As a lifelong business magazine publisher, I am disappointed by Reed Elsevier’s decision to put New Scientist and Farmers’ Weekly up for sale. To me, there’s a whiff of panic about publishers’ current behaviour.
The move might be welcomed by shareholders and the City now, but I’ll predict that in a few years’ time, when these established, iconic magazine brands have been nurtured and made more efficient in others’ hands, any sale will be seen as short-termist and wrong. The shareholders of Reed Elsevier and Emap won’t feel so happy when a private equity owner, for instance, has built a successful online business on the back of a print brand, and floated or sold the business for £5bn-£6bn.
Yesterday I read that Facebook traffic appears to have reached a peak. While social networking is clearly no flash in the pan, this news reinforces my belief that it takes years to build a brand with deep roots. New Scientist and Farmers’ Weekly are two of the best brands around.
Sure, the media sector is changing. Any publishing business over-reliant on print advertising will find itself isolated from market needs. And reader behaviour is clearly altering by the day, with ever greater appetite for instant, online, mobile news.
I have huge respect for Reed CEO Sir Crispin Davis and when he says that, as a result of this move, "Reed Elsevier becomes a more integrated company with significant savings in cost structure", all of us in media need to take notice.
However, truly "integrated" media will surely continue to be built around central print and magazine brands. Building on a robust, physical foundation, online, events, exhibitions and all the other requirements of a modern media business will have the greatest chance of success. Our experience with two market-leading magazine brands – Real Business (for entrepreneurs) and Real Deals (for European private equity) – is that the print publication provides the brand leverage for high-margin face-to-face and online opportunities that the commercial sector really wants.
Even if I’m wrong, why is the print media sector so popular with the investment community – and not with the industry’s big players? Why are private equity firms queuing up to grab hold of stunning brands like New Scientist and Farmers Weekly? One can only assume that they know something about the future of magazine publishing that large publishers such as Emap and now Read Elsevier don’t? (For transparency’s sake, our business is private equity-backed – by LDC – and we, and they, have long-term faith that genuinely integrated media brands will be built with print as a key element.)
And why, if print publishing is on its last legs, is contract publishing growing at a faster rate than ever? Major FTSE 100 corporates – such as our most recent contract publishing client, HSBC – increasingly want to communicate with their customers through print publications?
And I haven’t even mentioned the likelihood that the media marketplace will become saturated with web brands.
All of us in media and publishing need to think long, deep and hard about our revenue and publishing mix. Whatever comes out of such deliberations, one thing’s for sure: strong brands with real reader traction will remain at the very heart.
Mike Bokaie is chief executive of Caspian Publishing. Caspian was formed in 1996, is a £10m-turnover B2B publishing and media business. Key brands include Real Business, Real Deals, the CBI magazine Business Voice and the Asian Women of Achievement Awards. Caspian is backed by LDC (Lloyds TSB Development Capital).
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