If the Hamburg-based media conglomerate Bauer Media buys Australian Consolidated Press’s magazine stable — as The Daily Telegraph predicts today — it will draw howls of outrage from the Buy Australian crowd.
Australian Geographic founder Dick Smith was none too pleased by the prospect, telling Crikey that “people who want to influence our media should have kids in our schools. I support strong media proprietors. The good thing about Kerry Packer is that he made decisions that weren’t just about profits — like keeping The Bulletin operating. The US forced Murdoch to become a US citizen to buy up over there and I like that.”
Magazine veteran Ita Buttrose had a similar take, telling The Tele: “Soon everyone will own Australia and Australians will own nothing. I suppose this is the price you pay for being part of the global economy.” Indeed, watching The Australian Women’s Weekly join Vegemite and Fosters on the list of Aussie icons owned by foreign corporations would be a blow to Aussie pride. But there are also reasons for optimism.
First, Bauer’s entry into the market wouldn’t diminish media diversity — as would be the case if SevenWest Media, which owns the Pacific Magazines stable, took over ACP, as has been widely speculated.
Secondly, media owners — and the board members they appoint — are routinely bagged for lacking media experience. You certainly can’t say that about Bauer, a family-owned company with print running through its veins. Bauer sells 38 million magazines a year including Kerrang, the world’s biggest selling rock magazine, Grazia and FHM in the UK.
It’s also not burdened by debt like CVC, the private equity firm that owns ACP and Nine. This would allow it to more aggressively take on Pac Mags, which has been gaining market share over recent years.
“[CVC is] trying to manage their way out of a fiasco,” said media analyst Steve Allen. ” Would Bauer be more adventurous? You’d have to say yes. Would they market their titles better? You’d have to say yes.”
Stockbroker Roger Colman told Crikey, “Pacific Mags have been eating their lunch and the fact they’re selling is a good thing. David Gyngell is a TV executive; not a magazine man.”
There’s no doubt that ACP — like most print publishers — is struggling. Allen says ad revenue for magazines has been down by 10% over the past year and circulation is declining across most titles. The latest Australian Bureau of Circulation figures showed ACP’s NW down 8.6%, Take 5 down 7.2% and Women’s Day down 5%. Men’s magazines Zoo Weekly and Picture have experienced huge double-digit declines.
So why would Bauer be keen to buy? “There are opportunistic buyers trying to buy at the bottom of the market then wait for the good times,” said Allen. “Australia remains one of the top two or three magazine markets in world — we are a very attractive market for an international publisher.”
Allen said a new ACP title would be likely to kill off under-performing titles. “Some are on the sick list and they need to make a judgement call about whether they’ll return to profitability. If not, they should cut them off.”
BBY Limited media analyst Mark McDonnell said a Bauer takeover would offer significant opportunities for content-sharing between publications — a potential boon for ACP. He added that magazines that cultivate carefully-defined demographics are likely to have the longest life spans.
“Magazine companies need to focus on marketing and distribution rather than trying to sell copies by impulse buys at the supermarket checkout. It’s about sustaining an audience through the quality of the content and targeting subscribers through good offers.”