The New York Review of Magazines

How Does The Economist Do It?

By Sruthi Gottipati

On the day of her interview, Radoslava Petrova was wearing a Brooks Brothers suit that fit her slim frame immaculately. A student at Columbia Business School in New York, the 25-year-old was nervous when, last December, recruiters came to her school to select a few students and offer them a shot at an investment banking career, tough job market nonwithstanding. After surviving some brutal interview sessions, she will fly to London this summer to intern at Deutsche Bank. The reason she made the cut — despite competing against about 200 other Ivy Leaguers — lies in her room, sandwiched between a laptop and a packet of cigarettes: a stack of much-thumbed-through copies of The Economist.

“It gave me a thoughtful insight into big-picture world events, and the recruiters really liked that. I could talk intelligently about the crisis and what the future might look like,” says Petrova, one of 1.4 million loyal readers of The Economist worldwide. Her loyalty can be measured in the $127 she doles out for her yearly subscription — and the fact that The Economist is the only publication she’s willing to pay for at a time when news is virtually free.

While American magazines, particularly newsweeklies, combat crashing circulations, bleak advertising sales and major financial losses, The Economist, which is not even American in origin, is the only newsweekly with a rising circulation in the United States, with more than 768,600 readers as of 2009. (The U.K. and U.S. editions of this British-owned publication differ slightly: The British version is generally three or four pages longer, its sections flow in a different order and it sometimes has a different cover.)

With a fan base more devoted than groupies at a Grateful Dead concert, The Economist maintains the highest number of total ad pages of all the weeklies, according to the Pew Research Center — 36 percent more than Time, its closest competitor.

So, what is its secret?

There’s no single answer. Interviews with readers, advertisers, media consultants, members of The Economist’s staff and industry observers, as well as a study of relevant reports, suggest that the magazine’s success can be attributed to a cocktail of four factors: 1. the magazine’s global perspective and systematic international coverage; 2. its style, including a sophisticated voice aimed at a cosmopolitan, affluent readership; 3. its business model, which includes an astronomical (by American standards) subscription price; and 4. snob appeal.

To understand where The Economist is coming from, it helps to look at its history, which began with a Scottish hatmaker’s exasperation with British Corn Laws. James Wilson felt government tariffs on imported grain and crops killed trade, and he wrote a pamphlet about it. But he still wasn’t satisfied and, in 1843, started The Economist. Its mission was to repeal the Corn Laws in particular and promote free trade in general through what it called “a severe contest between intelligence, which presses forward, and an unworthy, timid ignorance obstructing our progress.” The Anti-Corn-Law League helped fund the struggling publication, a newspaper at its start. Three years later, the Corn Laws were repealed, but The Economist, a bastion of free trade, continued to publish.

When Wilson’s son-in-law, Walter Bagehot, took over The Economist in 1861, its scope was broadened to include politics outside the cornfield. His name lives on in “The Bagehot Column,” a weekly analysis of politics, but his advocacy of non-interventionism in foreign policy doesn’t. By 1938, half of the magazine’s sales were international.

Today, The Economist is the flagship product of the Economist Group, which also publishes The World In …, an annual forecast compilation; Intelligent Life, a lifestyle quarterly; and CQ-Roll Call and European Voice, trade publications aimed at government officials in the United States and abroad. The Economist Newspaper Limited owns the Economist Group and 50 percent of its shares are held by The Financial Times Limited.

Global Perspective
One school of thought about the popularity of The Economist is that as free-market doctrines have became more accepted over the last 20 to 30 years, readers have come to identify with that take on economics. Perhaps.

But more likely it’s The Economist’s global perspective (both in coverage and tone) that distinguishes it from other newsweeklies and appeals to readers. Unlike the departmentalized Time, Newsweek and U.S. News & World Report, the central section of The Economist is organized by continent (see photo below).

