Friday, August 21, 2009

Reader Digest

Todays post is something different from usual Technology stuff. This is about a well-known magazine.

I can recall, during 1997-98, there was a small sized magazine, which used occupy the topmost place in my book pile, 'Readers Digest'. I was so much fascinated at that time, about the different topics (some are even above my levels) and especially the quotes. Later I headed towards computers and the place of Readers Digest was soon occupied by magazines like 'Digit', 'Chip' and 'Dev IQ'. After a long gap, now today I came across the name 'Readers Digest', but, in totally different context. I felt really bad, by knowing the 'RD' is now struggling for the existence.

How it could have happened!
I want to place my analysis about it. I want to consider 'RD was a trend', which is a general tendency to change or a popular taste at a given time. I have hardly referred 'RD' in the recent days, mainly because I think, its not really for me. 'RD' maintained its status for the specific segment of the readers, all over the world. The Digest was launched in 1922, about the same year as Time, Inc. and within the same decade as Life and BusinessWeek. Reader’s Digest once had a circulation of 18 million. For many years, RD was the largest magazine in the world and appeared in local language editions all over the world. That should have made it a good candidate for moving a great deal of its business online and taking advantage of its presence in dozens of countries and dozens of languages. The company’s business was not confined to the US or to the English language. This might have offered the Digest an advantage, but the age of the magazine’s readers undermined this option.

RD recently planned to reduce its circulation from 8 million to 5.5 million in February 2010 and also reduce the number of issues per year to 10. These moves are a routine part of the effort of many older magazines to save themselves, as followed by Newsweek cutting its circulation to 1.5 million (which was over 3 million, just three years before) and other prominent publication US News recently decreased its publishing frequency to monthly from its weekly level two years ago. - Ref. 24/7 Wall St.

Now, The US business of Readers Digest is going into Chapter 11. The immediate cause is the company’s need to restructure $1.6 billion in debt and to move ownership of the company to its lenders. The story is more complex than that. Two-and-half years ago, private equity firm, Rpplewood, led a buyout of Reader’s Digest for $2.6 billion. The problem at this stage is that Reader’s Digest does not make money. Ripplewood probably projected increasing profits when it closed the deal. Instead, the magazine publishing and direct marketing firm has run into the same trouble that newspaper groups like McClatchy (MNI) have: too much debt against no profit.

Personally keeping RD alive, will not affect me. I am neither the regular reader of RD, nor I have personal affection. I want to compare RD with Maharashtra Times, which was struggling to keep itself alive few years ago. But now, again MT is again a leading daily in Marathi. I expect similar turnaround for RD.


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