News that the parent company of OK! magazine is set to float for an
estimated pounds 500 million shouldn’t come as a great surprise - most
large publishers who haven’t floated are set to do so. But the
aggressive, cut-throat style of the company’s founder and owner, Richard
Desmond, will be an interesting prospect for others to take on.
Desmond’s accountability to a board of shareholders will no doubt cause
a few wry smiles around the industry.
Saying that, the success of Northern & Shell and its diverse portfolio
of products is enough to whet the appetite of anyone seeking a good
investment opportunity. Desmond’s pledge to overpower OK!’s older
Spanish rival, Hello!, has recently been fulfilled, with the magazine’s
sales hurtling above the 500,000 mark while Hello! hovered just
How did he do it? OK! has reinvigorated the weekly magazine market and,
rather than choosing unreachable European royals, welcomed the more
attainable soap, football and pop stars into our homes. While the more
traditional weeklies may be floundering, advertisers have the
alternative of a booming celebrity magazine sector.
Desmond’s business staple may be less palatable to some, with magazines
such as Asian Babes, Forum and the adult cable TV station, The Fantasy
Channel, helping to fill his coffers, but this sector is big business.
Desmond’s plan to use the money gained through flotation for expanding
online ventures is vital to the company’s growth.
The potential of an OK! website and the e-commerce services which could
be spun off the back of it are enormous.
But there is another reason why Desmond is willing to answer to a board
of shareholders. OK! has launched in other European markets and, as we
can see from the likes of Dennis Publishing and Emap launching magazines
in the US, there is a need to discover new overseas markets in order to
maintain growth. It was interesting to see in the latest slew of
six-monthly ABCs that a lot of the traditional magazine sectors are not
enjoying exponential growth, and if the opportunities to go niche are
limited it’s time to move on to pastures new.
The amount of money from venture capitalists and private investors in
the City presents great opportunities for publishers to reinvent their
businesses. With the Time Warner AOL deal confirming the premise that
content is king, this sector is benefiting from a renaissance.
Publishers with strong brands and focused target audiences are ripe for
development in online media, even if they are struggling to adapt to the
Within the next year, it is likely we will see the biggest UK publisher
launch itself into the public sector, with IPC’s investor, Cinven,
hoping to see a return on its substantial investment. So who would you
put your money on? I won’t say anything, of course, because I wouldn’t
like to be accused of any unorthodox trading activities.