Condé Nast has devoted an enormous sum to launch its new business title, Portfolio: While initial estimates pegged the cost at $100 million, it was recently reported that the media conglomerate may be planning to spend $150 million to get the magazine off the ground. Since its debut in 2007, Portfolio has struggled to gain subscribers and advertisers, fired editors and hired new ones, changed its cover strategy, and emerged as the perpetual train wreck that media obsessives can't get enough of. But now we hear things are worse than ever. "With everything that's happened over the past few weeks, everyone is much more concerned," an insider tells us. For good reason.
Recently-released circulation figures show that despite editor-in-chief Joanne Lipman's decision to put actual human beings on the cover several months ago, just 15 percent of the copies placed on the newsstand during the first half of 2008 actually sold, a figure well below what will be necessary to make the magazine profitable. (The report also indicated that 22 percent of the magazines are distributed for free.)
But there are plenty of other concerns. With the economy in shambles, advertisers are cutting back on their budgets, and the decrease in ad spending is expected to have a greater impact on the weaker titles in Condé's portfolio compared to the magazines with established audiences and advertisers. And although the economic downturn is benefiting financial news media outlets like CNBC, glossy titles that follow months behind current events clearly have difficulty keeping up with the turmoil unfolding on a daily basis.
"The website keeps up with daily news, sure," says our source. "But the magazine is the big cost center, and it's stale as soon as it hits the newsstand." Portfolio's September issue, for example, questioned whether Vikram Pandit and Citigroup would be able to survive the financial crisis. Citi, however, is still in business (at least for now); several of its rivals, however, haven't been quite as lucky. And while the web gives Portfolio an opportunity to offset the print magazine's datedness, Portfolio.com has generally failed to give its competitors a run for their money. The site debuted more than a year ago and yet it still garners just one-tenth the traffic of Forbes.com and is half the size of BusinessWeek, even after the magazine has embarked on any number of zany promotional efforts.
Rumors that Condé Nast chief Si Newhouse might kick Lipman to the curb aren't new; they've been circulating for close to a year. "But now it might actually happen," says the tipster. "It isn't beyond the pale to think that Condé Nast might shut the mag down entirely if things don't turn around in the next few months. We're all hoping that doesn't happen, but given the way the market is headed, none of us is counting it out either."