Saturday Night Business Speculation
You know, I’d hate to give the impression that I belong to one of these Internets groups, where nerds get together to discuss various forms of hip-hop media advertising and what have you, but… well, yesterday one of the guys from my hip-hop ads group sent me a link to this list, and it got me to thinking.
The list is a list of ad revenues for black magazines for the month of March, 2008, and their percent change from the same month last year. It was put together by a site called Target Market News, a trade publication for black marketing professionals, which purports to be “the black consumer market authority.”
For example, the lonely black woman’s bible, Essence, which is apparently the top-ranking black magazine in terms of ad revenue, raked in about $19 million in ad revenue last month, up from about $14 million in March of 2007 – a 39.1% increase.
I could describe the list for you in more detail, but you’re probably better off just checking it out for yourself.
A few things I should note about this list, before we go any further:
First of all, I’d never heard of Target Market News before until just now. It could very well be the case that it’s actually a front for an online prostitution ring, like that site, the Panache Report, that puts together those lists of the wealthiest individuals in hip-hop.
Also, I wonder how Target Market News would even know how much each of these magazines makes each month in ad revenue. Supposedly, these figures come from estimations by the Media Economics Group, but it doesn’t say who they are or how they would know.
That said, I thought the most interesting thing about the list is the fact that The Source makes about as much in ad revenue as XXL, my would-be benefactor. This time last year, The Source was only pulling in about a million dollars a month in ad revenue, but this year they’ve experienced an 88% increase, to draw about even with XXL for March of 2008, i.e. last month.
I guess I had never given it much thought, never having been privy to either of these magazine’s financial information, but I would’ve thought for certain that XXL would be pulling in way more money in ad revenue than The Source. Why else would XXL put these god-awful corporate rappers on its cover month after month, while The Source will put seemingly any ol’ bullshit on its cover?
I thought that was supposed to count for something, but apparently I was mistaken.
Of course it used to be the case that some of the companies wouldn’t advertise with The Source at all, back when Benzino was still in the building. XXL had already been around for a few years at that point, but I thought it really started to pick up steam when Dave Mays and Benzino went on their little jihad against Eminem, and the TIs at Interscope decided to pull their ad money from The Source. I think it even says as much in the Wikipedia entry for XXL.
I remember a couple of years ago, when The Source was struggling to recover from the Mayzino era and it looked like it might even go out of business. They put out a special anniversary issue, which wasn’t actually special in the least bit, and then they just kinda up and disappeared for a while. A few months later, I picked up a new issue, and there was a big-ass ad in the front of it, where the editor in chief basically begged the TIs to start spending money with them again.
I guess it worked.
I’m assuming that the reason why the ad revenue for the two magazines is roughly the same is that they both cater to roughly the same demographic, and these record labels and makers of silly-looking ghetto clothes and what have you aren’t gonna spend more money with either magazine to reach essentially the same group of people.
I know the “reach” of each magazine, based on its newsstand sales and subscriber base plays into it, but I’m not sure to what extent. Based on these figures, I’d say that neither one of these magazines is selling enough copies to have any kind of meaningful advantage over the other in terms of ad revenue.
At any rate, I’d say these figures definitely provide some fascinating insight into the business side of the hip-hop magazine game. Here’s a few conclusions I managed to draw from them based – I’ll admit – mostly on conjecture and my usual bullshit.
1) Now you can see why the TIs at Harris have been busy cleaning shop as of late. For all of the times that XXL has put Fiddy Cent on the cover, it hasn’t really been dominating The Source, now has it? It basically is The Source, just with classier art design.
2) Putting out a classier magazine, however, costs money. Keep in mind that the figures on this list are just ad revenues for the month, not profits. It’d be interesting to see how much of that $2 million each of these companies is left with once they get done paying people.
3) The Source, in that sense, might actually be in a better position, since they already have a reputation for not paying people, and I believe they’ve had it arranged so that they’re no longer accountable for paying all of the people that Dave Mays and Benzino stiffed over the years.
4) Furthermore, the last time I picked up an issue of The Source, its list of contributors looked like some of the bums who used to write for AllHipHop. I don’t even think it has an editor in chief – though I’ve never been sure what an editor in chief does, other than write those dumbass editorials.
5) Speaking of which, I would imagine this sheds some light on the pressure XXL’s former editor in chief was facing, before he got dropped like a bad habit. I’m sure it pained him to have to put Lil’ Wayne on the cover every other month. He was probably just at a loss for other ways to increase XXL’s brand image in the mind of the consumer.
Finally, I should note that these figures don’t include online revenue. Obviously that wouldn’t be much of an issue for The Source, since they don’t have much of a website. But one of the guys from my group, who might be somewhat privy to XXL’s online advertising dealings, estimates XXL’s online ad revenue as being maybe 1/6th or 1/10th of its revenue from print advertising.’
If that’s the case, I’d imagine this site must do pretty well for the TIs at Harris, since I can’t imagine it costs very much money to operate it. The hosting fees, I would imagine, are fairly negligible; and the banal q&a interviews posted in the features section, Noz once told me, are all written by bum-ass college students who are willing to work for free, under the impression that it might help boost their careers in hip-hop journalism.
I would call them all suckers, but I’m hardly in any position to gloat.