German magazine publishers grapple for title share

"It's pretty brave to launch a business weekly in Poland." - Florian Fels, Axel Springer Polska H.Bauer, which ignored pessimistic forecasts of a further slowdown on the advertising market and bought three Polish titles two weeks ago, now plans to launch a business weekly. The Hamburg-based publisher of consumer magazines, in Poland since 1992, plans to debut its business magazine sometime during the first half of the year, said Witold Woźniak, chief executive officer of H.Bauer's Polish operations. "We haven't made presentations to potential advertisers but we did prepare the trial issue (for the business weekly)," Woźniak said. "I won't specify the exact launch date because we have to be really convinced the title is ready. But it will definitely be the first half of this year." The magazine will be aimed at upper level managers, similar to the readership of Businessman Magazine, according to Woźniak. "It will be a rather narrow group of readers so we will be satisfied if we sell 50,000 copies," he said. "It won't be like Geld Idee (H.Bauer's German business weekly). There aren't enough people in Poland who actively invest money, so our product here can't be as practical as in Germany." Going upmarket Before buying up Twój Styl, Votre Beauté and Filipinka, H.Bauer this month acquired Silver Shark, a Polish publishing magazine, from U.K.-based The Future Network for $2 million. In addition, The Future Network agreed to an exclusive 10-year licensing agreement with H.Bauer that allows the German publisher to borrow content from Future's titles CD Action, Action Plus, and PC Format, for use in Poland. H.Bauer publishes 24 magazines in Poland and is particularly strong in the TV guide segment. Last year, its Tele Tydzień TV guide had an average circulation of 1.47 million copies, according to Association of Press Distributors (ZKDP) estimates. Twój Styl, however, will be H.Bauer's first high-profile magazine. "At the moment, it's our priority to focus on maintaining the market position of the acquired titles, so we might not be that active (launching and acquiring) in the near future," Woźniak said. Until now, H.Bauer's Polish operations had been overshadowed by two other German publishers, Gruner und Jahr Polska (G+J Polska) and Axel Springer Polska (ASP). Last year, H.Bauer was preparing to launch a new political weekly but in September ASP debuted Newsweek Polska, prompting the German publisher to abandon the project. Meanwhile, H.Bauer was earning more from its TV guide titles than its competitors were on their products. According to estimates by Expert Monitor and ZKDP circulation figures, last year H.Bauer logged more than zł. 488 million ($122 million) in revenue compared to zł. 312 million ($78 million) by ASP and zł. 270 million ($67.5 million) by G+J Polska. Perceived as a publisher of less prestigious magazines, H.Bauer hopes the purchase of Twój Styl and the launch of a business weekly may help it improve its image. As a result, its competitors are paying close attention. "It's pretty brave to launch a business weekly in Poland," said Florian Fels, managing director of ASP. "We also thought Profit (ASP's business monthly) would become a weekly, but the advertising market is not strong enough, so it seems to be better to start as a monthly. But if necessary, we can turn Profit into a weekly. We have the people to do that." At the same time, Fels said he was satisfied with Profit's performance since its launch last spring. "We're selling Newsweek and Profit in a package," he said. "It's a similar target group. In 2001, Profit's average was 20 paid ad pages and 60,000-90,000 copies sold. This is one of the biggest successes of ASP because at newsstands we even sell more than many business weeklies and monthlies in Germany." Enter the competition G+J Polska, whose biggest revenue-generating title is Claudia, a women's magazine that sold monthly about 800,000 copies last year, also had plans to launch a business magazine, called Capital. But the successful rollout of Profit thwarted the German publisher's plans. "We still see certain interesting areas (in the market), but I personally don't see any room for Capital," said Oliver Voigt, CEO of G+J Polska. "My opinion hasn't changed. Right now we have Profit as a compass and we can check month by month how much ad pages they have and how many copies they're selling. If I were them, I wouldn't be satisfied, which is why I'm happy we didn't launch Capital." While Voigt, Woźniak and Fels denied rumors that they've never met for a beer and that they are competing even more fiercely than they would in Germany, the Twój Styl deal proved how tough the competition is. "Bauer has been doing a lot over the last month," Fels said. "I think they're working on their image. Sometimes I think they are trying to be in every sector of the market where we are." He added, however, that ASP had also considered buying the three titles acquired by H.Bauer. "H.Bauer, with one owner (the company is owned by Heinz Bauer and family), was flexible and willing to take the risk," Fels said. "Even though Twój Styl no longer has the quality it once had, I regret that we didn't buy it, it's one of the best titles. But to invest millions of dollars within two days without checking the risks of the transaction is not (smart) for a company like Axel Springer." While the three publishers were unwilling to reveal details of their plans for this year, market insiders said that all of them are working on new projects. "We'll continue to launch new titles, maybe not such a big one like Newsweek in the next months," Fels said. "We're still missing TV magazines and we don't have anything in the high-end women's market and nothing in the men's lifestyle market, though that one is very crowded." Voigt said he would rather concentrate on maintaining G+J's position rather than investing in new projects. "We should not be ego driven, which is how I see this business," he said. "What we did here while others were making so much new stuff was re-launching Claudia. We tripled the ad sales of Naj and more than doubled its circulation. We started our Internet activities in early December while everybody else stopped; now we're working on reshaping Focus. This is my definition of what we should be doing here."