It seems counterintuitive to suddenly, during a recession, charge a premium for a magazine that others get for nothing — without putting, say, a Treasury bill in each newsstand copy. Not to mention pulling such a move while competing with all the financial advice that's sitting there gratis on the Internet. But the publishers don't see it that way. "Our audience is of very high-net-worth individuals," says Worth publisher Patrick Williams. "Not someone like me who's worried about their 401(k)." (See the top 10 magazine covers of 2008.)
His thinking is this: you send the magazine to your selected 110,000 rich folks (chosen, more or less, by zip code and whether they have at least $1 million equity in their home as well as a minimum net worth of $2 million). Those prospective readers are so psyched about the wealth-management advice they get in their free bimonthly that they tell their rich but less-favorably-zip-coded friends, who then plunk down the $20 at a newsstand. "If there's six degrees of separation between all of us, there's about one degree of separation between high-net-worth individuals," says Williams. "We think the news will spread pretty fast."
Of course, it's a strategy to get to advertisers (and the press) too. If the only people who are perusing your magazine are those on the moneybags list, those who can afford $20 for a magazine and those who hop on private jets — the magazine is being placed in private airports too — you can argue that you've really cut out the riffraff readers. Then again, getting the magazine and reading it are not at all the same thing. (Plus, isn't this what breeds resentment against the wealthy? They who need it least get stuff — information, perks, taxpayer bailouts — for free, while everyone else pays.) (Read "Rick Warren's Magazine: A Publishing Leap of Faith.")
But Worth had to do something. When founder Randy Jones sold his share of it in 2003, its circulation was 500,000. It finished last year with about 50,000. The subscription rate listed on its website is $36. (Subscribe now and save $84 on the cover price!) And only 3% of its copies were newsstand sales, so it's not like that was a big business anyway. Sandow Media Corp., which bought Worth last year, also publishes Luxe (high-end design), True Beauty (high-end cosmetics) and Watch Journal (high-end wristwear). So the company probably feels it has a good read on the pulse of the prosperous.
Jones, whose book The Richest Man in Town, a compendium of advice culled from the stories of the richest self-made people in 100 American towns, comes out in May, thinks Worth is on the right track. "You have to try dramatic things if you're in the traditional media business," says Jones. "In the next few years, those who are in control of their finances will be spending. Better to market to them than anyone [else]." (See how Americans are spending differently in the recession.)
Of course, Jones acknowledges, there will be pressure to provide a product worth the cover price. The publication is being redesigned and will have heavier paper with more photography and so forth, but it has not announced plans for an investigative team intent on ferreting out the next Madoff. It has, however, hired an information-services company, Paladin Registry, to ensure that the financial advisers who advertise in the magazine are top-notch. One story we know will be in Worth's maiden $20 issue: an excerpt of Jones' $26 book.
However, Worth isn't the first magazine to cost $20 an issue. Many foreign fashion magazines hit that mark after being shipped to U.S. newsstands. Self Service, a scarily hip magazine out of France, is $75 an issue. A subscription to Visionaire, the biannual-or-so journal cum art book, is $675 for four issues. And then there's the bimonthly quantitative finance magazine Wilmott, which is $695 a year, or about $115 each.
But May's Visionaire has photochromatic pages, each one created by a noted artist. Open the magazine in the sun and Yoko Ono's black-and-white image transforms into color. It's unique and not something that can be reproduced on the Internet. Charging 20 bucks for a magazine that used to cost less than a third of that price is new territory. It remains to be seen if Worth is going to be worth it.