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Spark 2018: Hearst print revenue to fall from 60% to 50% by 2020

The great and the good of the media buying fraternity gathered in London’s Bloomsbury Square yesterday to listen to an eclectic mix of publishers, analysts and buyers discuss the state of magazine media.

The Spark 2018 event, hosted by Magnetic (the consumer marketing agency for magazine media), is an annual half-day event tackling the issues affecting the worlds of magazine publishers, marketing and media.

You have to feel for Magnetic. At a time when industry disruption is ubiquitous, it’s been caught on the wrong side of the equation. Print revenues, particularly on newsstand, are falling precipitously yet Magnetic has the task of championing a declining genre.

As if to illustrate the challenge facing Magnetic, WNIP received an acerbic WhatsApp message en route to the event from an industry executive saying, “Good luck at Spark! Interested to see if it’s still peddling the idea that magazines have a bright and sunny future with wishy-washy research stats about how 99% of millennials appreciate advertising.” Ouch.

This does Magnetic an injustice because the trade body exists to promote magazine media in all its forms, not just paper. And when looking at magazines as stand-alone, cross-platform brands the picture is very different.

The theme was taken up by James Wildman, CEO of Hearst UK, who said, “Our brands are the key. What makes magazine publishers so special is the brand equity of their titles“, before continuing, “it’s increasingly understood that in a world inundated with negative news, magazine brands are beacons of positivity. They help consumers get more out of life and pursue their individual passions.” 

Indeed, as cross-platform brands, magazines are holding up well. The latest ABC results bore testament to this – a decline of 5% in total print circulation was offset by a sizeable increase in the online circulation for many consumer magazines.

That’s not to say magazine publishers can rest on their laurels. Even with brands boasting the strength of Marie Claire, Esquire, Men’s Health, Town & Country and Good Housekeeping, Wildman admitted that Hearst has its work cut out, “We have to diversify, it’s not a choice, in fact we’re not ahead of the curve at Hearst – many specialist publishers are further ahead. But what makes magazine publishers like us so fortunate is the brand equity of our titles.

As if to illustrate the challenge, Wildman let slip that, “Total revenues for print represent 60% of our turnover this year, and this will fall to 50% by 2020.” By any measure that’s a significant decline and adds further argument to the case that printed titles will soon become a luxury, niche channel. And probably no more than that.

This theme of diversification was ever-present with Campaign’s Claire Beale stating that her own trade title was, “Creating more live events, conferences, awards, podcasts, dinner debates, breakfast briefings and we are trying to improve the attention dynamic of everything we do.” Even a title as celebrated as Campaign, now in it’s fiftieth year, is having to diversify rapidly.

Yet amidst the need for diversification and the ongoing disruption, there was recognition that magazine media remains attractive as an investment. Sue Todd, CEO of Magnetic, remarked, “There has been lots of change of magazine ownership level this year e.g. Time Inc. and Dennis. Private equity getting involved is a sure sign there is a strong future for magazine media.”

But perhaps the final word should go to Claire Enders, the founder of Enders Analysis, who whilst acknowledging the strength of magazine media pointed out the best performing magazine brands (in the UK) are, “Privately owned – Hearst, Bauer, Dennis, DC Thomson, Condé Nast et al because their brands are nurtured, with careful long-term owners who invest in their titles”. These, she added, “will be hard to displace.

She could be right.

NB: All downloads of each presentation can be found on Magnetic’s events page along with their own write-up of the morning.