updated 9/7/2009 3:22:09 PM ET 2009-09-07T19:22:09

Nothing, it seems — not even a filing for bankruptcy protection — can dim the sunny optimism of Reader's Digest, a magazine that built its immense popularity over the past 87 years with brief articles and a cheerful disposition.

Just ask Peggy Northrop, the magazine's editor-in-chief since 2007.

Any jitters at the magazine since its parent company, Reader's Digest Association Inc., filed for Chapter 11 this summer? "It's business as usual," she said.

Worried about the much-heralded demise of print media? "All the stories I read about the death of print are in print!"

And what about her publication's declining circulation? "We're still the biggest, best-read magazine in the world."

True enough. With a circulation of just over 8 million at last count, Reader's Digest is still one of the most popular magazines. And in an interview with The Associated Press, Northop made clear she still thinks printed magazines with a broad, general-interest audience can stay afloat — even as the digital tide threatens to engulf the industry.

As the most-read magazine in the U.S., its fate over the next few years could offer some clues about the changing habits of the reading public and whether magazines can survive the shift.

Reader's Digest has not ignored the Web. In fact the magazine thinks its reputation for brevity can help lure information-saturated readers. Its Web site's average unique visitors per month — a critical gauge of online traffic — rose 23 percent year-over-year in July to 1.2 million, according to the tracking firm comScore. (The magazine says online ad revenue doubled in that period but would not provide the dollar figure.)

There's already an electronic version of the magazine on Amazon's Kindle electronic reading device, and an iPhone app is coming soon, Northrop said.

Advertising in the printed edition hasn't suffered the same kind of vertigo-inducing decline that many other magazines have, either. Ad pages were down about 8 percent year-over-year for the six months ended in June, according to the Publisher's Information Bureau. That compares with a 26 percent decline for the U.S. magazine industry overall.

Northrop attributes the milder declines to the magazine's plainspoken, Midwestern sensibility.

"We're not focused on luxury and bling," she said. "We're focused on the things that people need no matter what's going on in their lives."

True to form, the September issue has an interview with Anita Renfroe, a mom from outside Atlanta with a popular YouTube video; a guide to saving money on school supplies; and a short piece on eating a healthier breakfast.

The advertising also tends more toward the practical than the aspirational: Oxi Clean and Bagel Bites rather than Tiffany or Dolce and Gabbana. (Which may be just as well. Vogue ad pages were down 31 percent in the first half; Vanity Fair was down 35 percent.)

Hal Mandel, a 61-year-old manager at a recycling company in Kentucky, would seem to be right in the center of the magazine's target audience. When he was a child, his aunt used the magazine to teach him to read, and he still has affection for it.

"The stories are positive and I can show my children and my grandchildren any of it and not be ashamed," he said.

Yet Mandel can find time to read the magazine only occasionally these days. He let his subscription expire recently. "I have so much on my plate now," he said.

There are many more like him. Reader's Digest has been losing its audience.

Since 1995, when more Americans were beginning to turn to the Internet, the magazine's U.S. circulation has declined almost every year. From more than 15 million it has slipped to 8.2 million. In June the magazine said it will cut its base rate — the circulation it guarantees to advertisers — to 5.5 million, meaning it won't be able to charge as much for ads. It also plans to pare back to 10 issues a year from 12.

Northrop said the money saved by cutting issues is going into the Web site, but few magazines or newspapers have found much comfort there. Even the ones drawing big Internet audiences come nowhere close to replacing the loss of print advertising, which is much more lucrative than online ads.

"Reader's Digest seems to be one in a series of magazines that were once fabulously profitable that have run into serious financial trouble," said Rick Edmonds, a media business analyst with the nonprofit Poynter Institute. "General interest, broadly targeted magazines with big circulations have actually had a tough go of it."

There are plenty of signs that big magazines are in trouble. The New York headquarters of Conde Nast's magazine empire now has McKinsey & Co.'s cost cutters looking over editors' shoulders. The major news weeklies are scrambling to find a place in a sped-up news cycle, also slashing circulation and in some cases cutting issues.

No longer a publicly traded company since a $1.6 billion buyout took it private in 2007, The Reader's Digest Association does not publish financial results. But Northrop said the flagship magazine is still in the black.

It is the parent company that has stumbled, caught in a wave of private equity deals that loaded businesses with debt before the bottom fell out of the economy.

"We found ourselves in an over-leveraged situation that lots of people who are not publishers have gotten themselves into in the past couple of years," Northrop said, speaking of the parent company's situation. "Everyone was counting on growth in revenues and we hit a recession."

The New York private equity firm Ripplewood Holdings LLC led a consortium of investors that took Reader's Digest Association private in 2007 after a rocky 17 years as a public company.

Founded in 1922 below a Manhattan speakeasy, the company grew into a publishing empire with dozens of magazines. It used its database of subscribers to sell books, music and video.

But the company ran into trouble long before the current recession, with modern competitors like Amazon.com eating into its direct marketing business and circulation at the flagship magazine in steady decline. The company went public in 1990 with an offering price of $21.50 per share; Ripplewood bought out stockholders at $17.

With the prearranged bankruptcy filing last month, Ripplewood is headed out of the picture and Reader's Digest likely will have a new owner. Reed Phillips, a managing director with the investment bank DeSilva & Phillips, expects the creditors that are set to take over the company as a part of the bankruptcy plan will likely sell it within a year or two. Those new owners include J.P. Morgan Chase, GE Capital and Merrill Lynch.

For her part, Northrop is convinced Reader's Digest the magazine has a place in the years ahead. Not just in spite of the Internet but because of it — and the flood of information it has brought.

In one initiative, the magazine is looking to take advantage of its famed brevity to spread its brand online. It plans to introduce something called the "Reader's Digest Version" in the next few months, providing a snappy, bottom-line take on a wide range of subjects. Think Wikipedia boiled down to one or two quick lines. The magazine is adding the feature on its Web site but also considering an e-mailed version, or "widgets" that could be added to other Web sites and social networking pages.

"Reading the news today is like sipping from a fire hose," Northrop said. "It's really an opportunity for us to do what we've always done, which is getting to the heart of what people want to know."

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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