Selling Ourselves Out

Did you ever wonder why magazines that you buy on the newsstand for $4.99 per issue cost just $1 per issue when you subscribe ? That’s an 80 percent discount! With hundreds of pages printed in full-color, plus the cost of the staff needed to put the magazine together, how could a publisher possibly afford to sell a full-color magazine with hundreds of printed pages filled with dozens of written and edited stories for just a buck?

Most American magazines cannot support themselves on payments from readers—it’s nearly impossible to find enough readers willing to pay enough money to support the combined writing, editorial, design, marketing, printing, and distribution budgets. Instead, advertisers fund magazines by buying readers in lots of a thousand (CPM refers to Cost Per Thousand readers).

In the May 30, 2005 issue of Newsweek, the publisher’s efforts were funded by Canon, Apple, Philips, Morgan Stanley, Microsoft, Toyota, ExxonMobil, Nabisco / KF Holdings / Kraft / Altria (owner of Philip Morris), Van Kampen Investments, Discovery Channel, T-Mobile, Chase, HP, Colonial Williamsburg, Tempur-Pedic, RBS, Toshiba, Blackberry / Research in Motion, Quaker / Pepsico, LG, Xerox, Siemens, GlaxoSmithKline, GM, US Smokeless Tobacco Co., MSNBC, SONY, Unilever, A&E, or United. With this impressive list of advertisers, one cannot help but wonder how a news magazine can be entirely objective.

Long-time Ms. Magazine publisher Gloria Steinem explained, “historically, P&G would pull its ads from any Ms. issue that contained material about “gun control, abortion, the occult, cults, or the disparagement of religion.”

Here’s another example of a sell-out… When cable television was still a new idea, local politicians bought into the promises of entrepreneurs and sold exclusive service rights to wire and provide cable television service to their communities. (Often, local politicians were bought by the cable companies so that these deals could be made.) Promises of new schools, libraries, parks, and local television channels were rarely fulfilled; the cable companies pleaded poverty and kept their valuable franchises. Eventually, about half of these were sold to either Time Warner or to Comcast. Every month, these two companies collect over $40 per month from tens of millions of cable households. Total amount collected: $1.5 billion, every month.

Our legislators have given our valuable over-the-air rights to large corporations at no charge. (That’s right: ABC, FOX and the others get to use the public airwaves without paying a penny for the privilege.)

In the 1970s, no corporation was allowed to operate television stations that reached more than 18 percent of the country’s television households. Today, each corporation is allowed to operate television stations that serve 39 percent of the US, including one large and one small station in each city, and up to three stations in larger cities. Assisted by endless spin, industry lobbying has succeeded, and the limit will probably raised to 50 percent within the next decade or so. The Heritage Foundation explained, “the ability to own multiple media outlets can provide substantial benefits to consumers…” then points out that NBC can compete more effectively with FOX or CNN through corporate synergies. ” When the spin is unspun, there is no apparent benefit to consumers, but the benefit to corporations is clear.

Not that it matters: NBC does not own the 200-plus affiliates in its network, but NBC controls every affiliated station’s most-viewed hours in the morning, afternoon, early evening, prime time, and late night on all of those stations.