Date: Launched in February, 1922
Significance: Based initially on the principle of condensing articles from other publications, Reader’s Digest has become one of the most successful and enduring periodicals in U.S. business history. Its parent company, the Reader’s Digest Association, not only publishes a wide variety of consumer magazines and books, but also is one of the largest direct marketers in the world.
Reader’s Digest was the brainchild of DeWitt Wallace, the son of a college president. While recuperating from wounds sustained in World War I, Wallace developed a formula for condensing periodical articles that sought to preserve their substance, style, and significance. With the help of his equally enterprising wife, Lila Acheson Wallace, he launched the magazine during the 1920’s, when Americans felt they had less time for reading as a result of competition from the radio, the cinema, and the automobile. Members of the public eagerly welcomed a magazine that digested information they believed might be useful. The articles were condensed to one-fourth their original length and distinctively packaged in a size (roughly 5 by 7 inches) that could be carried in a pocket and read whenever the opportunity arose. The earliest issues contained exactly thirty-one articles, one for each day of most months.
Over the years, the Wallace’s shrewdly maintained their magazine’s appearance while constantly making editorial improvements. Advertising was first accepted in 1955, and gradually more original articles were commissioned. The founding combination of light-hearted humor with serious-minded topics continued. Thanks to its publishing formula, the magazine’s circulation climbed steadily, reaching a peak of 18 million domestically during the late 1970’s, before dwindling to 10 million in 2008—still one of the top consumer magazines in both circulation and audience. A worldwide phenomenon, Reader’s Digest is published in twenty-one languages and sold in more than sixty countries.
The Wallace’s ran their business enterprise like a benevolent kingdom in which they not only controlled every detail but also endeavored to treat their subjects as trusted family members. They provided free buses from New York City to the company headquarters, built in Georgian style on eight acres in Chappaqua, New York. Cafeteria lunches were subsidized, and employees even received free peanut-butter sandwiches, which the Wallace’s believed were healthy. The Wallace’s sought no special privileges and eschewed exorbitant salaries, preferring to share their wealth with their employees and their favored charities, sometimes giving away millions of dollars spontaneously.
When the Wallace’s died during the 1980’s, their enterprises were earning $80 million a year and were valued at $2 billion. Their successors focused on the company’s core products: the magazine, condensed books, general books, recorded music, and a mailing list of 100 million customers. Other endeavors, such as educational software, were eliminated, as were many employee benefits. However, when the company went public for the first time in 1990, it began to diversify its holdings by acquiring several special-interest magazines and a network of book marketers. In March, 2007, the Reader’s Digest Association was purchased for $2.4 billion by Ripple wood Holdings, a private-equity firm that holds investments in entertainment, financial services, manufacturing, and technology companies.
Canning, Peter. American Dreamers: The Wallace’s and “Reader’s Digest”—an Insider Story. New York: Simon & Schuster, 1996.
Heidenry, John. Theirs Was the Kingdom: Lila and DeWitt Wallace and the Story of the “Reader’s Digest.” New York: W. W. Norton, 1993.
Schreiner, Samuel A., Jr. The Condensed World of the “Reader’s Digest.” New York: Stein & Day, 1977.
See also: advertising industry; Barron’s; book publishing; Forbes; Fortune; Magazine industry.