6 ways for magazines to build their future

Almost 300 years ago, a posh Brit called Edward Cave published the world’s first magazine. Last week, 400 metres from the London birthplace of The Gentleman’s Magazine, Cave’s 21st century successors were whipping themselves into a frenzy of enthusiasm that belied industry statistics of falling revenue, profit and readership.

Magazines on the rack

UK magazines on the rack

The effervescent UK Professional Publishers Association’s (PPA) annual Festival gave voice to the distinctive traditions of magazines and cheered-up hundreds of true believers who publish them.

The air was full of the success of Conde Nast’s 98-year-old UK edition of Vogue that has just celebrated its most profitable year, with a circulation of 200k, and a web audience of 2.2m monthly uniques. Hearst’s 93-year-old, growing-strongly Good Housekeeping now has a print circulation of 416k, almost 50% from posted subscribers – a smug stand-out in the newsstand-dominated UK market. And it has a solus readership of 46%. The legendary listings+ weekly Radio Times has all but stabilised its print circulation at 750k, despite increasing the cover price by 50% in the last four years.

The Economist – which 25 years ago promoted itself with the slogan “The Economist: not read by millions of people” – has scored a 300% surge in digital sales to more than offset a print decline, giving a combined UK average weekly circulation of 224k – almost 20% up since 2009. Relative newcomer, The Week recently celebrated its 20th anniversary with a 33rd consecutive circulation increase, reaching 200k in print and 27k in digital sales.

Falling revenues

The Week: still growing after 20 years

The Week: still growing after 20 years

Those headline successes, spread thinly across the UK media landscape, are an ironic reminder of the churning market where 447 magazines lost sales at an average annual rate of 6.5% in the second half of 2014. After more than five years of falling circulations, most of the country’s largest paid-for magazines fell back further last year.

The six best-selling celebrity weeklies, which fuelled media company profits in the years before they were upstaged by Twitter and YouTube, together make the same profit once generated just by Bauer’s Heat magazine whose sales have fallen by 55% in the past five years. In that time, the UK editions of Cosmopolitan and Marie Claire have declined by 40% and 30% respectively. And, in a year when total UK advertising spend grew at its fastest rate for 15 years, magazine ad revenues fell by 4% – to below £1bn for the first time – with further decreases forecast for this year and next. But this is only part of the story of a magazine industry that has long since ceased to be anything like a single market.

Time was when magazines shared a uniform model of printed products funded by readers and advertisers, and published by specialist companies. UK weeklies tended to depend for their profits mostly on copy sales and monthlies on advertising. But now the variations are almost endless. And the UK provides a picture of the possibilities, where a growing number of magazines are free and/or sponsored.

What is a magazine?

Some are still the core information and entertainment medium for an audience group. Others are ancillary content to a larger medium, whether digital, broadcast – or retail. Magazines are now published by an increasing range of companies, not just by traditional publishers. In the UK, the four largest circulation magazines (and 13 of the top 20) are either distributed free or sent to membership or

National Trust: UK's biggest circulation magazine

National Trust: UK’s biggest circulation

customer groups. The biggest is the National Trust Magazine, which is sent free to 2.1m households three times a year. The next three 1m+ circulation free magazines are published on behalf of  supermarket chains Asda, Tesco and Morrisons.

The others include the free weeklies Stylist (400k circulation), Shortlist (500k), Sport (300k) and Time Out (300k). Many of the other non-traditional magazines are sponsored by retailers, financial services or leisure companies. The way in which the magazine medium is being used skilfully by companies with something to sell is highlighted by Time Out, the 37-year-old entertainment weekly which scrapped its cover price in 2013 (and has just done the same in New York), in order to promote e-commerce, primarily ticket sales.

The ultimate blend of content marketing and traditional-ish publishing might be the 22-year-old Sainsbury’s magazine, a food monthly sold exclusively in its supermarkets. The 230k circulation increased by a market-best 12% in the second-half of 2014. Similarly, the hugely-successful grey-market financial services and travel group’s Saga magazine has a paid circulation of 420k. The 17-year-old Slimming World (486k) has become one of the world’s best-selling weight-loss magazines, sold to its club members. By contrast, the ASOS online fashion retailer’s magazine (486k) is sent free to customers, while its upmarket competitor Net a Porter’s new Porter magazine claims worldwide sales – on newsstands – of 150k after its first year.

