Low-Risk Revenue Streams

Elle has a nice little sideline that earns owner Hachette Filipacchi Magazines some extra cash, with very little extra effort. The magazine lends its name to manufacturers that emblazon the Elle logo on everything from shoes to sunglasses. No surprises there; after all, plenty of publishers are in the product-licensing business. What is unexpected is the size of the paycheck. In 1999, the wholesale value of Elle merchandising was $520 million worldwide. Its annual U.S. merchandising revenues are “well into the seven figures range,” says David Fishman, senior vice president of brand development at HFM. And this year the magazine is expanding into the handbag and jewelry businesses.

At a time when traditional revenue streams are coming up short, publishers like HFM are more determined than ever to eke out earnings from less conventional sources. The catch is, they're not really interested in partnerships, ventures or new ideas that require too much, if any, upfront capital. Still reeling from failed dot-com initiatives and anxious about a stumbling economy, publishers are locking in on low-risk revenue generators — deals that require very little work, worry or investment, but promise incremental profits that build up the bottom line.

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