Two years ago, EMAP seemed a very leaky ship, subject to spiralling debts and a plummeting share price. However, the company’s latest results suggest there is fresh wind in its sails; and it has the confidence to consider magazine launches in both the male and female markets.
Last week’s announcement of a 16 per cent increase in pre-tax profits, to £94m, and a seven per cent rise in turnover for the six months to September 30, has put EMAP in favour with both shareholders and the industry.
The company has succeeded in offloading US publishing arm Petersen, a loss-maker that originally cost a whopping £822m. EMAP also parted company with chief executive Kevin Hand, who many believed paid over the odds for Petersen.
Now EMAP, which owns magazines such as Heat and FHM, as well as the Magic and Kiss radio networks, has earmarked £19m for publishing launches.
In the pipeline is a weekly men’s magazine – codenamed Project Tyson – scheduled for next year. Some media experts doubt whether a men’s weekly will prove successful, given that when weekly Heat was first launched, it was ostensibly aimed at 18- to 34-year-old men. It was when Heat reinvented itself as a celebrity-driven title that it became a major success. The magazine now sells 565,484 copies a week.
Also on the cards is a “radical” woman’s title to fill the gap left by Elle and Red, which EMAP lost to French publishing company Hachette Filipacchi last year, after the latter ended an 11-year UK joint venture with EMAP (MW October 10, 2002). Kevin Hand now runs HF in the UK.
HF-UK’s ending of the joint venture, prompted by its acquisition of Attic Futura last year, left New Woman as the only women’s monthly glossy in EMAP’s portfolio.
EMAP is tight-lipped about its new titles, but many in the industry expect the publisher to create a new market with the launch of the women’s glossy.
MediaCom press director Steve Goodman says: “I prefer all magazines to have a certain niche, offering value for money to consumers as well as advertisers. Perhaps the market is crying out for something different – rather than radical – and given EMAP’s track record, it might be able to provide just that.”
Zenith Optimedia press buyer Stuart Mays does not concur, however. He hopes that the new EMAP titles will be able to compete directly with existing magazines. “Arguably, EMAP doesn’t need to invent a new market to launch a magazine. It has the expertise and the money to launch a heavyweight title which will be pitched against developed brands,” he says.
Some observers also predict that the EMAP launches will encourage rival companies to bring out new magazines, creating a buzz in an industry which for too long has been cowed by a struggling advertising market. IPC Media is rumoured to be developing a men’s title for launch next year, though the publisher denies this. New titles are also expected from HF-UK and CondÃ© Nast.
It is nearly three years since the market saw major launches in the women’s and men’s markets from the big players – Red was launched in 1998; BBC Magazines launched Eve in 2000; IPC tried to relaunch Nova, but failed, in 2000; EMAP launched music magazine Kingsize in 2001, but eventually shut it down; and CondÃ© Nast began publishing the first handbag-sized glossy, Glamour, in 2001.
Last year, however, launches were rather thinner on the ground. EMAP rolled out celebrity-driven Closer – which was followed by Richard Desmond’s copycat, New!, this February. James Brown’s IFG introduced Jack, but IFG has now been sold to Dennis Publishing.
Glamour publishing director Simon Kippin says: “There is always room for genuine innovation in the magazine business. The trick is not in the launch but in making a success of the new product development.”
According to the latest Audit Bureau of Circulations figures, Glamour sells 576,832 copies a month. It has overtaken its closest rival, the National Magazine Company’s Cosmopolitan. Cosmo’s circulation fell by 1.7 per cent year on year, to 462,157.
Kippin adds that, to compete in the saturated women’s glossy sector, EMAP will need to recreate the success of Elle. “That, to my mind, is an extremely tall order,” he says.
Numis Securities analyst Lorna Tilbian is more positive about EMAP’s future. She says: “EMAP’s long-term growth prospects depend on the success of its new product investment. The group has an impressive track record in this respect, and high-profile successes such as Heat and Closer continue to drive growth in a challenging environment.”
EMAP’s success in the publishing business is mirrored in its radio investment. Advertising revenues rose eight per cent at radio division EMAP Performance. The company also won the lucrative West Midlands FM licence with its Kerrang! format. Tilbian says EMAP is well placed to exploit digital listening, although converting audience to revenues may be an uphill struggle.
If EMAP can continue the trend of populist innovation it began with Heat, its imminent moves in the glossy monthlies market could be just the thing to cement the company’s resurgence.