Getting a piece of the contract action

The contract magazine sector is growing rapidly, with mainstream publishers and media groups fighting for a slice of a very lucrative cake

Once perceived as the poor cousin of the magazine world, contract publishing is now attracting both Fleet Street hacks and glossy magazine journalists, who are injecting glitz into the world of customer magazines.

According to a recent Mintel report, the contract publishing industry was worth £227m in 2000, a rise of 15 per cent since 1999. The market has more than doubled in value since 1995.

The report adds that Omnicom, which owns Redwood Publishing, Premier Media Partners and Specialist Publications, dominates the sector, with Redwood controlling over a quarter of the market by value. Other media groups that work in this sector include Chime Communications, which owns AMD Brass Tacks, and Publicis, with its start-up company Publicis Blueprint.

In July, Interpublic acquired TPD, whose clients include ITV Digital. It has since been rebranded as Just Customer Communication.

The remaining contract publishers are either owned by newsstand publishers or are independent. In August, WPP Group acquired Forward Publishing.

William Reed owns Citrus, Dennis Publishing has its own customer-based division – Dennis & Beyond – and, in a bid to enter the market, the National Magazine Company (NatMags) acquired Aim Publications earlier this year and renamed it NatMag Specialist Media.

Redwood Publishing recently appointed Deborah Bee as the editor of its new contract publishing title, Project Wish (MW last week). Bee was the launch editor of IPC Media’s failed women’s title Nova.

Other members of the Nova team who will work on the magazine include Jane Fitz-Gerald as commissioning editor and Emily Anderson as features editor. Launching in mid-November, with a cover price of £1, Wish will be WH Smith’s new branded magazine aimed at ABC1 women with children.

Earlier this year, Cond̩ Nast appointed Susan Douglas Рa former Fleet Street journalist Рas president of new business. She is responsible for its contract publishing division and new media business.

Because both media groups and publishers believe that they are best suited to offer contract publishing, industry observers feel that the market is becoming overcrowded.

One press buyer says that newsstand publishers want to encourage relationships with advertisers and editorial talent in order to exploit this growing source of revenue.

Media groups – with their marketing and brand management skills – are somewhat better suited to meet the objectives of a brand.

Chris Gadsby, publishing director of BBC Worldwide’s specialist and motoring division, says: “We are not trying to establish ourselves solely as a contract publisher, but to use our publishing expertise to pitch partnership ideas. On a financial level, a customer magazine does not carry the same risks as a consumer magazine.”

BBC Worldwide moved into contract publishing last year, when it struck a deal to produce a magazine for the South Bank Centre.

Zenith Media press director Kelly Harrold says: “Publishing a customer magazine is different to publishing a newsstand title – the owner’s requirements are paramount and there is a great deal of client management. For a mainstream publisher to publish customer magazines the normal economies of scale, like printing capacity and journalistic resources, apply.”

Forward managing director Sarah Wyse says: “Contract publishing is about marketing. An agency structure like Forward’s is better placed to deliver that.”

Wyse adds that different models work with different clients. She says: “The Ikea magazine – published by John Brown – is not about customer loyalty or about capturing data, it serves merely to increase brand awareness.”

Publicis Blueprint chief executive John Wisbey agrees: “Our publishing house acts as another marketing company for our clients.”

The few independently owned companies include John Brown Contract Publishing (JBCP) and River Publishing – the publisher of Healthy. According to Mintel, JBCP controls nine per cent of the total market by value.

JBCP managing director Dean Fitzpatrick says: “Contract publishers are able to deliver editorial and design quality alongside market intelligence, whereas traditional consumer magazines lack both client management and market intelligence. The other advantage is that advertising is not an important source of revenue as customer magazines are produced on behalf of clients.”

River Publishing managing director and joint owner Nicola Murphy and River editorial director Jane Wynn believe that an independent company is better equipped to forge its own destiny and “run with its own beliefs”.

Murphy says: “Healthy is a generic title, but the latest trend in the market seems to be towards association with brands.”

The Mintel report says supermarket magazines, followed by magazines produced for travel companies and motoring organisations, have the widest appeal among consumers.

As the sector grows and more media groups and publishers muscle in, the contract publishing industry is ready for expansion outside the UK. It is also likely to see a growth in mergers, as well as consolidation among existing players.

Those who have jumped ship from the world of consumer magazines can certainly look forward to an exciting ride ahead.

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