Magazine Industry Expects Consolidation And Has Mixed Feelings About Internet, Says Survey
A new survey has revealed that UK magazine publishers regard the internet as both an opportunity and a threat to their future, and are expecting further consolidation of the industry over the next five years.
The research, carried out by The van Tulleken Company, revealed that the industry is anticipating more mergers and acquisitions in the near future, with 66% expecting further consolidation within the next 12 months. Of the 85 chief executives of UK magazine publishers surveyed, 40% thought their company would acquire another magazine publishing company within the next five years- although 60% of respondents expected their own company to remain independent for the same period. 42% anticipated that their profitability would be grown organically and through acquisition. 46% of those surveyed had launched new titles during the last 12 months, while 76% are considering launching new titles during the coming year.
Only 18% of respondents expected their company to merge within the next five years, but 84% said they would consider a trading partnership or strategic alliance with an internet business. This seems to be an “If you can’t beat ’em, join ’em” policy, as competition from the internet scored the highest number of responses as a “threat to the further growth” of respondents’ businesses, with 88%, compared to 64% for competition from other magazine publishers and 49% for a downturn in ad revenue.
The industry appears to have recognised the significance of the internet in its future, and 58% of respondents felt that magazine publishers had to develop their own websites if they are to defend themselves from digital content competition. 21% of respondents thought the internet represented a threat to the magazine publishing industry, while 40% thought that partnerships between internet companies and magazine publishers were inevitable.
The perception of the internet as a threat to magazine publishing is tempered by a hope that it will benefit respondents’ businesses. 75% of those surveyed thought that the internet represented “a great opportunity for the magazine publishing industry.” At present 90% of the companies surveyed are using the internet for business, but the majority (78%) will derive only 0-5% of their revenue from this source in the current financial year. This does not appear to be a deterrent to investment, however, as 67% consider the development of an internet strategy as “very important” and 33% “important”. 74% of respondents were willing to or had licenced or sold content to e-commerce or internet companies, while 88% intended to increase their investment in the internet during the coming year. At present 54% of the businesses involved in the survey use the internet primarily as a marketing tool.
Kit van Tulleken, who commissioned the survey commented: “The perception of the significant opportunities offered by the internet and the value it adds to content exploitation has yet to be translated into significant revenue streams. Those that successfully exploit their content on the internet will build the greatest value and, like all market leaders, will be less vulnerable to competition.”
The survey, which took the form of a multiple choice, attracted responses from a base made up of 45% business publishers, 35% consumer publishers, 12% contract/customer publishers and 8% who undertook a mixture of the above. 39% had a turnover between £1-10m and 43% over £10m. All respondents were PPA accredited.
The van Tulleken Company: 020 7235 1099
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