September 9, 2008
Us Weekly to Launch a Quarterly Spinoff

Us Weekly, which inspired a host of competitors by using candid celebrity photos, a larger dose of scandal and splashy graphics to emerge from the shadow of rival People, is fighting to retain its share of a crowded market.

Rather than retrench and ride out the magazine industry’s current slump, Us Weekly’s publisher, Jann Wenner is pushing ahead with a plan to expand the franchise. Next spring, his Wenner Media LLC plans to introduce a fashion quarterly designed to give readers a guide to dressing and primping like the celebrities who appear in the magazine’s weekly pages.

The plan marks an attempt by Mr. Wenner to replicate People’s success with extensions of its flagship magazine. Those special editions, which include a monthly celebrity-driven shopping guide similar to what the edgier Us has planned, attract advertisers seeking a more-targeted audience than People’s.

Us Weekly’s newsstand sales declined sharply in this year’s first half, and while they are up 10% in the second half, a consensus is building among industry watchers that the magazine has peaked. That has fueled speculation that Mr. Wenner is thinking of selling the title and focusing on two other publications: Rolling Stone and Men’s Journal.

While the 62-year-old Mr. Wenner doesn’t rule out such a sale, he says Us Weekly is far from a mature property. “If the oldest profession in the world is prostitution, the second oldest is gossip,” he told The Wall Street Journal. “This is just the beginning of a number of things we’re going to do.”

“There’s a lot more growth left,” he added.

Last week, Us Weekly attracted a lot of attention and a small increase in sales with its cover story on Republican vice-presidential nominee Gov. Sarah Palin under the headline “Babies, Lies & Scandal.” Though the story, which discussed the pregnancy of Gov. Palin’s 17-year-old daughter, wasn’t as provocative as the headline implied, some Republicans accused Mr. Wenner, an avowed liberal, of advancing his political agenda.

Mr. Wenner said he was on vacation, and that the decision about what to put on the cover was made by Us Weekly’s editor, Janice Min.

Newsstand sales of the magazine, which has an average weekly circulation of about 1.9 million, were slightly higher than usual last week. And while about 1,000 angry subscribers canceled their subscriptions as a result of the Palin article, 1,000 new ones took their place.

Mr. Wenner said the new fashion quarterly will appeal to a younger and more sophisticated audience than People’s spinoffs. It will be more focused on celebrities and have guest columns from makeup artists and top Hollywood stylists, who will offer shopping advice. The New York company initially plans to print 450,000 copies of the quarterly, but Mr. Wenner hopes to increase the publication’s frequency to as many as eight issues in 2010 and 10 issues in 2011.

The planned launch is a nod to the success of People’s StyleWatch, which began as a column in the magazine, expanded in 2002 to a twice-a-year special edition and in 2007 started publishing 10 times a year with its own editorial staff.

StyleWatch this year raised its guaranteed circulation by 100,000 to 650,000 and now sells more copies on the newsstand than more established fashion monthlies like Elle and Vogue.

StyleWatch, which like People is owned by Time Warner Inc., has a nearly 100% female readership and attracts advertisers like Chanel that rarely appear in the flagship magazine, says Paul Caine, president of Time Inc.’s entertainment group.

Others have tried and failed to replicate StyleWatch’s popularity. Last year, Time’s In Style magazine scrapped Your Look, a quarterly fashion title geared toward readers in their late teens, after two disappointing issues. Before that, American Media Inc. abruptly shut down its Star magazine spinoff, Celebrity Living.

“How many more celebrity fashion and style magazines do we need?” one media buyer said.

Ad buyers and media analysts say Us Weekly’s fast rise created the false perception there was an unlimited appetite for glossy, photo-heavy celebrity magazines. Now the market is undergoing a correction. Bauer Publishing’s Life & Style and In Touch through June had circulation declines of 30% and 27%, respectively, compared to a year earlier, while circulation at Star fell by nearly 10%, according to the Audit Bureau of Circulations.

To many industry watchers, Us Weekly remains an intriguing prospect for a sale. Mr. Wenner is perceived to be less emotionally attached to it than to Rolling Stone, which he founded 41 years ago as an outlet for his interest in music, and with which he is as personally and professionally involved as ever.

Mr. Wenner purchased Us in 1986, but it didn’t really begin to take off until after 2000, when it switched to a weekly from a monthly and shifted focus to celebrity news and gossip from entertainment features. In 2001, Walt Disney Co. paid $40 million for a 50% stake in the magazine. Five years later, Mr. Wenner bought the stake back for $300 million.

At Wenner Media, Rolling Stone, Us Weekly and Men’s Journal all remain profitable even though growth has slowed at some titles. In recent years, Rolling Stone has undergone an editorial resurgence, with award-winning investigative stories and aggressive political coverage. In a bid to improve ad sales, the magazine, known for its unusually large pages, will switch this fall to a more traditional size.

Despite periodic rumors that he might step aside as publisher, Mr. Wenner told the Journal he is having too much fun to do so. These days he enjoys a less arduous work schedule that allows him to spend about two months a year on the ski slopes. And while he periodically floats the idea of selling his magazines, friends and former colleagues say, Mr. Wenner himself says he would like to hand over the business to his sons.

Still, he won’t exclude the possibility of a sale. “You always think about it,” he said.