Bonnier Corp., one of the largest special-interest publishing groups in America, is set to launch a line of Popular Science-branded STEM toys. The publisher has partnered with UK-based toy-maker Wow! Stuff which won in the innovation category at Licensing Awards 2019. Elise Contarsy, SVP, Bonnier Consumer Products said in a statement that the line will premiere at the International Toy Fair in New York this month.
We continue to look for ways to diversify revenue. Consumer products are a strategic priority for the company as we explore new ways to leverage our brand equity.Elise Contarsy, SVP of Consumer Products
“Revenue diversification is key for legacy publishers”
This is in line with Bonnier’s attempts to diversify its revenue through eCommerce and licensing. The publisher had already previously sold a collection based on its magazine, Outdoor Life. It provided tips, skills, gear reviews and adventure stories on hunting, fishing and shooting sports. The collection, Guide Life, featured tents, sleeping bags, lanterns, headlamps and apparel, and was sold on www.olguidelife.com and Amazon.
“Our team of seasoned outdoor experts and contributors have dedicated their careers to testing, reviewing and recommending the right gear for every outdoor pursuit,” said Anthony Licata, former Editorial Director for the Bonnier Lifestyle Group, at the launch of Guide Life. Having their fingers on the pulse of their audience they knew what kind of gear was missing for consumers. “We decided it was time to create a line of products to meet our standards and help you enjoy a life outdoors,” added Licata.
“Working closely with our research team, Bonnier Consumer Insights, we have had significant dialog with consumers, and have a good understanding of the types of products and services they would like to see our brands offer,” said Contarsy over email to What’s New in Publishing.
“We utilize the work the editors have done to inform and inspire consumer products. It is always great to have a strong editorial product that can inspire brand extensions,” she added.
Bonnier will have products coming to market for Outdoor Life, Popular Science, Saveur at multiple trade shows and at various retail outlets, each one according to the specific needs of their industries.
They will include product licensing deals for Bonnier’s Saveur brand which specializes in cooking, entertaining, and food travel. The magazine will be launching a line of cookware this month. It will be manufactured and distributed by Hong Kong based Winnington Metal & Plastic Manufacturing, one of China’s leading custom manufacturers and suppliers of cookware and houseware products. Later this year, the publisher will also introduce Saveur Selects, a line of sauces and spices in partnership with Gourmet Warehouse at the IHA show in Chicago.
Revenue diversification is key for legacy publishers. Licensing revenue can be a great offset to declining advertising revenue. We’ve seen this strategy [successfully] applied at other companies.Elise Contarsy, SVP of Consumer Products
“When done well, it is income-generating and brand reinforcing,” Bruno Maglione, President of licensing at IMG told The Drum. “They (media companies) have very powerful, meaningful brands and are tremendous promotional platforms. They can, in addition to advertising from the licensees, promote products with their vast franchises in online and print media.”
A $517.36B market in the US
Licensing can be a source of substantial revenues for publishers. In the last few years several publishers have introduced retail and consumer product offerings, opening up new revenue streams. They include legacy firms like Meredith, Playboy, Condé Nast, and Hearst. In the US, Meredith Corporation generated $25.1B in retail sales of licensed merchandise in 2019, according to License Global.
“We are increasingly seeing a number of media outlets – across a wide variety of verticals and areas of content focus – exploring some of the wider opportunities that eCommerce potentially affords,” writes Damian Radcliffe, Journalist, and Professor at the University of Oregon. “In some cases, this means innovating and moving into spaces, such as brand licensing (exponents of which include Time, Condé Nast and other magazine publishers), which many publishers have previously been uncomfortable with.”
He adds, “eCommerce grew by 15% in the United States in 2018, representing a $517.36B market, and with global web sales in 2019 nearing $3.46T, up 18% year-on-year, this is clearly too big a space for publishers to ignore.”
Digital native publisher BuzzFeed, which got into the licensing business (it also earns affiliate revenues) a few years back has seen a steep rise in revenues. The publisher “drove more than $425M in directly attributable transactions,” according to its Co-founder and CEO Jonah Peretti. “This year will be much bigger,” he adds.
The graphic below, shared by Peretti, shows how commerce is steadily growing in importance for the publisher.
Editorial content serves as the north star
However, publishers getting into eCommerce and licensing also need to be careful, for the strategy may backfire as it did for F+W. The 106 year-old publisher filed for bankruptcy in 2019, citing $105.2M in outstanding debt after a failed decade-long attempt to reinvent itself as an eCommerce company—and the exorbitant tech contracts it signed as a means to that end, according to Adweek.
F+W CEO Gregory Osberg said the company vastly underestimated how much it would cost to run an eCommerce business, including buying merchandise, leasing warehouses, marketing products, fulfilling orders and responding to customer service inquiries. In fact, the company continued to pay for merchandise stored in warehouses at the time of the filing.
That’s something Contarsy is very careful about. When asked for advice she would give publishers looking to branch into product lines and eCommerce, her response was, “Don’t take the inventory.”
Maglione, whose team at IMG provides independent licensing services, says there are serious considerations to be made when branching out into licensing. And that his team uses “a mix of art and science” to figure out where a brand can provide extra value in any given product area.
Editorial content serves as the north star and “determines the profile of where the brand might be relevant.” The team has developed products for publishers like Cosmopolitan, National Geographic, Esquire, Harper’s Bazaar, Refinery29, National Enquirer and Billboard in Asia.
Steve Harvey, Co-founder of FabrikBrands a creative and branding agency, recommends the following questions that publishers can ask themselves before taking a plunge into extending their brands.
- Is there a desire for the new product? Can you find a USP that will sell your extension?
- Is the extension natural for your brand, or does it seem forced?
- Is your existing brand reputation strong enough to support a new product, service or marketplace?
- Do your customers trust you enough to see the value in your offering?
Radcliffe writes in WNiP’s The Publisher’s Guide to eCommerce, “In developing eCommerce strategies, it makes strategic sense for publishers to identify propositions which build on their existing relationship with audiences. Arguably, the best eCommerce products are logical brand extensions, and there are a growing number of examples of publishers choosing to generate revenue in this way.”
He suggests that as they begin to explore eCommerce, “there’s a recognition that this may impact both business culture and practice. Publishers need to be cognizant of this, as eCommerce has the potential to change dynamics within the newsroom, as well as with audiences.”
“There’s no right way to do this, but to realize eCommerce’s potential, there needs to be behavioral shifts both internally and externally.”
For a more detailed overview and analysis of eCommerce strategies being used by publishers, what’s working and what’s not, please download WNiP’s free report:
The Publisher’s Guide to eCommerce