I was recently watching TV and stumbled across a CNBC segment called, “Business Model: Inside the Sports Illustrated Swimsuit issue.” Given the state of the publishing world, I was immediately intrigued. If you have a minute and are interested in the future of magazine publishing, I would encourage you to watch the segment. You can find it online here.

In the event you don’t have time to watch the full segment, which is 45 minutes, consider the following:

• The Sports Illustrated Swimsuit Issue is huge business for the magazine and its publisher. It is one of the most successful franchises in existence today.
• The magazine sells more than a million copies on the newsstand every year. The swimsuit issue costs $2 more than the regular issue and has a much longer shelf life from February  through May because it contains features not news articles.
• Throughout its history, the franchise has made more than $1 billion for its parent company, Time Inc.
• As a model or product designer, if you are featured in the magazine you’re very likely to be “catapulted to success.” Placement in the magazine is a “type of advertising that money cannot buy.”

The swimsuit focused issue of the magazine came into existence in the winter of 1964. It was seen as way to boost readership in the winter months between football and baseball. They were looking for a way to generate some additional revenue and in the quest to drive readership, came up with the idea of the swimsuit edition. In 1997, the swimsuit edition became a stand-alone issue just featuring models.

Integrated marketing is now a big part of the issue and new revenue streams for the magazine. According to CNBC, “In 2010, integrated marketing has meant a 15 percent increase in ad revenue across the franchise.” Here are some of the campaigns and licensing agreements that are generating additional revenue for Time Inc.

• Special campaigns like “Direct Daniella.com” – This was a marketing campaign that Taco Bell and Sports Illustrated (SI) ran in 2008.
• There are special SI videos available.
• There is an iPhone application for sale.
• They are engaging consumer promotions, such as Miller Lite’s contest where consumers can vote for their favorite model of all time; or campaigns that offer consumers the chance to party with the models in Las Vegas.

Today, according to an executive with Time Inc., “Sixty percent of the revenue comes from print; 30 percent comes from Web, video and mobile technology; and 10 percent comes from event or experiential marketing.”

Clearly, other magazines and content providers can learn from the success of Sports Illustrated with its special issue.