1972.

1970.

1965.

1960.

1955.

TABLE 2.-SHARE OF NATIONAL ADVERTISING VOLUME FOR SELECTED MEDIA

Source: Marketing/Communications (Printer's Ink) annual estimates of advertising volume, from McCann-Erickson Research Department.

TABLE 3.-COMPOUNDED ANNUAL GROWTH RATES OF ADVERTISING EXPENDITURES BY MEDIUM

TABLE 5.-AFTER TAX NET INCOME AS PERCENT OF SALES AND NET WORTH FOR THE PRINTING AND PUBLISHING

TABLE 6.-CIRCULATION OF ALL A.B.C.1 MAGAZINES GENERAL AND FARM (EXCLUDING COMICS)

• Reader's Digest became an ABC magazine in 1956.

Sources: Circulation-A.B.C. records covering the first 6 months of each year.

Population-Bureau of the Census, midyear estimates of population aged 15 years and older, excluding members of the Armed Forces overseas.

TABLE 7.-CIRCULATION BY SELECTED MAGAZINE TYPE, 1965 AND 1972

1 1971 circulation amounts used for 18 magazines where 1972 data was not yet available.

Source: 97 periodicals representing 75 percent of total A.B.C. combined circulation in both 1965 and 1972.

TABLE 8. PERCENTAGE OF POLITICAL, CULTURAL, BUSINESS, AND GENERAL INTEREST EDITORIAL LINEAGE HAS DECLINED AS A PERCENT OF TOTAL EDITORIAL MAGAZINE LINEAGE DURING THE LAST DECADE

TABLE 9.-SUBSCRIPTION CIRCULATION AND TOTAL AVERAGE CIRCULATION FIGURES INDICATE A DECLINE (AT AN INCREASING RATE) IN TOTAL CIRCULATION AND IN THE NUMBER OF MAIL SUBSCRIPTIONS

TABLE 10.-MAGAZINE ADVERTISING PAGES AND PAGES PER MAGAZINE HAS DECLINED SINCE 1966

Source: Data compiled from Publishers Information Bureau members which totaled $1.2 billion of advertising revenues in 1971.

TABLE 11.-MAGAZINE READERSHIP IN THE UNITED STATES AND OTHER COUNTRIES

Mr. HANLEY. Thank you for your very excellent testimony, Mr. Kelly, and the statement you have provided, Mr. Davis, is certainly very interesting, it is very concise, and provides us with further information related to the subject.

Mr. Bailar, who preceded you at the table, concluded his testimony in essence saying that the magazine industry is a very healthy industry. Would you agree, Mr. Kelly?

Mr. KELLY. We have figures today that are better than they were a year ago in terms of gross figures. This is not borne out on the bottom line as I think we indicated in our testimony rather completely and the fact of added revenues is on the record.

The fact of a low, low net is in our testimony. Other difficulties that publishers are facing are not known to Mr. Bailar, or to me. They are known to other publishers in this room.

Mr. HANLEY. May I ask, of your member publishers which magazine without mentioning the name of the magazine would account for the smallest circulation? What would be your minimal circulation for any one magazine? Would that information be available? Mr. KELLY. It seems to me we have one at 18, sir; 18,000.

Mr. HANLEY. For the record, could you provide us with a list of any magazines that have gone out of business who were at least 5 years old and ceased publication within the last 2-year period?

Mr. KELLY. Yes, sir, we could provide that information. Of course, sir, "magazine," you know, is a very broad term, but if you will give us the qualification within our own MPA records, sir, within our active industry, yes, we can provide that for the record.

Mr. HANLEY. Fine. That would be helpful to us.

With regard to Life Magazine, reasons have been projected that it died as a result of lack of advertising and that prior to its demise it was actively reducing its subscription list. Is this fact?

Mr. KELLY. That's fact, that's known fact that yes, they reduced from an 82 million level to a 512 million level.

Mr. HANLEY. Can you make judgement with regard to how significant the postal rate factor was in association with the demise of that magazine?

Mr. KELLY. Well, I think the statement from Time, Inc. management would probably best answer that since I would not be privy to intercorporation decision-making, but from memory, it seemed to me it was a factor in the final decision and the enormity of it, I would rather not quote from memory but I do recall at the time that it certainly came in for discussion, Mr. Chairman.

Mr. HANLEY. I see. Excuse me.

Mr. KELLY. I was just going to add, sir, I think there was a very complete issuance of press and the press conference at that time which I think covered among other subjects the enormity of postal costs.

Mr. HANLEY. Of your member publications could you tell us of the number of magazines that anticipate a reduction in profit for the course of this year under the prevailing rate?

Mr. KELLY. It would be difficult for me to project other than the fact that we have on hand the Price Waterhouse material which certainly gives you some indication when you are running at a 1.6 net profit. This, coupled with Mr. Barber's projections based on his best knowledge and professionalism makes it apparent to me you are going to have to come out somewhere that would be very worrisome, sir, but I could not give you a name or title.

Mr. HANLEY. Well, that could be helpful if we could have some information related to that cost or that projection, I should say. Now, generally speaking, subsidies have been given when an industry's balance sheets are in immediate jeopardy. I believe that your current balance sheets are good but on the other hand you say that the future is bleak. For the record, could you expand upon this?

Mr. KELLY. I'm sorry, Mr. Chairman. I want to address myself to the other point because I think it could be helpful to you and your committee.

Mr. HANLEY. Sure.

Mr. KELLY. Namely, that publishers could make their projections available. I can't give you, again, chapter and verse but we have publishers who are willing to, obviously, to you and your staff to make those projections for you.

Mr. HANLEY. Well, this would be very helpful to our

Mr. KELLY. We have indications of that now, sir, yes.

Mr. HANLEY. Fine, fine. If you will provide some information related to this to the committee it could be very helpful to us, and with that I recognize Mr. Johnson.

Mr. JOHNSON. Thank you. Mr. Kelly, we welcome you and your various people here and all of the other folks in the audience that represent your great industry.

Mr. KELLY. Thank you, sir.

Mr. JOHNSON. I am interested in your schedule A, your operating statement from '66 to 71. I'd like to ask you a few questions on it.

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