Obvious must-read of the week: that monster Reginald Dennis interview at hiphopdx.com: Part one, two and three. Good friend that he is, Reggie realized I'd never get around to the sequel for my Real History of the Source, and stepped up with everything I was gonna cover and then some. Save it, print it out and study it, present a paper on it next year. I do have one more historical document that I'll post next week, a tasty little supplement to Reggie's thorough rundown..
April 4, 2005
Dear Valued Client and Marketing Partner,
I'm writing to you to discuss the current status of The Source
Magazine's circulation, as well as to share with you some exciting
developments that are taking place under the banner of The
Source - the most widely-recognized and well-respected brand name in Hip-Hop throughout the world. The year 2005 will undoubtedly be remembered as one of the most pivotal years in the history of The Source, which you may know I started as a one-page photocopied newsletter in 1988, while I was an undergraduate at Harvard University and host of the weekly Hip-Hop radio show 'Street Beat.' At that time I saw that Hip-Hop culture was an amazingly powerful force that was rapidly expanding across every conceivable boundary, and would ultimately drive the emergence of the most cohesive and unified multi-cultural generation of teens and young adults ever. Well, that day has arrived, and it is clear that Hip-Hop now owns the 18-34 demo, influencing spending on everything from cars to clothes to travel to food to deodorant.
During the last two years, I have been working hard to lay down the
building blocks that will secure the future of The Source as a
powerful global media and entertainment company. Check a few of the
stats: the November 2004 broadcast of The Source Hip-Hop Music
Awards was a smash, ranking as BET's sixth highest-rated show ever; in
addition, The Source Awards Weekend is now the largest and most
exciting annual live event gathering of Hip-Hop fans, attracting
over 75,000 people to Miami last October; The Source Hip-Hop Hits
compilation album series was expanded with the release of both
Volumes 8 and 9 last year through our own independent record company, The Source Music; the launch of The Source Mobile Channel was executed and has resulted in the sale of over 1 million ringtones in less than 5 months.
With all of the time and energy that was expended building up our
brand through these new channels, there was one unfortunate mishap
that affected our core business at The Source Magazine. During our
move to new office space late last year, we lost important
subscription files, including payment records, which has created a
pool of approximately 80,000 subscribers to The Source that we
cannot qualify as 'paid' under ABC guidelines. Given the magazine
circulation scandals that have plagued this industry over the past couple of years, The Source recently met with ABC and decided to voluntarily and temporarily suspend itself from ABC auditing of our paid circulation, rather than attempting to mask this problem with the smoke and
mirrors typically used by many magazine publishers to enhance the
appearance of their subscription file. The bottom line is that we will be unable to provide an audited statement of our paid circulation for the last 6 months of 2004. ABC will be conducting a reinstatement audit to cover the period of January - June 2005, and will issue its normal publisher's statement for this period in the month of August 2005.
Because all 80,000 names that were affected are individuals who
have definitively requested a subscription to The Source Magazine, we
will be continuing to mail copies to them during the first 6 months of
2005. These copies will appear as 'qualified non-paid, direct
request' subscribers on our upcoming ABC audit statement for the 6-month period ending June 30, 2005. We are providing our clients with a guaranteed circulation of 400,000 for the January - June 2005 period, which will consist of a monthly average of approximately 280,000 paid single copies and 50,000 paid subscription copies, along with the 80,000 controlled subscriber copies. As we renew and convert this affected pool, and implement a number of new and innovative subscription acquisition methods, we are guaranteeing delivery of a fully qualified paid and audited circulation of at least 415,000 for the second half of 2004.
While we are disappointed to have reached the conclusion that there
is no other way to deal with this, I must note The Source's
unprecedented track record of 10 straight years of consistent circulation growth without ever missing a rate base. The fortunate aspect of the timing of this problem is that it coincides with an entirely new subscription acquisition strategy that we are implementing in 2005 under the direction of our newly hired Circulation Director, Chris Flatley.
For the past 17 years, The Source has always staked its reputation on
its astounding single-copy sales figures, which continue to this day
and make us by far the #1 selling music magazine on newsstands in
America. The fact that we have typically sold 70 - 80% of our paid
circulation on newsstands and have never used questionable subscription acquisition methods is the reason that The Source has always delivered for our clients millions of the most passionate and involved readers of any consumer magazine on the market. Our response rates and MRI Readership data have consistently posted numbers 'off the charts' that prove the unusual vitality of our readership in relation to our competitors. In 2005, we have dedicated ourselves to delivering to you an equally vibrant and responsive subscriber base - not just a list of names and addresses that we mail our publication to.
On June 14, we will deliver our July 2005 issue and introduce the
'millennium' version of The Source Magazine, which will feature a
number of new content sections, a new, larger page size, and a
complete re-design, including our logo, which has been updated for
the first time in over 14 years. We will also deliver 250,000 copies of
'The Source 5.0, The Hip-Hop ExperienceTM,' a DVD/CD-rom disc that
brings content from that month's issue of the magazine to life, and
will revolutionize the way our readers interact with our magazine.
The Source 5.0 is also a cutting-edge and dynamic approach to
integrating our sponsors' brands and products directly into the experience of
the Hip-Hop Generation. While we will introduce this product to our
audience by making it available in select newsstand copies of
several upcoming issues this year, it will then become a subscriber-only
premium, insuring that our subscription base delivers to our
advertisers the same 'wantedness' that you have come to expect from
The Source over the past 17 years.
There are many more exciting new developments in store for 2005,
including the launch of The Source Latino, The Source Swimsuit
Issue and 'CalenzineTM,' The Source Fat Tape and our new website at
www.thesource.com. Our talented and responsive group of sales
executives will be following up with you shortly to discuss all of
this, answer any questions you may have, and sign you up before
it's too late!
Best wishes,
David Mays
Co-Founder and CEO
