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TEXT OF STORY
Bill Radke: We’ve been telling you lately about magazines shutting down. So what is Reader’s Digest doing launching new titles? This week, we’ll see a new magazine called “Fresh Home,” aimed at the “young and thrifty.” And in a few weeks, it’s a health and wellness publication called “Best You.” Sounds like a gamble these days. Marketplace’s Ashley Milne-Tyte reports Reader’s Digest might not have a choice.
Ashley Milne-Tyte: Reader’s Digest has about $2 billion in debt. Ratings agencies like Standard and Poor’s say it’s getting harder for the company to pay it back.
Still, S&P’s Hal Diamond says chasing new readers makes sense:
Hal Diamond: The core business in the past contributed the lion’s share of profits, and now that core business is in a steady decline.
With the economy in the dumps, it may seem an odd time to launch new magazines.
Robert Boynton is a journalism professor at New York University. He says Fortune Magazine launched the year after the 1929 Wall Street crash. And it takes years for a magazine to make money anyway.
Robert Boynton: All the people who start building when the boom is well in evidence probably have actually missed the great time to break into the market. The great time to break into the market is often times when things look worst.
Boynton says the glossies are losing readers exhausted by the pursuit of the perfect lifestyle. Readers’ Digest’s more down-to-earth offerings, he says, could be just what they’re looking for.
I’m Ashley Milne-Tyte for Marketplace.
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