I can't answer for Ned, but I can tell you that here in the states, subscription prices barely cover the postage for special interest consumer magazines. Advertising pays the light bills.
Also, at least here, great (and I mean great) sell-through for a special interest consumer magazine off the shelf is 30 percent. That means for every magazine that is purchased, two get thrown away.
I don't know the sell-through numbers for magazines such as People and Time, but I imagine they're substantially better. I would guess newsstand sales are a healthy revenue stream.
But with most special interest consumer mags, you put them out there in the hope of converting newsstand buyers to subscribers, not for the income for increasing circulation, which makes your magazine more attractive to advertisers. Which pays the freight.
It's a vicious circle.