European Magazines Are Struggling in the U.S. Market

The boom goes bust

Once upon a time, the hottest kind of publisher to be in the U.S. was a European one. Companies like Bonnier, Dennis, Emap, Bauer and Hachette Filipacchi established footholds in the States with buzzy titles, made big acquisitions and touted cross-Atlantic success of the Euro business model (heavy on newsstand sales, light on subscriptions). But recent years have seen once-hot titles shuttered, assets sold and expectations lowered.

Certainly, the economy has made it tough for everyone. “Both U.S.-owned and international publishers are saying that if they’re not seeing properties rebound after four or five years of downturn, then they’re shutting down or scaling back,” said media banker Reed Phillips.

But some of these foreign publishers’ woes may be of their own making. Take Bonnier, which has only 10 of the 18 titles it bought from Time Inc. in 2007. Bonnier CEO Dave Freygang said the company shed the rest, including Parenting and Skiing, because they couldn’t achieve the No. 1 or 2 spot in their markets.

Martin Walker, a longtime Bonnier consultant, said most European publishers don’t understand the U.S. market, whether it’s consumers’ preference for low newsstand prices, the need for ad sales offices in multiple cities or the difficulty in getting nonendemic ads for low-circ titles. Consider Science Illustrated, a defunct Bonnier title. Despite its success in Europe, it couldn’t get enough nonendemic ads to make up for its small circ.

Germany’s Bauer had success with its checkout-friendly InTouch and Life & Style in the early 2000s. But as the celebrity weekly category shrank, Bauer had to cut their rate bases and rely more on subscriptions and ads.

Sales president Ian Scott pointed out that Bauer still has a big market share in the (admittedly shrinking) celebrity category and that the company has stuck with its newsstand-heavy model, which is attractive to advertisers.

It’s not all bad. The Economist and Financial Times have thrived by having distinct products people will pay a premium for. The Daily Mail and The Guardian are betting on digital expansion rather than braving the precarious print market.

Meanwhile, Bonnier has narrowed its focus to men’s titles and a few others that are competitive enough to get nonendemic ads.

And Phillips believes that Maxim, the survivor of Dennis’ onetime laddie empire which is now owned by Alpha Media, could survive if it is rethought for the digital age.

As for Bauer’s celebrity titles, the future will likely depend on the fate of the category.

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