One of the mainstays of American magazine publishing who enjoyed an extensive international reach announced yesterday that it would be filing for protection under Chapter 11 bankruptcy proceedings. Reader’s Digest, who only in December reported its first month in which digital copies outsold print editions of the magazine, will now come out of the action 80% lighter in the debt department, meaning about $365million is being renegotiated and forgiven, of which $8million was in the form of a loan from the Federal Trade Commission.
While Reader’s Digest announced that its international branches are not affected by the bankruptcy, the company does at least pretend that it will use this massive relief courtesy of the tax payers to restructure its business model. Hopefully, this will include things like following other magazines’ suits and dropping print altogether in favor of a far less expensive model to be found in digital publishing.
Unfortunately, this is not the publisher’s first experience with bankruptcy protection, and if stark changes are not made soon, it will not be its last. While executives from the magazine’s staff made glorious claims that having this oversized debt simply wiped clean will allow them to continue to publish, there has not been much mention of how this will benefit tax payers and consumers, let alone avid readers of the magazine’s 49 monthly international editions and some twenty more related titles.
Hopefully, Reader’s Digest will take a lesson from Newsweek, who published its last print edition last year in the sudden growth of tablet readers and the ever-worsening state of garnering advertisers for print magazines. While Reader’s Digest may not be well-known for its tech-savvy readership, it’s time to put the paper medium aside if the publisher wants to continue benefiting from debt forgiveness.