This non-traditional magazine sales channel is taken further by Forever Sports, which is published by Haymarket in partnership with Sports Direct and is on sale in the retailer’s 400 stores as well as on newsstands. A variation on the theme is the 10-year-old Square Mile lifestyle magazine which has a 52k monthly controlled circulation (registered, free) in London’s financial district. The city’s booming

Stylist: free magazine now owned by newspaper group with some new thinking...

Stylist: free magazine now owned by newspaper group with new ideas

real estate agents sponsor a 78k free circulation monthly magazine which is packed with upmarket property ads – and just enough high-quality editorial.

Many of these magazines, whether free or paid-for, look like “traditional” magazines. Only the business model is different. But, then, at a time when print media finds itself exposed to fierce competition from free digital media, they look like the shape of things to come. Stylist, Shortlist, Sport, and Time Out are handed out to commuters, funded by advertising and may be regarded by consumers as “good enough to buy”. Advertisers like them too. But many other magazines are content marketing dressed to look like independent publishing. However “good” that content, it is as commercially selective as the advertising.

That blurring of traditional magazine “authority” underlines the dilemma of publishers everywhere. With half an eye on the profits being made by non-traditional magazines, they don’t know whether they should be campaigning for “magazine-media” or imitating their ultra-versatile B2B magazine cousins who increasingly draw their profits from what once were ancillary activities.

There are no easy options in a world where your lunch is being eaten by the likes of Google, YouTube, Facebook and Twitter and where consumers expect more for less. The continuing success of the best magazines helps to disguise the challenge posed to so many others. Publishers are, to say the least, finding it difficult to come to terms with a business model damaged most not so much by the loss of readers as by defecting advertisers. They need to change their game in at least 6 fundamental ways:

1. Re-invent brands

Booming advertising revenues across much of the past 30 years helped to distort print media’s relationships with readers. Publishers

Historic name, modern success

Historic name, modern success

hyped circulations in order to increase advertising revenue through cut-price promotions, bundled magazines and bulk sales. Then it all came crashing to earth. Magazines now have to get back to the basics of serving their core readers, and some will discover they have much less brand equity when it comes to exploring digital options.

So, editors and publishers must understand what their readers really want. What content is ‘need to know’ and what is ‘nice to know’? What content will readers (metaphorically) die for? And what (if anything) would they pay for it?

Like newspaper editors which once refused to believe that whole swathes of readers bought their papers primarily for the classified ads, crosswords, or horoscopes, publishers may find some uncomfortable truths if they dig as deep as they need to.

Many magazines face an uphill task to become successful brands for picky digital readers. That just means publishers should try harder to find ways of using their content and reader relationships to create new brands as well as making the most of existing ones. But the future strength of the magazine market, in digital and print, depends on getting real about brands – and about consolidation.

2. Build new business models

The whole process of magazines developing diverse media ‘channels’ is an obvious challenge to traditional profitability. And that is the point. There’s no going back to a past where print was dominant, with profit margins to match. This is a new world with fresh business models and all kinds of digital competition.

Even for print magazines, the UK growth of independent or sponsored free brands shows how the business model can be adapted. There is an obvious need to get real about long-term revenue prospects. In future, many magazines, will need (primarily) to focus on one revenue stream or the other. Not both. For all the success of Vogue, Good Housekeeping, The Economist et al, hundreds of other magazines will have to choose between being advertising-funded and free; or paid-for, with relatively little advertising revenue. Or they could be sponsored.

Net a Porter turns publisher

Net a Porter: retailer turns publisher

Many magazines are experimenting with e-commerce, especially in fashion or special interest sectors. Some are already successful. There is no doubt that retailing can represent a valuable revenue opportunity. Selling items by click-through from a print or digital page can be easy enough, especially if suppliers take the risk and hold the stock.

