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The year ahead in the magazine industry
Stuck in the middle
Volume sales or ultra-niche appeal will prove vital this year - and Bauer's Grazia could be a bellwether
It does not look like an easy 12 months ahead for the magazine industry. But by the time 2009 draws to a close, larger publishing houses in the business-to-business and consumer sectors will be looking increasingly dominant, while smaller, weaker titles will wither under the strain of the downturn. Publishers may be hoping to escape a big sales fall, but they are still gloomy about what 2009 might bring - not least if it's a severe advertising slump. Maintaining or increasing revenue from ads will be the biggest challenge for magazines from all sectors this year. Most insulated perhaps are the top-end glossies - the Vogues, GQs and Elles - which, while not recession-proof, are unlikely to be hit hard by a plunge in advertising revenue. Premium advertisers have limited places to promote their goods and will be concerned about losing front pages of the glossies - prime real-estate in their eyes - to rival brands.
Niche-appeal consumer titles that rely on devoted, engaged readerships are also more favourably placed than most when it comes to advertising. Mass- and mid-market consumer titles, many of which saw circulation decline in 2008, and where advertisers have a greater range of options, will find it more challenging. This year greater emphasis will be placed on editorial in these titles: get the quality of content wrong and magazines could find themselves in real trouble.
Large publishers such as IPC Media, Condé Nast and Future Publishing, which have invested in extending their brands into TV, web, mobile, radio or shopping, are more likely to weather the impact than those with standalone products or thinner portfolios of titles. Economies of scale help larger companies to spread costs, and the clout they can wield with suppliers also helps them into more favourable positions. In addition, advertisers are also likely to focus their budgets on key titles. Which could leave free magazines, with their heavy reliance on advertising as the primary source of income, with some real challenges.
For consumer publishers, then, the strong will get stronger and the weak will suffer most. And this is broadly the picture in the B2B sector too, which is likely to see some loss-making titles closed and the position of market leaders reemphasised. A point underlined by news last month that Reed Elsevier had abandoned the sale of its trade business unit, Reed Business Information, the publisher of Variety, New Scientist and Farmers Weekly. Sir Crispin Davis, chief executive, said the unit had more value than could be realised by a sale in the worsening economy. Reed will now look to sell it "in the medium-term when conditions are more favourable". This could be a while yet.
In other areas, finance titles are expected to see the greatest consolidation. Incisive Media's Mortgage Solutions magazine decided in December to suspend its print run for the first quarter of 2009 and to rely on its website and email alerts. In November, Centaur reduced the free distribution of its Mortgage Strategy magazine by 13%. The business titles that remain could well see more of these decisions as publishers cut distribution costs and rely on websites and targeted distribution.
But how to get online to pay? Business publishers may look at greater innovation online to find revenue that goes beyond the blunt approach of either subscription or open access. The Financial Times, for instance, allows users to access a certain number of stories free each month, while heavier use of the site and access to other editorial is limited to subscribers. Consumer titles are equally likely to look at their web operations - although the focus will be on ways to deliver more audience to print advertisers they want to bring over to the web. NatMags, through its web division, Hearst Digital, spent a large part of the past year developing online communities around its editorial output.
Publishers could also use relatively inexpensive web-based titles to experiment editorially, and integrate printed and web products to a greater degree. Eyes will be on a number of consumer fashion titles to see if they can win back some of the audience lost to independent fashion blogs.
Consumer launches will be few and far between as publishers keep their hands in their pockets. Launches that do occur will probably be for highly targeted groups - and it is likely to be a similar situation in the business sector. "Ultra niche" will be the watchword for any B2B launches.
Condé Nast is launching two niche consumer titles: Love, a twice-yearly fashion and style magazine under the eye of the former Pop publisher Katie Grand, and a UK version of the US technology magazine Wired.
Meanwhile, publishers will be eagerly looking at the subscription levels of entrenched monthlies as an indication of how they are faring in difficult times. Bauer's weekly high-end fashion magazine, Grazia, might prove an unusual kind of bellwether in the coming year. If it wants - or needs - to increase circulation it will need to run editorial that appeals more to the mass market. But mass-market editorial could put off some of its more luxurious advertisers. Watching where Grazia's priorities lie during the next 12 months may tell you about the and confidence of the sector.
But perhaps the most compelling mark on the horizon is the government's October powwow for the creative industries; a bright spot in what might well be a fairly gloomy year of cutbacks, closures and potential job losses.
The insider: 'The web is a hungry beast'
We have given up trying to guess what senior management is up to. Are they working out their redundancy packages while firing off CVs, or are they planning another "restructure", which means more job losses and cost-cutting at our business-to-business magazine?
There is one person who knows everything. He is the HR director, a man whose name I hardly knew until a few months ago. Like Gordon Brown, whose cheery disposition seems to increase as the economy worsens, the HR director has blossomed under his new workload. He has taken to wearing a tie and looking stressed.
When the senior managers and the HR director come out of their interminable meetings, they send us emails partly to remind us that they are still around, and partly to cheer us up. The emails contain bad news (the economy) and good news (we are doing better than our competitors). They promise clarity and transparency - and then the senior managers disappear back into another meeting.
This sense of panic is a new phenomenon and it's catching. Although I'd like to think that market knowledge, journalistic skills, a shelf full of awards, and a passion for my subject will stand me in good stead I am no longer so sure.
Yet B2B editors know their sector inside out and edit magazines that have been around for decades. We have loyal readers who rely on us for industry gossip, as well as taking up the cudgels to fight their corner. But is that enough?
B2B publishing may not be in freefall, but if the sector we are reporting on goes down, so do we. For six months we've watched as the economy has slid into recession, and we've done what every publisher and editor does when times get tough: take out headcount, cut costs and save on pages.
Though everyone has done all this, you can't help but get the feeling that as advertising revenues continue to nosedive, the bean counters will want more.
If this all seems too gloomy, the corollary to it is that many B2B titles are cyclical and if you edit a magazine whose industry is on its knees, all you can say is that it will come back. However, hovering over us - the reason this recession is different from any previous one - is the web.
The web is a hungry, predatory beast, which costs publishing organisations millions of pounds of investment. Very few people have managed to make the web profitable - but publishers love it.
It doesn't matter if your page impressions are only increasing thanks to the thousands of students around the world who are all writing the same thesis, because it's the only graph with a line going up, instead of down. But most of all, publishers love the web because, as a way of disseminating news, it's cheap.
The big question for publishers tapping next year's projected losses into their calculators is do you even need journalists?
Industry opinion
Stevie Spring
chief executive, Future Publishing
chief executive, Future Publishing
I'm expecting a mixed 2009 in the magazine market: general interest, bad; special interest, good. Nice to have, bad; need to have, good. Those publishers producing magazines that are embedded in people's lives, that play an important part in people's hobbies and interests, will weather the storms much better than those producing content that can be had quicker, cheaper, in digestible bite-size chunks online.
Nicholas Coleridge
managing director, Condé Nast
managing director, Condé Nast
Next year will be a challenging time for magazines, though I'd rather be working in the glossy industry than any other branch of the media this year. Circulations will hold steady for blue-chip titles, but deteriorate for peripheral ones. I expect some of our competitors to shutter loss-making titles. On the advertising front, it will be particularly tough for mass-market and middle-market titles, and we certainly don't expect to be unscathed at the quality end.
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