Gideon Lichfield, 38, who has reported from three of those continents, just got back to New York from a meeting in London. He spent 12 years as a foreign correspondent for The Economist before becoming the deputy editor of the magazine’s website. Dressed in a brown button-down shirt, charcoal colored jeans and sneakers, he sits easily on his swivel chair and rapidly types e-mails and troubleshoots on the telephone in his 8th-floor office in The Economist’s midtown Manhattan building. A white board on one wall has a schematic drawing of online circulation scribbled in red marker.

“You’re encouraged to rotate,” says Lichfield, who has reported from bureaus in Mexico, Moscow and Israel for The Economist. Originally hired to cover science and technology, within two years he became a foreign correspondent. “Now,” he says, “the foreign bureaus are getting more split up deliberately to get more complete coverage. Because we’re increasing circulation and revenues, we’re able to increase staff abroad.”

The Economist has a far reach not just geographically but also in terms of the range of topics and the depth of the stories. At a time when newspapers, newsmagazines and TV network news departments have been closing foreign bureaus, The Economist’s broad coverage is a vital source of information for U.S. readers who want to keep an eye on the two wars the country is fighting and other international developments.

“It’s made itself indispensable to the reader who’s interested in the world,” says Clive Crook, a columnist with the Financial Times and a senior editor at The Atlantic who worked for 23 years at The Economist (and is a modest shareholder in the company). That quality contributes to The Economist’s tone, which seems perfectly pitched to its affluent, literate audience.

The magazine’s editors and writers assume a certain degree of intelligence in their readers. “I write for someone like myself,” says Lichfield, “curious about the world, well-educated enough to want to know more.”

The magazine’s name conjures up an image of a staid academic poring over supply-and-demand graphs, but this is misleading. If The Economist were a person, she would be a jet-setting foreign correspondent with a nose for political news. She’d be cerebral, but witty. And she’d have a global sensibility, feeling equally comfortable in Buenos Aires, Beijing and Bangalore.

One of the reasons graduate student Petrova is attracted to The Economist, in addition to the information and analysis she picks up from its pages, is its voice. It has a harmonious voice. No bylines accompany stories. Although it is a journal of opinion, individual journalists aren’t showcased. “This gives it the appearance of valuing group research and analysis” more than other publications do, says Amy Schein, editor at business research company Hoover’s.

Its political positions are not only consistent but also pointed, in contrast to the more objective angles pursued by The Economist’s American counterparts. “Opinion is woven into the magazine,” says Crook. This approach is, perhaps, best summed by Norman Macrae, a senior editor at The Economist a few decades back, who Crook says would tell his colleagues, “It’s not a ‘newspaper,’ it’s a ‘viewspaper.’”

Not everyone admires The Economist’s style. Some detractors say that its stories can be simplistic. “You might find it simplistic if you’re an expert in the field,” responds Lichfield, “because the magazine is pitched at a certain level of the general reader,” not the specialist.

Other critics contend that the magazine’s success is a result of promotion and marketing, and not necessarily the quality of its content. Lichfield is unapologetic: “If we’re honest with ourselves, brand counts itself as important,” he says. The branding for the magazine is astute. It uses the same cleverness as the magazine in its advertising campaign. Ads in the past have included such one-liners as “Leader’s digest,” “Weapons of mass deduction,” “Immaculate perception” and “Topical solution.”

Not unconnected to The Economist’s voice and style is its perspective. The January 23rd issue this year featured a cover story about the Obama administration and the consequences of big government, foreseeing little but gloom and doom. One line from the piece reads: “Electorates, as in Massachusetts, eventually revolt; and such expressions of voters’ fury are likely to shape politics in the years to come.” Sound apocalyptic? The Economist accurately predicted the burst of the housing bubble seven years ago.

