Magazines Finally Find Successful Web Model

As part of the magazine industry’s continuing effort to find its footing on the Web, Conde Nast’s Internet division CondeNet will begin selling Williams-Sonoma products on its Epicurious Web site on November 1st.

The move seems to indicate that magazines are reconfiguring their Web models around retail sales. High-profile magazines such as Playboy and Harper’s Bazaar have already begun selling merchandise online, and Vogue and GQ — both part of CondeNast — are making plans to follow suit.

“Commerce is going to be an increasingly important section of a magazine’s online revenues,” said Aram Sinnreich, an analyst with Jupiter Research. “Magazine companies are going to have to recapture readers through new media and then figure how to get them to spend.”

The Old Magazine Model Failed

The development of magazine e-tailing comes at a time when magazine circulation is suffering from poor newsstand sales and falling direct mail response. Publishers are now looking to the Web and e-commerce to restore readership and to create new revenue streams.

In the early-to-mid 1990s, magazine companies tried to apply their print model to their Web strategy: Put up content and sell ads. Throughout the industry, however, magazines failed to realize enough banner ad revenue to cover expenses. Most magazines shrugged the experience off and accepted their money-losing sites as a public relations expense.

However, a new model began to appear in 1999 as magazine publishers watched the holiday e-tail boom in 1998 and began to devise ways for their companies to sell products at their Web sites.

About Epicurious

Beginning November 1st, Epicurious will sell housewares in a partnership with Williams-Sonoma. Visitors searching Epicurious for one of the site’s 10,000 recipes will also find a listing of the Williams-Sonoma cooking utensils needed to cook it.

Another industry leader, Playboy, sells its own brand of videos, apparel, and jewelry at Playboy.com. The company has a partnership agreement with other retailers to sell gourmet food and cigars on the site.

Company spokeswoman Rebecca Theim said retail sales add $3 million to Playboy’s revenues, beating the magazine’s advertising, subscription, and pay-per-view revenues.

In order to keep product sales at a respectable distance from the editorial department, many magazine companies set up their Web property as a separate division, often with its own editorial team focusing on product-related text. To further keep merchandising separate from the print publishing operation, many publishers pair up with retailers to handle the actual merchandising and transactions.