In an interview in yesterday’s Australian Financial Review, Bauer CEO Matt Stanton forecast that there would be more magazine closures as well as some launches as the business responded to title performance. Newsagents with a copy of yesterday’s newspaper should read the article – page 38.
The bigger story in the AFR article is the growth in digital subscriptions with Stanton claiming 20 to 30 percent growth quarter on quarter. He says they have 116,000 tablet subscriptions across their titles.
Stanton I think mistakenly says that tablet subscriptions are pure profit once you have the back end setup costs covered. This presumes that you have a print product to cover all editorial costs. My reading on the topic indicates we are not seeing people embracing both platforms in large numbers – it is digital or print. So it would be wrong to say that a digital subscription is pure protect. It must wear part of the content creation cost.
The AFR article reports Stanton saying its feasible Bauer could achieve 500,000 digital subscriptions across titles such as AWW and Gourmet Traveller. The road to such an achievement is by way of current print sales. I expect strategists in all print publishing businesses see the current print products as the bridge to the platform they expect one day to overtake print in sales and value to the business. This is why publishers will continue to tell newsagents that print is important to them for some time yet.
An area where the company could save is in oversupply. There are several Bauer titles I’m receiving where sell-through is lower than 50%. These titles are loss making for us. The continued excess supply does not make sense.
They have 116,000 digital subscriptions across all titles. I seem to recall that in the recent television series “Magazine Wars”, that both New Idea and Womans Day were close to 1 Million copies each per week at the time – and thats just on two titles.
Its all about advertising, and aside from what I perceive as an ineffectual advertising medium, Its going to be a struggle to attract advertisers on those digital subscription numbers.
I doubt the ladies I see currently buying the AWW will go digital anytime in the near future. Matt Stanton’s problem is getting new readers for the AWW. Meanwhile, we newsagents move on, selling printed copies of the many many alternative titles : )
I think many newsagents will be surprised how quickly people will adopt digital once we see a few of the big dominoes fall to a digital only platform. The cost of tablets is decreasing so fast that we could realistically see magazines offering digital subscriptions with “free” tablet hardware for those demographics less likely to take up the technology of their own accord.
Once magazines can find the right format for digital (that isn’t just an electronic copy of a magazine) then the game will take on a much faster rate of adoption. At the moment were still in the earky adopter phase of digital mags.
Advertisers will follow the consumers, provided that the new platforms integrate advertising better than they currently do. I actually think its the perfect medium for advertising – it’s just not being used very well ATM. Publishers will also have to base their business models around the fact that digital advertising is less likely to bring in the same amount of revenue as print. They’re competing for advertising dollars against cheaper platforms like Google and Facebook.
There is an article in Friday’s Australian Newspaper in “The Deal” Magazine regarding Bauer Media and Magazines focusing on Yvonne Bauer and where Bauer is headed. Under review for closure is Zoo Weekly and Australian Geographic. Bauer is also looking to buy New Zealand mags like their Women’s Weekly. See the video interview at http://www.theaustralian.com.au/thedeal