Riding a multimedia tiger requires nerve

It’s a tricky business getting your multimedia positioning spot on, as publishers are finding to their cost.

To extract the maximum from your brands, you now need multiple channels to market and these carry a heavy establishment cost. Worse, though, the advancing online revolution is making a mockery of all sorts of traditional assumptions about how those costs should be distributed. No sooner is a new strategy minted than obsolescence beckons.

Thus Chrysalis, the music publishing group that has successfully jockeyed Heart into being the premier London radio station, finds itself seriously contemplating the sale of all its radio interests. This, the same Chrysalis that only two years ago made a £115m bid (ultimately unsuccessfully) for Guardian Media Group’s radio assets in an attempt to consolidate its position in the sector.

Or how about EMAP? EMAP with its multiple interests in magazines, radio stations and television was one of the first to proclaim the multimedia mantra. Its radio and consumer magazines cross-selling proposition was notably ahead of the game, at the time.

Those halcyon days are long gone. What we now hear are profit rumblings. Boston Consulting is recommending a "restructure" aimed at producing cost savings of £20m a year; the one-off cost of implementing this restructure may be £40m. Like Chrysalis, EMAP seems to have gone bearish on its radio interests, though its chief executive is said to be against a sale.

If so, his scepticism is probably justified. Radio spend has been the frontline casualty in the internet assault; so a knee-jerk determination to pass the parcel is at least understandable. But the problem has much wider ramifications than that. Cauterising losses in radio might prove very short-term, painful and misguided. What is required is a much more sophisticated response.

An interesting insight into this problem is offered by another of EMAP’s vulnerable sectors, consumer magazines; and in particular what is happening to lads’ mags.

Not three years ago, publishers were rejoicing at the discovery of a new formula that promised to take the category to new heights. The weekly delights of Nuts (IPC) and Zoo (EMAP) for a time offset declining circulations in the monthlies, and seemed to offer a solution to weakening attention spans in the age of the internet. No longer. The latest ABC figures show decline across the board, with the segment as a whole down nearly 15% year on year. Arena, one of EMAP’s original monthly stalwarts, may soon be on the block while Felix Dennis, publisher of Maxim, seems to have confirmed the category’s deep plight by hoisting a "for sale" sign over his US stable of lads’ mags.

Note, however, that Dennis is very far from signalling a general sale of his lads’ titles. The magazine versions may be tired, but the brands themselves are still very lively. And not simply on the internet. Dennis seems to be saying there is still tremendous potential for brand extension and licensing, so he won’t be getting rid of his UK titles any time soon.

Dennis, of course, is a maverick entrepreneur, not a public company constantly assuaging shareholders’ demands. Nevertheless, he’s got an important message. Keep your nerve. Wait a little longer to see how the internet phenomenon pans out. Making the right decision is all about timing the market, not devising hasty fire sales to placate the great god Mammon.