Murdoch tests the magazine market

James Livesley reports on the challenges facing News International as it launches into a crowded sector.

The magazine launches from News International, in early 2006, of Love It, a women's real life weekly, and Inside Out, a home interest monthly, will provide another test of a UK newspaper publisher's ability to adapt its skills and resources to a different market.

In the US and continental Europe, such mixed publishing businesses abound, but previous attempts at diversification in the UK have had mixed fortunes.

This is not the first time NI, the UK's largest newspaper owner, has tried to crack the magazine market. Those with long memories will recall that these efforts date back to 1987 (see box).

More recent ventures have included a horoscope title, Know Your Own Destiny, fronted by News of the World astrologer Mystic Meg and The Sunday Times Travel magazine.

Now NI intends to be a serious player again in the magazine market and plans to launch three titles in 2006, with more on the drawing board. NI veteran, Camilla Rhodes, the News Group Newspapers' managing director, moved across to become managing director of the new magazine division in September.

Bold move

It's a bold move given that the magazine market has never been so competitive. Recent high profile launches have required eight-figure marketing budgets to make sufficient noise to get that ever important shelf space in supermarkets.

Yet, faced with long-term declining newspaper sales, it is not surprising newspaper owners are seeking growth through another medium where there are synergies. Rhodes admits this a big motivator. "The readership of national newspapers has been gradually declining and falling away, while readership of magazines has been on the up, so it makes total sense for us to be occupying that space," she says.

The strategy is backed up by research among NI readers. "Our strategic planning operation gives insights into our readers and their preferences. We're clear about what they want," adds Rhodes.

While the new magazine boss is keen to point out the magazine division will be a separate company from the newspaper operation, it will leverage the strength of all NI's businesses.

"I can't think of any other publisher who has that capability," says Rhodes. "Richard Desmond gets close to it through content sharing and cross-promotional activity, but Northern & Shell does not have the reach that NI has," she claims.

Furthermore, she says, the strategy has backing at the highest level. "I spoke to Rupert (Murdoch) a couple of years ago about a magazine idea. He wasn't particularly up for it then, but five months ago, I presented three new magazine ideas to him and he was up for it then."

As an example of NI's leverage, a million copies of a sampler of Love It will be distributed in the Saturday issue of The Sun in the week before the magazine's official launch on 6 February.

However, IPC Media's editorial director Mike Soutar questions this tactic. When IPC's real life weekly Pick Me Up launched in January this year, three million copies were distributed with five IPC women's weeklies, "to women who buy women's weeklies," he says. "The Sun is bought by a broader spectrum of readers and they are people who buy papers."

Magazine publishers also question the extent of the synergies between papers and magazines. Colin Morrison, chief executive of ACP-Natmag, which will launch a rival real life title, Real People, around the same time as Love It, doesn't believe they are closely related businesses.

Fierce competition

He highlights retail shelf space as an area where established magazine publishers will compete fiercely with the new arrivals. "To ensure sales of magazines at retail is an entirely different game to newspapers," adds Morrison. Yet it seems inconceivable that a publisher that sells more than nine million daily and Sunday newspapers will not be able to use some leverage on retailers.

The synergies on advertising sales are more questionable. Rhodes says that cross-media deals will only be offered if "there's a requirement or a need on behalf of the advertiser". She is keen to emphasise that the ad sales teams will be run separately.

Then there is editorial content. NI will need to make a leap upwards in quality from the free newspaper supplements it currently produces, if it is to compete and get people to buy its magazines.

NI will also have to be careful with attempts at newspaper branding and cross-promotion. If readers associate the magazines with free supplements, that will surely undermine the perception of the sales value of the titles.

NEWS INTERNATIONAL'S MAGAZINE HISTORY

- Murdoch Magazines set up in 1987 and sold to Emap in 1991. Magazines included New Woman

- News International launches Know Your Own Destiny in January 2000 and closes it in September 2001. Two years later, NI launches The Sunday Times Travel

- NI plans consumer magazine activity with the launch of three titles in 2006.

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