The publishing lessons supplement what Halperin calls her simple business philosophy: "Every year your circulation should go up, your pages should go up, and your ad revenues should go up." On a monthly basis, Smug has met those criteria so far. Assuming she raises the $500,000 she's seeking, Halperin projects that Smug's circulation will increase from 20,000 in 1995 to 30,000 this year and to 40,000 in 1997. Her business plan says that ad pages will rise from 150 in 1995 to 200 this year and to 250 in 1997. By gradually increasing Smug's ad rates while keeping them at least 50% less than those of the Village Voice, she intends to build Smug's revenues to $120,000 this year and $700,000 in 1997. Halperin is hoping to attract blue-chip college advertisers like American Express and Coca-Cola and to increase distribution up and down the Eastern seaboard -- from "Baltimore to Boston." Her goal for Smug: "to become the primary source of music information for every college student, concertgoer, and record buyer interested in New York's eclectic and hard-driving music scene."
Halperin defends her projections with several arguments: Music is an evergreen topic for Smug's target audience, which is itself evergreen, since a new crop of music-crazed college freshmen sprouts each year. Smug is free and therefore is more likely to be picked up by cash-strapped readers. And Smug offers high-quality writing and photography while charging competitive ad rates. It remains to be seen whether the blue-chip advertisers Halperin is courting will care to be seen in a publication that carries pictures of people with pierced tongues.
Smug's projected profit margins -- 12.5% in 1996 and 21% in 1997 -- appear ambitious, given the precarious nature of most magazine start-ups. Half of them fold within the first year, and most take four to five years to break even, according to Husni's research. But some of Halperin's competitors think she could achieve her goals. James Rensenbrink, publisher of Aquarian Weekly and EC Rocker, and a 27-year industry veteran, says that profit margins of 5% to 15% are typical. Arie Nadboy, publisher of the free 18-year-old biweekly The Island Ear (circulation 30,000), published out of Long Island, says profits can range as high as 20% to 30%, but getting there isn't easy. "Club owners and music types are people who aren't that easy to deal with and who don't pay on time, if they pay at all," Nadboy says.
Halperin can attest to that. She's learning the hard way the importance of collecting money up front: when the year ended, $7,500 of Smug's $70,000 in 1995 revenues were still accounts receivable. Smug now offers prepayment incentives to advertisers, but industry veterans suggest that slow payers and no-payers are just part of the landscape in this niche of journalism. Furthermore, Smug's fledgling status means that many advertisers expect -- and receive -- deals. "Since they're the new kids on the block, they go out of their way to be flexible," notes Polygram's Germinario. "If I say I have only x dollars to spend, but they have something that costs more than x, they'll cut a deal," he says, appreciatively. Smug's price flexibility boosts its popularity but not its revenue stream.
Smug's distribution could also use a little work. Although the magazine is available in 169 outlets in New York City, New Jersey, and Philadelphia, it is yet to be carried by large music retailers. "We're working on Tower," says Halperin.
One thing consistently good about Smug is its writing. Halperin emphasizes experiential, opinionated accounts that tell the reader what the writer felt or thought about the music. Occasionally the humor can be sophomoric ("The band's performance provided an excellent definition of the term 'blah"), but most of the prose is clever and smart. ("Hootie and the Blowfish is the Pat Boone of the '90s -- music your parents can like, too.") Compared with some of its competitors, Smug looks positively literary. The writer of the cover story on Phish wove Ayn Rand's definition of music into the piece. People in the music industry notice the quality. "They take care and pride in not presenting just another piece of crap," notes Hollywood Records' Dehgan.
"I don't know what I was thinking a year ago: a fifth-year senior in college, I got kicked off the staff of the school paper (where I was the best damn arts editor they ever laid their eyes on) and in a fit of revenge decided to put out my own magazine. Who would have thought that this is how it would turn out?"
Halperin penned that in an editor's note in Smug's anniversary issue, and 600 pairs of eyes read it in a framed version at the magazine's "We Can't Believe We Made It One Year" celebration, this past January. At the party, held at ultrahip CB's Gallery, in New York's East Village ("where Drew Barrymore and Madonna hang out," brags Halperin), the publisher briefly took the stage to thank the standing-room-only crowd of musicians, publicists, journalists, photographers, and record-label folks for their support of Smug. Dressed in a plaid jumper and white tights, the diminutive Halperin looked more like a schoolgirl than an entrepreneur. (OK, a schoolgirl with platinum-dyed hair and heavy black-framed glasses.) Gesturing toward her photographers' work displayed on the gallery's walls, she said she was "proudest she actually got to witness several people's careers happen" with the creation of Smug. But despite her self-effacing comments and her attempts to draw the crowd's attention to the photos, it was obvious that Halperin was the driver behind the evening's buzz, and that what was being celebrated was the launch of her career. She hadn't slept for three days, she had been at the printer until 2 a.m. the night before, and she was too frazzled to enjoy the free bar or the three bands that would play that night. Nonetheless, she declared, "This is perfect for me. This is what I was meant to do."