Business Model
When people look at business models they consider a company’s allocation of resources. One of the main reasons for the magazine’s success in providing analytical stories is a priceless resource that reporters are offered: time. “We’ve got time to think, to read, to talk to people,” says Lichfield. Reporters don’t feel pressure to file every week. They are given as much as three weeks to file a piece that may occupy three pages in the magazine, up to five weeks to write 12-to-14-page reports or inserts.

To offset the costs of giving reporters more time for their stories, The Economist keeps tight controls on other editorial expenditures. A small U.S. staff — about a dozen reporters — is scattered throughout New York, Washington, Chicago and the West Coast, and the size of the foreign bureaus is modest. “They take care of you,” says Lichfield, but a correspondent’s office can often be “a spare room.”

Luck has played a part in The Economist’s circulation gains. Like other business-oriented publications during this recession, it has drawn readers because of its economic coverage. And, as a weekly, it has been able to stay on top of the news and still offer depth in its coverage of the global economy during the meltdown.

Finally, a crucial factor that contributes to The Economist’s success is the niche it occupies — the appeal of its readership to advertisers. It maintains a hefty $127 annual subscription price, while Time and Newsweek offer steep subscription discounts. “[The price] tells advertisers that readers value it. They feel they’re reaching wealthy consumers,” says Lucia Moses, senior editor at MediaWeek. Strategically, The Economist has steered clear of anything that might cheapen the product. “We’ve never given away toasters or alarm clocks with subscriptions,” says Lichfield.

The magazine’s substantial page count also allows it to charge more. It had 106 pages in its April 17th issue. That same week Time had 76 pages and Newsweek 56.

The Economist is more niche,” says Moses. “Other newsweeklies struggled because they’re being all things to all people. Stock in trade is now available online, whereas economic analysis isn’t.”

Crook laughs at the word “niche.” “How much is the circulation?” he asks. “That’s a hell of a niche, isn’t it?” he says, adding that quite a few magazines “will kill to get a niche like that.”

Other newsweeklies are trying hard to emulate The Economist’s success by using its formula. Each in its own way, the big three — Time, Newsweek and U.S. News & World Report — are trimming their circulation to reduce costs and target more of a niche audience in hopes of demanding better rates from advertisers, according to a Pew report.

Snob Appeal
Finally, there is the matter of The Economist’s snob appeal. Its price, its tone calculated to flatter its readers, its claim to cover the world, its overall intelligence — its English accent, as it were — all these things contribute to its special appeal. This has not gone unnoticed by its ad agency, which has used slogans such as “makes white collars brighter.”

“Much has been said of the title’s snob appeal, which places it a rung above chief competitors Time and Newsweek in terms of giving the impression that it has a more sophisticated readership,” says Amy Schein, adding that the magazine’s London headquarters further heightens its global cachet.

You could say that The Economist has astutely built an aspirational quality into its brand. It worked its magic for Radoslava Petrova. When she leaves for London this summer, she’ll be carrying a copy of her favorite magazine along with her business suits.

4 Responses to “How Does The Economist Do It?”

  1. Ganesh says:

    On most subjects, The Economist scores well on providing balanced perspectives while retaining an opinionated stand. No American publication comes close. It also appears that The Economist is growing its subscriber base rapidly in India. The courier who comes to my Mumbai suburb used to carry 3 or 4 issues to delivery in the neighborhood but these days he has dozens of issues. And the magazine ran a high-decibel campaign last year with Mumbai billboards tom-tomming its coverage.

  2. I like your post.

  3. After 62 years as a journalist, 30 of those years as chief foreign correspondent for Newsweek, 7 years as Editor-in-Chief of The Washington Times, I can say, quite simply, you are the best journalism has to offer in the English language. Hardly surprising that US Defense Secretary Bob Gates puts two hours aside every Saturday morning for a quiet, undisturbed reading of The Economist — cover to cover. I have the same ritual.

    Arnaud de Borchgrave

  4. Eleutheria says:

    Yeah Radi!

    I’ve been posted to Beijing for two months, and I haven’t read my Economist in that long. I miss it.

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