Thomaz Souto Corrêa, vice-chairman of Editora Abril S.A. – Brazil’s largest and most influential publisher – finds that the current climate in South America’s leading economy, is often a matter of perspective

Brazil has a population of 176 million people and a magazine reading population of 39 million people, a mere 22%. The per capita per issue, if measured by these numbers, represents 4.5 copies per person, per year. A very low figure when compared to the more mature magazine markets of the world, but this number is twice as big as it was eight years ago. So, is the bottle half empty or half full?

Today, if you take a picture of just the economic situation in Brazil, it is surely half empty. Consumption in general is down, unemployment is high, magazines are not one of the priorities of the typical Brazilian household, and the advertising perspective is poor. In addition, the Brazilian money, the ‘real’, was devalued in 1999, and the currency now stands at three reals to one US dollar. As a result, if you measure the performance of the economy in dollars, there has been a significant drop over the last three years.

However, if you examine the changes happening in the socio-economic area since 1999, the same bottle can soon become half full. After a concerted drive to stop hyper-inflation began in late 1994, inflation has been tamed, dropping from 1,600% a year (yes, I repeat: inflation was 1,600% a year, in 1990!) to less than 10% in 2003. Illiteracy has also reduced by more than 40%, with the number of students in primary and secondary schools rising by 50%.

Also, not especially good for the country but very interesting for magazine editors, is that 80% of the population now live in urban areas. Two areas in particular – the South and Southeastern region – represent 74% of all magazine sales. The compounded annual growth rate for social groups B and C were 1.47% and 1.7% respectively, while class A only grew by 0.47%. Meanwhile, internet users are now estimated at more than 20 million, a sharp increase from the 7.7 million users three years ago.

The circulation market

The total circulation of consumer magazines in Brazil is stable at 410 million copies a year. Single copies sales represent 58.6% of the market, with the remaining 41.4% sold through subscriptions. Overall circulation figures have increased by 10% since a new consumer segment entered the market in 1999: low cover price popular magazines. Forty million new magazine buyers have been attracted to these titles, costing just US $0.50.

Women’s magazines make up 39% of the overall market, followed by  financial, business and news titles, which represent 29%. With the exception of children and automotive, all other segments have experienced circulation increases during the last seven years.
The largest magazine in Brazil is Abril Group’s newsweekly Veja, with a circulation of 1.2 million copies. Two other newsweeklies also make the country’s top ten circulation titles: Editora Globo S.A.’s Época, with 422,000 copies, and Editora Tres’ Isto É, with 364,000 copies. The largest monthlies are Selecoes (Reader’s Digest), with 531,000, and Abril titles Claudia, 400,000 copies, Nova (Cosmo), 288,000 copies and Playboy with 359,000 copies.          

The Abril Group also publishes Elle, In Style, National Geographic, Superinteressante (with G+J Spain), and some Disney titles. Carta Editorial publishes Vogue and Casa Vogue; Globo also has Marie Claire and Globo Rural; the JB newspaper company puts out Forbes Brasil; and Marvel and DC Comics titles are licensed to Panini Brasil.

US and European publishers are already doing business in Brazil, mostly through licensing deals. A law introduced last year, allows foreign  investors to own up to 30% of magazines, newspapers, TV and radio stations. No international publisher has taken advantage of this ruling yet.

An advertising perspective

In the last three years, magazine share in the advertising expenditure has remained stable, around 10%, while the ad market as a whole has struggled. Today, broadcast television controls 58% of ad spend, and newspapers get 20%. Heavy users of magazines come from a number of categories, including: clothes and accessories, technology, electrical/electronic, and health and beauty. The biggest spenders are the automotive and finance companies. 

The challenges facing magazines are the same around the world: tough competition with TV and newspapers; how to make money from the internet by leveraging magazine brands; how to sell the importance of readers as consumers...But I believe the biggest threat we face today is the new trend in advertisers wanting more than vehicles for their ads; they want involvement with the reader, and the best way to achieve this is by mingling with the editorial. ‘What do we have to lose?’, they ask. Quite simply, our credibility. And if we lose our credibility, there is nothing left to sell. Not even readers... And whichever way you look at it, we still have a glass to fill.

Brazil at a glance

In eastern South America, Brazil covers almost half of the continent – making it the world’s fifth largest country – and borders ten countries and the Atlantic Ocean. It is South America’s leading economic power and has well developed agricultural, mining and service sectors. The country’s main trading partners are the US and Argentina and it has been expanding its presence in world markets since the nineties.

Despite its natural wealth, and being one of the largest economies in the world, Brazil has a large external debt which has resulted in one of the world’s highest tax systems. In September 2003, a report in The Economist concluded: “[Current tax in Brazil]  “nobbles enterprise, sows conflict among regions and levels of government and penalises the poor. Brazil is poorer and more unequal than it needs to be.” New president, Luiz Inácio Lula da Silva, who took office at the start of 2003, has made tax reforms the priority.

Picture: A contemplative Thomas Souto Correa

From FIPP's Magazine World, quarter 3: 2003, issue 38