Reader's Digest: A Speakeasy Basement, Sweepstakes Probes and a £1 Sale

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Reader's Digest began with DeWitt and Lila Bell Wallace, who married in 1920 in Pleasantville, New York, and launched the magazine in 1922 from a Greenwich Village basement beneath an illegal speakeasy. With scissors and glue they condensed articles from other monthlies, and DeWitt persuaded publishers that the shorter versions were free advertising for the originals. The digest was about half the size of standard American magazines so it could slip into a coat pocket. The Wallaces hoped to net a few thousand dollars a year; by the end of the 1920s they had nearly 300,000 subscribers. A UK edition followed in the late 1930s, then dozens of editions in more than 20 languages, plus Braille and large print. A vocabulary feature began in 1945, and a 1952 article linking cigarettes to lung illness caused a temporary nationwide dip in cigarette sales.

The company turned its readers' trust into a mail-order business selling record collections and hardbound condensed books. Sweepstakes mailings in official-looking envelopes suggested recipients were already finalists and that buying might help them win. In the early 2000s dozens of U.S. state attorneys general alleged that elderly and vulnerable consumers were misled, and a settlement required do-not-contact lists and plain statements that purchases did not improve the odds. British regulators later reprimanded similar mailings. The parent company had gone public in 1990, and a 2007 leveraged buyout tripled annual interest payments to $148 million just as print was losing readers to the internet. It filed for bankruptcy in 2009 and again in 2013, the UK branch was sold to a venture capitalist for one pound, and the UK and Canadian editions ceased publication in 2024.

• By the mid-2000s the magazine reached more households earning over $100,000 than several major business and financial magazines combined.
• Its German publishing arm produced a 50-volume hardbound anthology of classic science fiction.
• Throughout the 20th century the magazine promoted a conservative, anti-communist editorial worldview.
• The original private equity investors were wiped out, and lenders took over the brand.
• The U.S. edition survives with reduced frequency and marketing built on nostalgia and shared family reading.