Big magazine deals and what they mean
Scale drives deals
Advances in data collection have allowed publishers to get a lot better at finding untapped audience segments and targeting key demographics with individualised marketing efforts, but granularity doesn’t mean the advantages of pure volume have gone away. Meredith created what it’s calling “a category killer” among women’s health and fitness titles when it bought Shape from American Media Inc. for a reported US$60m plus profit-sharing considerations in January. The company is merging Shape with its own similarly positioned title, Fitness, to create one magazine with a rate base of 2.5 million (60 per cent higher than Shape’s 1.6-million rate base prior to the deal). With the purchase, Meredith is hoping Shape’s new audience will have enough scale to provide significant differentiation from main competitors Health, Women’s Health and Self, attracting non-endemic advertisers. In dollars and cents, that means it’s looking at $50m in revenue next year.
Through partnerships, strategic deals or organic launches, publishers have increasingly looked overseas for growth. Politico has been the most aggressive (with more than a little help from German publisher, Axel Springer), acquiring European Voice in December as part of a reported eight-figure investment. The company’s Euro model will follow its American one closely—a smattering of free content, along with a few high-priced vertical subscription offers. Print will play a role, as well. Time Inc. also got involved in Europe, raising $1.4bn in debt to fund the purchase of its British counterpart, IPC Media, as the company prepared to spin-off from parent, Time Warner.
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Meredith to acquire Shape brand from American Media