Magazine dawn
Guest commentary The market shows a lot of trust in magazines, but little in daily newspapers, writes Kurt W. Zimmermann.
Guest Commentary The market shows a lot of faith in magazines, but little in daily newspapers, writes Kurt W. Zimmermann.Ever heard of Meredith Corp? Maybe their shares wouldn't be a bad idea. Don't worry, I won't give you any investment tips. But it's worth taking a look at the stock market if you want to track down future megatrends in the publishing business.analysts have been observing a new trend for a good year now: the share prices of magazine publishers are performing significantly better than those of newspaper groups. In the USA, for example, the performance of a magazine publisher such as Meredith (Ladies Home Journal) clearly outperforms that of Knight-Ridder (Miami Herald) or New York Times Co. And in the UK, magazine publishers such as Highbury (Country House and Home) clearly outperform traditional newspaper companies such as Daily Mail PLC on the stock market.
In Switzerland, the situation is identical - even without stock market prices. Magazines such as Schweizer Illustrierte and Weltwoche, like the related Sunday titles, are gaining market share. Facts, too, would belong in this category if it were not so poorly published. Newspaper monuments such as NZZ or Tages-Anzeiger, on the other hand, are crumbling.
The reason for this is that the current industry crisis has economic and structural causes. Newspapers are affected by both factors, magazines are only suffering from stagnation. As soon as the advertising economy recovers this winter, magazine sales and returns will increase noticeably. It will be like before. This will not happen to the same extent for newspapers, as the structural problems will remain. It will never be the same again.
Nationwide campaigns are still often bypassed by the daily newspapers. And a good proportion of classified ads no longer return from the Internet. The fact that newspaper publishers around the world have missed out on this substitution is having a fatal effect.
In the golden age, newspaper publishers reported returns on sales of up to 30 percent. Today, even top performers such as the Washington Post or the British Johnson Group (Yorkshire Post) achieve a maximum of 15 percent. Magazine publishers, on the other hand, rarely achieved returns of more than 15 percent, even in the golden age. However, they have remained more stable and are now believed to have higher growth potential.
The stock market anticipates the future: the nineties were the decade of the daily newspaper. The decade of magazines lies ahead of us.
> Kurt W. Zimmermann is the owner of the consulting firm Consist Consulting and was previously responsible for the magazine business at Tamedia, among other things.
In Switzerland, the situation is identical - even without stock market prices. Magazines such as Schweizer Illustrierte and Weltwoche, like the related Sunday titles, are gaining market share. Facts, too, would belong in this category if it were not so poorly published. Newspaper monuments such as NZZ or Tages-Anzeiger, on the other hand, are crumbling.
The reason for this is that the current industry crisis has economic and structural causes. Newspapers are affected by both factors, magazines are only suffering from stagnation. As soon as the advertising economy recovers this winter, magazine sales and returns will increase noticeably. It will be like before. This will not happen to the same extent for newspapers, as the structural problems will remain. It will never be the same again.
Nationwide campaigns are still often bypassed by the daily newspapers. And a good proportion of classified ads no longer return from the Internet. The fact that newspaper publishers around the world have missed out on this substitution is having a fatal effect.
In the golden age, newspaper publishers reported returns on sales of up to 30 percent. Today, even top performers such as the Washington Post or the British Johnson Group (Yorkshire Post) achieve a maximum of 15 percent. Magazine publishers, on the other hand, rarely achieved returns of more than 15 percent, even in the golden age. However, they have remained more stable and are now believed to have higher growth potential.
The stock market anticipates the future: the nineties were the decade of the daily newspaper. The decade of magazines lies ahead of us.
> Kurt W. Zimmermann is the owner of the consulting firm Consist Consulting and was previously responsible for the magazine business at Tamedia, among other things.