The tipping point comes when publishers seek to emulate major fashion retailers like ASOS and Net a Porter whose sites – and magazines – are, enticingly, pure media. Such full-scale retailing can pose an obvious challenge to the traditional credibility of magazines whose authority has been based on independent, non-supplier content – and also to their advertising revenue.

The bigger dangers, though, are the hot shot retailers themselves. ASOS and Net a Porter show that retailers find it easier to become media players – by adding teams of journalists or employing content marketing specialists – than media companies will find it to become full-blown, risk-taking retailers with all the manufacturing, marketing and distribution challenges involved.

Magazine publishers need, therefore, to be very clear about e-commerce strategies. Success is more likely in specialist sectors. Or where retailing is a relatively small part of a magazine and involves its advertisers (i.e. content marketing). Or where full-blown e-commerce can be managed separately from a conventional magazine brand. At that point, of course, you’re a retailer so you had better be good at it.

Meanwhile, publishers have to keep magazines profitable.

Radio Times: never mind the price

Radio Times: never mind the price

D.C.Thomson, the long-established Scotland-based media group, which recently completed its acquisition of ShortList Media (publisher of free magazines Stylist and Shortlist) has now invited publishers to consider sending out magazines with its daily newspapers.

It suggests the idea as a way of promoting paid-for magazines. But it could so easily morph into an opportunity for the low-cost distribution of advertising-funded free magazines. Such an approach could be good for newspaper sales and might even substitute for their own relatively high-cost weekend magazines.

It has got UK national newspapers thinking, and might yet tempt some magazines to go free in partnership with them. The UK’s largest daily publisher News Corp, which already gives magazine “samples” to its subscribers and also offers independent publishers an integrated printing-distribution service, may be expected to lead the way.

3. Choose your champions

There are significant magazine-media groups which insist still on describing online media as “brand extensions” as if it is digital that is challenged by systemic change. It is not a question of writing-off print but of putting it into context. And, even when publishers have managed to spread their influence onto the web, most profits still come from print – where display advertising works best. But they must still contemplate a future where a lot of print will be peripheral, at best.

It is easy to see how companies (many still managed by people steeped in print) can get sentimental about magazines. But they need new skills and lots of them. One key is to ensure that the brand champions (publishers in 20th century parlance) are people with a broad knowledge both of the audience and the multi-channel possibilities. This is part of a cultural shift from companies which once prospered exclusively from the intuition of editors to ones where most things can be measured and monitored – and in real time. More than ever, journalism must partner commercial exploitation and data management.

Vogue shows that luxury magazines still count

Vogue shows luxury mags still count

The new brand champion’s role is to compete directly with digital-only operators by exploiting the brands and content that can give traditional companies a competitive advantage.

The too-common mistake is to assume that “only” the delivery channel is changed in moving from print to digital. The difference between a print product and a digital service is just that. Media companies move from being passive providers to active participants – for consumers and marketers alike.

The truth also is that ‘digital media’ itself is a catch-all term for the vast range of possibilities. Readers become different people in digital. They inhabit an interactive world of almost infinite choice where a print brand is no longer the dominant provider of information and entertainment. The new media brand has to understand, engage with – and fit into – the consumer’s digital life. It didn’t used to be like that. Print was a cosy, well-defined world – by contrast with the wild global possibilities of online reading, viewing, listening, transacting, and interacting.

Legacy media must single-mindedly seek to control and contain its successful print brands – and, at the same time, developing its future businesses. As far as possible, publishers need to insulate these traditional profit-makers. They cannot afford to under-exploit current profits by distracting the people who do that best, even though many of these long-established brands may need (sooner or later) to be reinvented or even dropped.

Sainsbury's top-selling supermarket mag

Sainsbury’s top-selling supermarket magazine

It is easy to believe that combining the content of several print brands will become an increasingly valuable way to create new digital services. It recognises that the segmentation of print audiences and content was, inevitably, driven by production and marketing constraints that do not apply in digital media. And the content may often be more valuable than the brand.

