<PAGE>   1
 
                                                FILED PURSUANT TO RULE 424(B)(3)
                                                      REGISTRATION NO. 333-50853
 
                               SOURCE MEDIA, INC.
 
                                SUPPLEMENT NO. 1
                       TO PROSPECTUS DATED JULY 28, 1998
 
     The following information concerns additional selling shareholders that are
being added to the table on page 10 of the prospectus dated July 28, 1998.
 
<TABLE>
<CAPTION>
                                                             SHARES BENEFICIALLY
                                                             OWNED PRIOR TO THE
                                                                  OFFERING
                                                            ---------------------    SHARES BEING
                   SELLING SHAREHOLDER                        NUMBER      PERCENT      OFFERED
                   -------------------                      ----------    -------    ------------
<S>                                                         <C>           <C>        <C>
Gleacher & Company........................................  119,013.75       *        119,013.75
Rotan & Co., on behalf of PaineWeber High Income Fund.....      44,700       *            44,700
</TABLE>
 
           THE DATE OF THIS PROSPECTUS SUPPLEMENT IS MARCH 15, 1999.



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