Reprinting more stories from my old Sore Thumbs Blog....

In part one, I talked about how bad the magazine business is in general and how that affected EGM’s revenues.

Now, let’s look at how Ziff Davis Media’s financial situation helped to sink EGM (and Computer Gaming World for that matter):

Staffing cuts

Even when EGM was in its prime -- a big circulation that was getting bigger, plenty of ads, etc. -- we had to lay some people off because we needed to save the parent company some money. Some of that was a massive debt that ZDM had to manage; some was to help pay for, at the time, profit-loss centers in our up-and-coming web properties (primarily 1UP.com).

When you lose staff, you lose manpower, resources, content, and personalities. Just how much that affected magazine sales exactly, we don’t know (probably not much in the grand scheme of things, to be honest), but it’s something to consider.

Page cuts

To save on printing costs, Ziff was constantly reducing page counts. The number of editorial pages was supposed to be proportionate to the number of ad pages in any given issue. It’s a specific ratio that the company used to maximize profitability while still making the product an attractive buy at newsstands.

But as money got tighter, editorial pages kept disappearing, no matter what the ad-page count looked like. Our minimum book size kept creeping downward year after year. The issues got so consistently thin, we made the Olson twins look like a couple of elephant sacks. Yet we were still charging the same $6 per issue on newsstands.

Was there any doubt that this short-term savings would negatively impact long-term newsstand sales? Nope. But that’s all Ziff could do in its financial position. It would’ve cost the company tens of thousands of dollars each month just to add a dozen extra editorial pages to fatten up each issue.

That’s money it didn’t have to spend, and honestly, in this magazine market, we wouldn’t have made that money back in newsstand revenue anyways. A dozen extra pages wouldn’t translate into enough issues sold to make us five digits worth of sales back.

Promotional cuts

The company used to spend money on contests to promote circulation or on certain promotional displays on newsstands to boost sales. When budgets get cut, marketing and promotions are usually the first things to feel the blade. After a while, it seemed we had practically zero dollars to promote EGM at all.

Draw cuts

“Draw” is the term we use for how many issues we print and distribute, and out of those issues, how many we actually sell determines our “efficiency” (see part one for more on the problems there). Well, as the company got more and more desperate to save money, we had to reduce the draw by quite a bit to save on printing/shipping/distribution costs. Makes sense, but the negative impact is easy to figure out: Print fewer issues and you offer the consumers fewer issues to buy.

Just ask CGW’s old boss, Jeff Green. He’s been through years of frustration working with Ziff, trying to increase the draw for his magazine. We always knew why CGW was losing circulation -- because you couldn’t find any damn issues anywhere because we hardly printed any!

Our mags were put in a position TO lose business, so going out of business was inevitable. Meanwhile, competitors like GamePro and PC Gamer were still selling decently enough, because their respective publishers were still putting more than enough copies into the system for consumers to buy.

Now, I don’t have access to everyone’s spreadsheets to see who was running a more efficient business. Heck, maybe IDG (GamePro) and Future (PC Gamer) were going out of their way to waste money in order to win the circulation wars. Yet here we are in 2009, and GamePro and PC Gamer are still around, and EGM and CGW are not. Hmmm...