Companies in media, as elsewhere, talk a lot about re-invention. But it’s often just talk. For magazine-centric companies, it requires major changes in people, skills, organisation, and data management.

Building multi-channel operations means empowering brands to develop distinctive characteristics, thereby reducing the scope for centralised synergies. That’s a big change from groups of magazines all buying printing and paper, and recruiting journalists and sales people. You can almost feel the pain of centralised companies everywhere trying to imagine life without their weighty service departments.

4. Choose friends, enemies and frenemies

In a world where content providers must be truly ‘channel agnostic’ and where the competition – even for quite small, discreet audiences – can include the likes of Amazon, Google, Facebook, SnapChat and Twitter, there is a growing need for alliances, partnerships and joint ventures.

After decades of print dominance, magazine publishers must master the art of sharing with companies which have the skills and resources they need. It’s easier said than done. Sometimes it will mean making friends with rivals and having relationships with platforms that might themselves become competitors. We should be instructed by the way that news media are having to pump content through Facebook – because that is where the audience is. That itself is a contrast with BuzzFeed whose successful business model

Saga: a grey market powerhouse

Saga: a grey market powerhouse

is based on news-you-can-share via social media – without the traditional view that you have to own the platform on which carries your content.

Partnerships are vital for ambitious media. It is no different from a one-time world where predatory supermarkets first started to sell newspapers and magazines in competition with long-established, publisher-friendly newsstands. Magazines and supermarkets have been frenemies ever since. They need each other, just like legacy media businesses everywhere need partners. And magazine publishers may need nothing less than large volumes of the video content which will increasingly dominate web sites.

5. Forget the past

Magazine-media’s future is all about using existing brands, content, skills and readership to create new businesses. We should never believe apocalyptic forecasts about whether print will survive or not. It will. Our examples of the changing face of the UK magazine

market show that (with changes in strategy and business model) “new” magazines can thrive – as, indeed, can some traditional ones. The challenge is to match markets with media channels in order to reinvent business models without being constrained by past products, profitability or ways of working.

Traditionally, disrupted non-media industries of all kinds have suffered through trying to cope with changed markets while not being able to stop themselves defending existing business models. If you want to create competitive new media, you have to lose your inhibitions and get past the historical baggage.

6. Get versatile

The need for magazine businesses to re-think their long-term role should dictate the careful management of traditional profit-makers some of which will thrive with or without significant digital activity. But publishers might do worse than study the best of the B2B media groups.

Slimming World: paid-for success

Slimming World: global success

Smaller, targeted sectors have long forced B2B magazines to spread their talents. Some of them now earn most of their profits from exhibitions, conferences and training,and others from selling ‘must-have’ information. Most are increasingly digital but many now use magazines, at least partly, as content marketing for their ‘new’ engines of profit.

This ‘narrow but deep’ strategy runs counter to the traditional consumer magazine model where circulation and advertising revenues, traditionally, were sufficient. Everything else was ancillary. Now, faced by fierce, digital-only competition, many more consumer magazines should pursue a multi-disciplinary approach which can provide revenue diversity, reader loyalty, and profit security.

In B2B, some non-publishing companies have pushed into media-like operations from backgrounds as diverse as market research or consulting and have met magazine publishers coming from the other direction. The competition keeps coming. But, for consumer magazines, there’s a lot to play for in a world where readers are spending more than ever before on a whole range of media, information and entertainment.

There are many reasons for magazine groups to be (almost) as optimistic as on-message UK publishers were in London last week. They have some long-established brands, strong content, and loyal readers, for whom magazines sometimes (still) represent a deep, personal relationship. Many of these audiences are natural communities and interest groups which can be exploited so effectively through digital media. But it all requires re-invention and real change. There’s no future in the past.

Context

Is Immediate Media becoming a serious retailer?

The ASOS warning for publishers

www.flashesandflames.com

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One thought on “6 ways for magazines to build their future

  1. Alex McIntosh

    May 29. 2015

    Another great piece Colin. Agree on the opportunity in e/m commerce and the pressures faced by editorial and commercial teams to get the content balance right in consumer magazines.

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