NME case study

As Media Studies

Institutions and Audiences

NME case study – the Bare facts VERTICAL INTEGRATION Time Warner (THE PARENT MEDIA CONGLOMERATE) `own companies in both the production and distribution sector of the UK Magazine industry – IPC and MarketForce. This is an example of VERTICAL INTEGRATION. GLOBALISATION Although Time Warner is a multinational conglomerate, the NME is only published in the UK. This show that global media businesses still target national audiences in their search for profits.

CROSS MEDIA CONVERGENCE (OR CROSS MEDIA OWNERSHIP) The NME brand benefits from SYNERGIES deriving from shared cross media ownership – NME TV, NME Radio, as well as the internet presence etc). Only a big media conglomerate can afford to develop brands across such a range of media.

NME MONTHLY REVENUE STREAMS – Circulation - £135,000 (£270,000 but 50% to distributors, wholesalers and retail outlets) Magazine Advertising - £200,000 Internet Advertising - £170,000 and rising TARGET AUDIENCE Males 71%, 17 – 30 years ABC1’s 65%, 31% students Experts on mobile phones and other gadgets (so good place to advertise technology), obsessed with music, love films Fans find NME trustworthy, full of facts, honest )so good reading context for advertisers) Examples of brands consumed as indicated on Media Pack: clothes – Fred Perry; alcohol – Jack Daniels, bottled lagers; technology – mobiles, Sony Vaio laptops TECHNOLOGICAL CONVERGENCE First wave – the change from analogue to digital and the birth of the internet.

Second wave – Web 2.0.

These coincide with circulation drops for NME:

NME CIRCULATION A decline which gets much faster as Web 2.0 kicks in first drop from 2000-2007 Year 2000 – circulation 76000 Year 2006 – circulation 68000 NME responded to the first wave of technological convergence (digital music, the Internet), but developing an EARLY ONLINE PRESENCE – NME.com. This was because the target audience for music magazines was composed of EARLY ADOPTERS who took to the internet quickly and thus the NME’s CIRCULATION began dropping relatively soon in the internet revolution. Positives of this – new revenue stream from internet advertising once model for monetisation had been worked out. Also provided new audience data. second drop from 2007-present Year 2006 – circulation 68000 Year 2011 – circulation 28000 The far quicker drop over the last five years has coincided with the Web 2.0 revolution – the user generated web. This is because consumers of music and music journalism have become producers of it!

The “prosumer” has been born. NME has responded by colonising the web 2.0 applications of social networking etc.

Internet Circulation figures 5.3 million unique users of website (ABCe – Audit Bureau of Circulation)

NME CASE STUDY – institutions, audiences, technology 1. Institutions (mergers, take-overs, who owns it now? production, distribution, competition with other mags)     

UK’s longest, most successful weekly music magazine (est. 1952) Merged with Melody Maker (2000), Owned by IPC (2nd largest publisher in UK), benefits from economies of scale – IPC can supply the funds to sustain low points, has distribution power, to invest in new initiatives.

IPC is owned by Time Warner Competition with: o Kerrang (Bauer’s weekly), o Monthly mags: Clash (Independent), Q, Uncut ( but IPC owned), Mojo, The Wire o Free magazines: The Fly o Online only magazines: TMM (themusicmagazine.co.uk)

2. Audiences (target audience profile, audience fragmentation, interactivity & brand loyalty – ‘my NME’)     

Circulation: 28000 (ABC Jul-Dec 11), 300,000 in 1973 5.3 million unique users of website (ABCe – Audit Bureau of Circulation) Males 71%, 17 – 30 years, ABC1’s 65%, 31% students Experts on mobile phones, obsessed with music, love films Fans find it trustworthy, full of facts, honest

Extension: visit http://www.designtaxi.com/news.php?id=31389&month=&year= to find out about NME’s 2010 relaunch.

3. Advertising (how does NME keep advertisers happy? How much advertising in the mag, how much for a full page ad?)  

About 66 pages, on average 21 pages advertising, some are for NME products (concerts, NME subscription, NME Radio, NME Radar Tour, etc). £7000 full page ad, clearly targeted audience of ABC1 men who like music, films, technology/media gadgets

4. Technological convergence (it’s no longer just a printed mag, how else can it be accessed and interacted with?) 

Phone, online, radio, downloads, text alerts, social network sites, blogs, MyNME, Mobile

5. Synergy/marketing (how does NME extend its brand and ensure brand awareness?) 

NME Radio, MyNME, social network sites (Facebook, MySpace, etc), NME on Zinio, NME Online, festivals, tours, merchandising, compilation albums, ringtones, archive/back catalogue, text alerts, ticket sales, ads in other IPC publications, subscriptions

6. The future (based on its success so far, what do you predict for its future?)   

Maybe it will survive as the ONLY rock/pop/indie weekly with low circulation but high online unique users Maybe it will be online only in a few years surviving on its reputation and profiting from all its merchandising and advertising via awards, tours, radio, apps, etc. http://www.themusicmagazine.co.uk/ - is online only.

NME FINANCES – what’s the most important product?

Circulation 28000 copies a week (2011) Cover price £2.40 Therefore approx revenue generated from sales of the print magazine = £67200 a week (£270,000 a month) BUT 50% of this figure goes to wholesalers, distributors, and retailers. Although the main distributor for the magazine is MarketForce, who is a partner company with IPC and therefore owned by Time Warner, keeping some of the distributor costs/profits in house, the actual amount going back to IPC is only approximately 50% so:

Income from sales of the magazine = £135,000 a month (half of £270,000) Income from advertising in the magazine = £200,000 a month (if you analyse the rate card and look at the number of adverts in the magazine it looks like it should be more, but Chris Dicker, IPC Advertising Manager for NME states that these rates are heavily discounted).

Income from advertising on the internet = £150,000 a month (based on 2010 data) So advertising in total brings in £350,000 a month compared to magazine sales of about £135,000 a month. The real product is not the magazine – it is the audience.

For those of you that like to revise simply here is a chart: Monthly income from NME magazine sales

£135,000

(after wholesalers, retails and distributors cut)

Monthly income from NME magazine advertising Monthly income from NME website advertising

£200,000 £150,000