Amid all the recent drama enveloping Emap, the analysis focused pretty much on just one issue: digital. Or, to be precise, Emap's digital strategy. Or, even more precisely, its historic lack of one.
As the chief executive, Tom Moloney, rode off, not too gloriously, to a remote pasture, fingers of blame were pointed in his direction. The allegation being that he failed to transform Emap's consumer magazine division into a multi-platform proposition with a significant online presence.
Observers are asking whether these issues were Emap-specific or emblematic of a magazine industry lumbering into an uncertain future. The media analyst Lorna Tilbian's comment on Emap's situation could, arguably, apply to its rivals: "The group has indicated it is satisfied with its strategy of 'rewiring' Emap to deliver faster revenue growth, but is looking for a more vigorous execution of this strategy.However, Emap's strategy could prove too little, too late in consumer media, as rival websites have a significant lead over its offerings, while moving from a cover-price model to one more driven by advertising could cause major disruption to the group's revenue base."
There are two big issues at play here for all consumer magazine publishers looking to move online. The issue of losing cover-price revenue, and the presence of lean, fit, opposition in the shape of networking sites. Arguably, the buzz around these brands is louder than that around more established media such as Emap's Heat and Conde Nast's Glamour.
1. The debate over Emap's broader digital strategy overshadowed its unveiling of the details of Heat's new website, Heatworld.com. What should have been a glorious launch seemed to supply grist to the mill of those seeking an example of digital activity that could have been signed off years ago. That said, the Heatworld launch squares the circle of Heat's cross-platform offering (it is now available in print, radio, online and mobile formats), and offers unique content not available in the print edition. It ticks the Web 2.0 box by offering discussion forums and user profiles. Emap claims the launch will "future proof" the Heat brand and its revenues. Advertisers such as Rimmel and Impulse have climbed on board, but Heatworld's competition is strong.
2. Revenues will not necessarily follow every consumer magazine's online launch. Advertisers already have plenty of online options, and sometimes at a fraction of the cost that magazine publishers are attempting to extract for their online properties. Mark Gallagher, the executive director at Manning Gottlieb OMD, says: "The main issue is that publishers will need a strong brand to take into the digital arena. There are already strong brands around and we can reach huge audiences using Facebook - which now has 3.5 million users. There are economies of scale to be had in using these sites, and it's hard to see any consumer magazine achieving this scale." Observers suggest that using networking sites can be up to three times cheaper than advertising on magazines' websites.
3. The majority of consumer publishers are wise in the knowledge that it's no longer good enough merely to transplant a print product online. The good operators use the strength of the magazine brand to leverage unique content and generate advertising revenue. There are signs this is paying off. Despite the gloom around Emap, its digital revenues have risen by 32 per cent to £120 million (albeit including its business-to-business division); The National Magazine Company has invested significantly in online properties beyond launching versions of its magazines (these include the female-oriented sites Handbag.com and Getlippy.com); and IPC Media (often cited as a pioneer of user-generated content via NME.com) has upgraded the status of digital media by appointing its digital director, Neil Robinson, to its board.
4. Consumer publishers have realised there may be some value in launching standalone online brands. Dennis Publishing's men's title Monkey is a prominent example and already has a registered online circulation of more than 200,000. Publishers also recognise that online provides a potential new revenue stream in the shape of transactional websites. In March, Conde Nast launched Stylefinder.com, its first online-only venture, which combines online shopping from major fashion and beauty retailers with style advice.
WHAT IT MEANS FOR...
MAGAZINE PUBLISHERS - The broadband revolution, which accelerated in 2005, made it necessary for publishers to reconfigure their digital strategies. Many are now working on creating dynamic online content, which includes video streaming.
- This has led to a debate over whether magazine companies have sufficient technical and creative skills in-house to provide these new products. Accordingly, they are starting to hire editorial staff from varied backgrounds to support print journalists.
- Publishers with audiences at the younger end of the market, notably the likes of Emap and Hachette Filipacchi, face the biggest challenges. Sales in the men's and teen sector have been hit by changing reading habits and the success of networking sites.
- As some readers migrate online, publishers face the potential issue that their online products may not command the same advertising premium as their print brands. As Manning Gottlieb OMD's Mark Gallagher says: "Some magazines online may be making money and contributing to profits, but there's no way they can be making the contribution that print products do."
ADVERTISERS - Magazine brands online can be attractive to advertisers looking to emphasise an association with a strong print brand. They can also use magazine sites for more response-related and transactional activity.
- However, agencies point out some magazine publishers may be overestimating the value of their audiences. The sheer scale of the young audiences offered by networking sites is attractive to some advertisers.