Business

Celebrity-mag circulation takes it on the chin

The circulation numbers com ing out early next week from the Audit Bureau of Circulations are expected to show a particularly dismal first half of the year for the major celebrity magazines, according to estimates and insider reports.

Many titles are already scrambling. Two are adjusting their current rate base downward and at least one is cutting its price to stimulate demand.

Said John Harrington, editor of The New Single Copy newsletter, “I’m hearing it will probably be a double-digit decline in the celebrity category. There’s a continued sluggish retail environment and Facebook and Twitter are having an impact as well. All the celebrities tweet and have Facebook accounts where you can pick up a lot of the information.”

“When you are looking at the whole celebrity category, it is probably a 15 percent decline across the board,” said David Leckey, an executive vice president of consumer marketing at American Media, which owns Star and recently teamed up with Jimmy Cohen in a joint venture to purchase OK!

People, the category leader, managed to post a 6 percent gain in subscriptions — but that just kept its total circulation of 3,557,000 pancake flat. That’s the result of single-copy sales tumbling 10 percent in the first six months, to 1.15 million.

And in a sign of how difficult the environment has become, the 10 percent newsstand tumble by People, while bad, was the best performance by a title in the category. It is still comfortably over the rate base that it promises advertisers it will deliver and its subs are fairly high-priced.

At Bauer Publications, owners of In Touch and Life & Style, the numbers were even more grim. In Touch is estimated to have fallen 16 percent to 650,000 while subs are flat at about 30,000, which means it missed its 800,000 rate base by more than 100,000 copies. Life & Style fell an estimated 22 percent to 335,000, and even with 15,000 additional subscriptions, it is also more than 100,000 copies off its rate base.

Ian Scott, president of Bauer in the US, said the company has been testing a new lower price that is $1 off its normal cover price of $2.99 for In Touch.

“We’ve price-tested at $1.99 in 5 percent of the market for six weeks,” said Scott. He said he is likely to test for another six weeks. “So far, our sales results have been very strong,” the executive said, adding that he believes the lower price is not just helping his magazine but others as well.

When In Touch and Life & Style started, they were both priced at $1.99 and it helped push In Touch rapidly past the 1 million circulation mark. Other publishers felt the low price was prompting consumers to shun some of the higher-priced titles in the category.

Scott disagrees. He thinks it may have had the opposite effect. Nevertheless, retailers and wholesalers put pressure on Bauer to raise its prices, which it did three years ago.

“We went back and looked at the category in 2007 when there was a price differential and the category was doing great. “We thought the price differential was good,” he said. “We lost the argument, the prices went up and sales in the category went down.”

OK! also had a newsstand decline of more than 20 percent, leading up to the divestment of the US edition by Richard Desmond‘s London-based Northern & Shell. For the six-month period, newsstand sales will be 283,373, down 21.3 percent from a year ago.

Surprisingly, total circulation was up 7.5 percent, to 747,000 — but it appears that the number was padded by cheap subscriptions. The total subscription numbers surged 38 percent to 464,000.

But the gain had little value to the new owners, who are in the process of culling the list. AMI already announced that it was going to cut the total circulation to 625,000 in the second half. “It is expensive to maintain circulation levels with subscriptions,” said AMI’s Leckey. He said as the subscriptions expire, they won’t press for low-priced renewals. He expects the total circulation to drop further in 2012.

“We think the natural level is probably somewhere in the 500,000 to 525,000 range,” Leckey said.

Star also said it’s slashing its rate base to 850,000 in the second half, from 925,000 in the first half. Its first-half sales numbers show a 17 percent single-copy sales decline to 442,000, while its overall circulation dropped 7 percent to 880,000.

Us Weekly made its rate base of 1.95 million. It is also bolstering its numbers with subscriptions.

Its single-copy sales were esti mated to have fallen by 13 per cent to 16 percent, to 655,000 in the first half, from 778,000 a year ago.

The jolts may not be over. Borders, which was the fifth-largest seller of magazines at retail with about 3 per cent of the total market last year, is in the process of liquidating its 399 stores.

One bright spot: the surge from the royal wedding of Prince William to Kate Middleton in July will show up in the second half sales numbers. kkelly@nypost.com