Billion-Dollar Baby Business

New York Times had an interesting article eariler this week on the outrageous price of baby photos of celebrities:

Million-dollar payouts were unheard of a few years ago, but that changed when the United States version of OK! was introduced [in 2005]. Now there is about one a month. In March, People set a record, paying what industry executives say was $5 million or more for the first public pictures of Jennifer Lopez, Marc Anthony and their newborn twins.

An exclusive set of pictures, with one on the cover, can increase newsstand sales, but rarely by enough to sustain a payout of $1 million or more. Even at the full cover price, analysts say, each extra copy that a magazine sells above its norm generates less than $2 in income.

More commonly, an important exclusive sells an extra 300,000 to 500,000 copies — providing less than $1 million in added earnings. But that is just the American part of the ledger. Exclusive pictures have a greater effect on Web traffic; People.com briefly doubled its usual number of online readers when it featured Ms. Lopez’s twins, with about four million viewers in a single day. That kind of traffic can translate into more advertiser interest, but the magazine does not disclose such data.

I understand Tom Cruise and Brad Pitt's babies made huge news---but with each new wedding or kid it seems a little more extreme. I thought it was histerical that Christina Aguleria's baby cover sold poorly on the newsstand and it was treated by the blogging community as an insult to Aguleria's popularity...instead of perhaps, a lack of juicy gossip behind her pregnancy in the first place?

In the end, it's all a PR tool:

“The consumer’s expectation is if the photos are going to be available, I’m going to see them in People,” said Paul Caine, the publisher of People magazine, a Time Warner property. “If we don’t get them, we miss that brand promise, we lose the halo that goes with that.”