far more profitable than electronic media in Russia. In 2011, the former brought in 116 billion rubles ($3.5 billion) in revenue, while the latter only 0.3 billion rubles ($9 million).
The taxman cometh
One of the biggest problems the print media industry has to face in Russia is an increased tax burden. In February, tax breaks for coated paper importers were canceled, while mandatory insurance premiums grew to 36 percent.
Meanwhile, the European Union is considering exempting print media from VAT and is subsidizing subscriptions for young people. In Germany, for example, there are 30 magazines a school student can subscribe to for free.
Another challenge for Russian print media is a new law passed just last week, which prohibits alcohol ads in the press as a measure to fight alcoholism. This legislation, to take effect on January 1, 2013, can affect media companies. Luxury alcohol ads account for a big share of the total amount of advertising placed in newspapers and magazines.
“Certainly, the new law will harm all printed ads,” Regina von Flemming of Axel Springer Russia said. “However I am more concerned about new law of alcohol ads on the Internet, because we had a lot of them on Forbes.ru. We are analyzing the situation at the moment.”
Small print retailers in Russia are meanwhile struggling to withstand competition from big chains, as well as pressure from local authorities.
In Moscow, the average daily proceeds from one newspaper kiosk stood somewhere between 5,000 and 6,000 rubles ($152 and $182, respectively) in 2011, which was three times less than in 2010.
“Municipal bureaucrats hate kiosks,” Alexander Oskin wrote in his blog, citing the fact that kiosks make too little to be significantly taxed.
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