Is Essence Magazine Going Out of Business?

Bossip and Gawker are reporting that Essence Magazine, once a juggernaut for black women and fashion, is having some troubles, which are probably financial. Press sources are also reporting that the magazine used an old picture of Reggie Bush for the cover instead of doing a photo shoot. Did they need to save money that badly? More bad news for the mag is that Mikki Taylor, Essence beauty editor, has recently resigned. AtlantaPost.com also mentions that pink slips have been passed out quite frequently since November at the esteemed African American organization.

With Bossip being a gossip website, we have to wonder just how accurate the story is that Essence is almost out of cash. But Bossip mentions other prominent websites that have been suggesting the same thing. Plus, if it is true that the picture of Reggie Bush was an old one, and they are not in financial trouble, then Essence will need to explain why they couldn't do an original photo shoot. That's just not the style of Essence, which is known for being very classy, so that is strange news indeed.

The magazine industry has had a very difficult time since the boom of Internet publishing. According to the Publisher's Information Bureau, the number of advertising pages in magazines dropped by 25% overall by the end of 2009. Also, the amount of total ad revenue for the industry has dropped by nearly 18%. This was a dramatic decline after the industry had already witnessed over a decade of drops in ad revenue and total ad pages. Essence Magazine seemed to be protected from the decline through their merger with Viacom, the group that also owns CNN. With this match made in heaven, many consumers expected that Essence would not join Ebony/Jet, which some believe is teetering on the verge of bankruptcy.

While the advertising revenue for print publications has dropped, Internet advertising revenue has tripled since 2001, rising to nearly $6 billion dollars by the end of 2009. So, while Essence Magazine might be losing money, Essence.com is earning advertising revenue instead. The increased ad revenue for Essence.com probably doesn't cover what the company loses from the magazine, because magazine ads are very pricey compared to online ads. Internet advertising also leads to more competition, given of the number of websites in existence, and the ability of niche sites to cater to a wide array of user tastes. It remains to be seen whether Essence can keep up and continue to be all things to all black women online.

Here are some tips for Essence, if the rumors are true and it's executives want it to survive. Magazines that tend to do well in this economy are the ones that have a strong online presence. Some say that Essence.com is a little less than stellar, so they have some work to do. Also, the magazine should offer good value to it's readers, by making sure that the content it offers is specialized. Magazines such as The Economist sell a lot of copies because there are few magazines that offer the same quality of analysis, and they also have a strong presence on the Internet. Despite the declining industry, The Economist group, which owns the magazine, has seen its profits soar to record levels using these two tactics. Essence also has the advantage of being linked in with CNN, which means that it can expand itself into a multimedia presence more easily than other magazines. So, even if Essence is not making a profit in the short term, it can still try to expand its media offerings into TV to become a valuable part of the overall CNN/Time Warner/Viacom brand.

If the alleged reports are true that Essence magazine is in danger of going out of business, only time will tell whether they are able to make these changes in time in order to save a beloved publication in the black community. The possibility that Essence might go out of business makes one long for the days of its leadership under Susan Taylor, pictured above. She really seemed to know how to run the magazine.

Lawrence Watkins is the CEO of The Great Black Speakers Bureau and an MBA student at Cornell University. For more information, please visit LawrenceWatkins.com.

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