TOUGH TIMES IN THE MAGAZINE BUSINESS don't rate the splashy headlines accorded industries such as autos and computers. But magazine publishers have been brutally pummeled by recession, suffering the worst advertising drought in recent memory.

According to the Publishers Information Bureau, the number of advertising pages in the $14 billion industry plummeted 10.3% in the first eight months of this year, revenues by 4.8%. This dive follows a discouraging 1990, when ad pages slumped by 3.7% and revenue inched up a paltry 1.9%. Says Tom Ryder, president of American Express Co.'s publishing group, which publishes Travel & Leisure, L.A. Style, New York Woman and other titles: "We are in the toughest period I have experienced in my 25 years in the magazine business."

With Big Business ad budgets chopped to the bone, the effect is plain to see: more than 40 titles, among them Savvy Woman, Psychology Today and Seven Days, have disappeared during the past two years. Last August, Family Media Inc., publisher of Discover, Health, and five other magazines, closed its doors--the biggest failure of a media company in this recession so far. And Consolidated Press Holdings of Australia folded California, then sold SF and Angeles to Steve Goldstein, a Santa Monica-based publisher of trade magazines. Goldstein, who now publishes Angeles, in turn sold SF to a new publishing group in San Francisco.

Other signs: magazines are skinnier and skinnier; publications such as Elle and HG have shrunk dimensions in a cost-cutting move called "trimsizing"; top editors have been shoved out at magazines such as Esquire, Redbook and Connoisseur; staffs are being sliced (about 1,200 job losses industrywide in the past two months); and the cost of placing ads in magazines--set in good times by a fixed "rate card"--is up for grabs, with some weak publications selling ad pages at a loss.

Even deep-pockets Time Warner Publishing, for example, has laid off 105 editorial and 500 business employees at six magazines. Moreover, the company's flagship, Time, is drawing up a radical redesign. Business Week has closed three news bureaus and shelved plans to launch a new magazine. At Lang Communications, one publisher, Carol Taber, has taken on responsibility for two publications, Working Woman and Working Mother.

Coping presents publishers with a delicate balancing act. In good times, magazines maintain a stable ratio between ads and stories, something like 60% ads, 40% editorial content. But today, if magazines trim editorial pages to keep pace with vanishing ads, they risk losing the pizazz that attracts readers. Although most publications have opted for fewer pages, a bold few, such as Esquire, GQ, Mademoiselle, Mirabella, and Vanity Fair, have kept up the illusion of health by increasing editorial features to replace missing ads.

Publishers with diversified holdings come up with more creative alternatives than price cutting. For example, in a highly unusual arrangement, Time Warner's Money magazine accepted an offer from General Mills' Total cereal to distribute special editions of the magazine with boxes of cereal. General Mills buys the magazines, and Money pockets the proceeds from selling ads. Some women's magazines now offer tie-ins with special events such as fashion shows.

Despite their problems, a few publishers are still adding money and people, or launching new titles. For example, Conde Nast has forged ahead with an expensive redesign of Self as well as introduced a slick new publication called Allure. Readers Digest Assn. bought a sickly American Health and has been pouring money into its resuscitation. Dow Jones & Co. and Hearst Corp. have announced plans to test a new financial magazine called SmartMoney. Time Warner decided to publish a new magazine, Martha Stewart Living, after two successful test issues.

When will the turnaround come? Responds Hershel Sarbin, chief executive of Cowles Business Media in Stamford, Conn., and publisher of Folio, a trade publication for magazine management: "If you can tell me how long the recession will last in the auto, travel, real estate and banking industries, I will tell you how long it will last in magazine advertising." In other words, your guess is as good as his.

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