One day, Myles Kovacs was looking at Lowrider, a magazine that caters to Latino car enthusiasts. He noticed that there were many ads for chrome wheel rims.
That was bizarre, he thought to himself, because low-rider car guys like wire rims. And so the photos that went with the articles in the magazine showed wire rims.
But chrome rims are the wheel of choice for tricking out luxury cars. So Kovacs got some partners and launched Dub magazine to appeal to the chrome wheel crowd with a $20,000 loan. That was 10 years ago.
The monthly now has a circulation of 100,000, and it’s filled with ads for chrome rims with articles and photos that match.
Kovacs also exploited other opportunities: The magazine’s parent company, Dub Media Services, in City of Industry, has 28 employees, and produces auto shows, retails toy cars and even licenses its name for special-edition Chrysler 300s.
“The magazine is the bloodline of our business because everybody sees it, but revenuewise it’s less than 30 percent of our business,” Kovacs said.
Dub’s core concept is “celebrities and their cars.” The magazine’s cover has featured Gene Simmons, Tony Hawk, Snoop Dogg and Shaquille O’Neal. Dub often works with car manufacturers to supply the celebs with customized vehicles, and then promotes both the car and the personality.
Dub’s 12 annual car shows are staged in cities across the U.S. Attendance averages 15,000 people at each, with the highest figure for the L.A. show at 26,000. The March event included a concert by rappers Ron Brownz and Ice Cube. Other Dub shows this year have featured local National Basketball Association players, bands and models.
In contrast with Anaheim-based Lowrider and its Latino readership, Dub stays nonethnic, opting for the “urban” label. Kovacs said his readership is about 40 percent African-American, 38 percent Latino, and 22 percent either Anglo or Asian. More than 90 percent of readers are male between ages 16 and 35.
As a result, Dub doesn’t have to rely on the car industry for advertising. The only auto brand that now pays for promotional services is the 2010 Ford Taurus. Instead, Dub has landed consumer goods sponsors, including Monster Energy Drink, Pepsi-Cola, Budweiser beer and Tag body spray.
It seems to be a successful formula so successful that SourceInterlink Inc., publisher of Lowrider, launched Heavy Hitter two years ago. The magazine sells itself as combining cool cars with an “urban lifestyle.”
“The Dub brand has tremendous awareness and authenticity in the market, and Myles has allowed big companies to tap into his cool factor,” said Peter MacGillivray, vice president at the Specialty Equipment Market Association in Diamond Bar, a trade group for after-market auto gear.
A successful line of die-cast toy cars has been in stores, including Wal-Mart, since 2001. Dub emblems and d & #233;cor sells at Autozone outlets. Last year, Chrysler shipped 4,000 Dub sedans with special equipment.
The company also put its name on “Midnight Club 3: Dub Edition,” a street-racing video game that has sold 6 million copies.
Kovacs believes the Dub model of multiple revenue streams will become the norm as auto marketing budgets continue to shrink.
“A lot of niche publications are down because they never grew out of their niche based on ethnicity or car style,” he said. “I don’t see those publications surviving in print; I see them surviving online. But they need to bring news to their audience because nobody wants to drive their dad’s car.”
Acute challenges
Auto magazines have always had to stay up to date. These days, amid a downturn in the automotive industry, the challenges are more acute.
The publisher of Anaheim-based Lowrider, Bonita Springs, Fla.-based SourceInterlink, declared Chapter 11 bankruptcy in April. SourceInterlink, which publishes a total of 56 auto titles including Hot Rod and Motor Trend in Los Angeles, won’t cut any of the titles as a result of the bankruptcy, said Gregg Goff, who works at the company’s Orange County offices as president of digital media.
He said the Chapter 11 filing was a result of excessive debt taken on when L.A. billionaire Ron Burkle’s Yucaipa Cos. bought a controlling stake in the company for $1.2 billion in 2007. The debt was covered by Citigroup Global Markets, JPMorgan Chase & Co. and Wells Fargo Co. They will lose about $1 billion in the process and take joint ownership when SourceInterlink emerges from Chapter 11.
“We continue to be profitable, admittedly less profitable than last year, but we’re not down significantly,” said Goff. “We hate to see advertising from Chrysler and GM decline. But if GM’s market share declines, Honda’s share will increase. We have ad support from every make and model sold in the country.”
Hot Rod and Motor Trend were key titles in the stable of Petersen Publishing, the L.A. company that invented the auto enthusiast magazine category. In 1999, Petersen sold the magazines to eMap, which sold them to Primedia Inc. in 2001. But as the hot-rod generation aged, circulation fell and Primedia sold the magazines to SourceInterlink in 2007.
The company’s challenge, Goff said, is to find new titles as the market evolves.
“We try to keep our titles contemporary to reach a broad audience, but on occasion we will eliminate or consolidate titles or introduce new products,” he said. “The Hot Rod demographic is older, but we also own Import Tuner and those readers are guys in their 20s.”
DUB MEDIA SERVICES INC.
FOUNDED: 2000
HEADQUARTERS: City of Industry
CORE BUSINESS: Magazine and auto shows around the theme “celebrities and their cars”
EMPLOYEES: 28 (down from 32 in 2008 after streamlining for efficiency)
GOAL: To expand readership from cities to the suburbs
DRIVING FORCE: Growing popularity of street racing and urban luxury car culture
