Media Guardian yesterday turned the spotlight on to paid for magazines with a pair of features that underline how difficult magazine publishing in the UK has become.
Firstly John Plunkett looked at some of the more general issues facing the industry – lack of new launches, closure of many titles, difficulty in monetising iPad and digital editions – http://www.guardian.co.uk/media/2011/jan/24/magazines-free-media-launches while Peter Kirwan put Haymarket’s business under the microscope.
If anything it is the latter feature that puts the the industry’s problems into sharp relief. Haymarket, once a bastion of sucessful consumer titles with a thriving B2B sector, is now heavily in debt with (and this is astonishing) Thenhurst Agricultural Ltd, the Haymarket Group subsidiary that owns Lord Heseltine’s 18th century mansion and 55-acre estate in Thenford, Northamptonshire, offered as security to RBS to make them feel a little more comfortable about the £126 million the company owes.
Banks tend to see debt in a very different way now than they did a few years back and with an operating profit of just £15 million that debt is sure to feel like a lead weight around Chair Rupert Heseltine’s shoulders. The shock news about the economy http://www.bbc.co.uk/news/business-12272717 probably won’t help either.
Ultimately Haymarket, and to be fair a lot of its rivals, invested massively between 1995-2008 in expanding into other countries. Now the with the Internet delievering online global media brands (ie largely US based ones) and with core media brands in decline that move doesn’t look quite so savvy.
Haymarket also faces the problem of monetising B2B brands which will be further exacerbated this year by the retraction in the public sector – one-third of Haymarket’s B2B revenues come from this source.
Not all is doom and gloom. According to The Guardian ‘Publishers are nothing if not optimistic. Advertising revenue in the consumer magazine sector was up 5% in 2010 and is forecast to rise another 2% this year.’
I do think though 2011 will see a major shake up in magazine publishing. There will be acquisitions, consolidation and closures. Most of all publishers will look to protect their key brands by investing heavily in digital accompaniments such as apps, iPad mags and websites. It is going to be an interesting ride.