In a media world turned upside down, Waukesha-based Kalmbach Publishing might offer some hints for how to wind up right-side up again.
Founded 76 years ago with the launch of Model Railroader magazine, Kalmbach has grown and diversified over the years. In what is probably its biggest coup to date, last week Kalmbach announced it would buy the science magazine Discover. With a circulation of 700,000, Discover will lift the combined circulation of Kalmbach’s stable of magazines by 70 percent, according to the Journal Sentinel, and increase the company’s top-line revenue by about 30 percent.
It’s a good fit. Like Kalmbach’s enthusiast-oriented magazines, Discover relies heavily on subscriptions rather than newsstand sales and treats circulation income as a profit center instead of a loss-leader.
Kalmbach long ago moved well beyond just model and real-life trains to produce or buy magazines for astronomy buffs, fine-scale model makers, bead and button enthusiasts, writers and more. Before Discover, its last acquisition was Cabin Life – a publication whose topic is just what it sounds like.
While researching my July story about the model railroading hobby, I spent the better part of a day over at Kalmbach’s offices interviewing editors. I also had an opportunity to sit down with Gerald Boettcher, CEO of the privately held company.
Enthusiast magazines, like Kalmbach’s properties, tend to develop long relationships with their readers. “They’re awfully loyal,” Boettcher told me. “They’re almost like lifetime annuities.”
The writers and editors who work for them are themselves typically active in the interests they’re writing about. “They have a vested interest in the subject matter.” As a result, they write not just with knowledge and authority about the topic at hand, but enthusiasm.
Take MR managing editor David Popp. A former English and drama teacher, he’s a third-generation model railroad hobbyist. Now in his mid-40s, he told me he’s built somewhere around two dozen layouts (those include project layouts for the magazine, not just his own home railroads) in the last couple of decades.
“My wife has commented on the fact that I’m happiest when I’m building benchwork,” Popp says. (That’s the wooden framework on which a model train layout rests.) “I think she’s probably right.”
Then there’s senior editor Jim Hediger. His job includes researching some of the most arcane details about how real railroads operate in order to answer the questions of readers who want to get it just right when they replicate them in miniature.
The rise of the Internet, and the morphing of online media to include video production and not just print and still photography, has had its effect on Kalmbach. The publisher has a strong Internet presence, but it’s also approached it with a clear understanding of the dollar value in its brand.
So, with MR, for example, many of its most valuable Web features are reserved for paying subscribers or customers, or to sell other products (books, for instance, or special online-only how-to articles). The monthly print magazine further highlights special online features.
Video is becoming an integral part of Kalmbach’s Internet, especially at flagship MR, and it’s changed Popp’s job considerably in the nine years he’s been at the magazine.
Privately held Kalmbach is free from having to obey the quarterly whims of the stock market, but that doesn’t mean it’s gotten a free ride in the last few years. The notion that hobbies are “recession-proof,” says Boettcher, is a bit overstated. And there are free online offerings – such as a new, online-only, entirely free model railroading magazine (paid for by advertising) – that could, over time, drain some of the business away.
Still, for anyone wanting a sense of what mainstream media might look like in a few years, Kalmbach offers some possible hints: A rock-solid brand; editors and authors of content whose knowledge and engagement more than matches that of a deeply engaged and knowledgeable niche audience; a willingness to experiment with different ways of giving readers the information they’re seeking; and, perhaps most of all, a shrewd understanding of what to give away for free and what people will be willing to pay for.
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