Gruner+Jahr eyeing right time for launch of Capital
By : Anna Kocinska
German publisher Gruner+Jahr (G+J) said last week that it planned to launch Capital, its new business monthly, either before the end of the year or next spring.
"We are still considering launching it by the end of this year, but due to (the number of magazines that have folded this year), advertisers are very skeptical about new publications," Oliver Voigt, president of G+J Polska, told the Business Journal. "We are waiting for a good sign, and we'll get it if we are sure we can sell 30 advertising pages per issue."
Capital is published in Germany and France. Last year it was also launched in Spain with a print run of 350,000 copies. The Polish edition will have a print run of 130,000 to 150,000 copies, Voigt said. "I'm looking at the sales results of my competitors, so our projects have to be planned in a very conservative way. I expect to have 70,000 to 80,000 sales," Voigt said. "Then, month by month we can widen our reader base. Obviously, Capital with 40,000 (sales) doesn't make sense."
But what Voigt may consider a failure, Wieslaw Podkanski, president of Axel Springer, the German publisher of Profit, deems a success. "(Profit) became a leader on the market in accordance with our business plan," he said. "Its retail sales reached more than 40,000 (since its April launch)."
Press distribution watchdog Zwiazek Kontroli Dystrybucji Prasy (ZKDP), however, was unable to confirm Profit's sales figures. "The amount of (Profit's) sales is unavailable," said Justyna Budzinska of ZKDP. Other media figures say that Profit's ad revenue is in a downward trend. While according to official price lists the magazine sold zl. 394,200 worth of advertising in May, by August that figure dropped to zl. 301,450, Agora Monitoring, Agora's market-research division estimated. However, it's worth noting that August is traditionally a bad month for ad revenue. In May, another Polish business monthly, Businessman, recorded zl. 1.47 million ($416 million) in ad sales and Home&Market garnered more than zl. 600,000 according to official price lists.
Given the flat economy, most publishers agree that now is not the right time to launch new publications. "We made a very good (women's) magazine (Madame Figaro), but the market shows that people are not willing to buy more than one magazine," said Sebastian Fischer-Jung, president of Hearst-Marquard Publishing (HMP), publisher of Cosmopolitan and Shape. "The market is getting tougher and tighter. Publishers that don't have No. 1 magazines might have problems." HMP has recently decided to suspend publishing of Madame Figaro. "Its sales, especially of its third issue, were far below our expectations," Fischer-Jung said. "It was about 40,000 (sales) with a print run of more than 100,000, and we expected 30-35% returns. So, we decided we can't publish it anymore, and we suspended it."
While the launch of multiple publications is good news to advertisers, companies appear to be cautious about where they spend their money these days. "We pay a lot of attention to the development of the (business press) segment of the media market," said Izabela Senik, from the press office of Polska Telefonia Cyfrowa, operator of ERA mobile network. "But we are careful because many new titles disappear too quickly after they were launched. However, we always have funds in our budget for particularly interesting projects." According to Voigt, G+J may spend up to zl. 10 million ($2.38 million) to promote its new title and boost the interest level of both readers and advertisers. "These days you must invest because Poland is a very mature market," he said.
Meanwhile, competition among publishers is fierce and not always fair. According to industry sources, the format of Profit is based on the same concept as Capital's original version. Planning for the launch of Capital began last year when Dorota Goliszewska was named editor in chief. At the time, G+J Polska's president was Andreas Tilk, but he soon left the company to work for Profit. "Everybody can see that our colleagues from Axel Springer were inspired," Voigt said. "And it's more than getting inspired by a competitor's layout." Last April, Goliszewska left G+J, apparently because she couldn't agree to the new president's revised concept for Capital, which was to make the product look more like the German edition the original plan was to model it after the French edition, a source told the Business Journal.
"(The German and French editions) look very different," Voigt said. "The German edition is much calmer with a clearer layout, whereas French Capital is more colorful and modern. As for the content, the German edition provides more direct customer advice and is more profound, while the French magazine has more general interest commentaries." But according to the source, the French edition has been the more successful of the two. It sells 430,000 copies to Germany's 220,000, despite the German market being much larger. "With a publication similar to French Capital's, we could sell even up to 70,000 copies while the German edition, much more specialized and editorialized, would (sell) 10,000-15,000," the source said. Capital's new editor in chief, Jan Jankowski is working with a 15-people team, which may increase to 20 persons.
As the two German publishing giants maneuver for control of the market, Polish business publishers are remaining calm.
"I am not afraid that once the Germans enter this segment of the market there will not be enough ads to feed all of us," said Piotr Bachurski, owner of Bachurski Media Corp., publisher of Home&Market and Gazeta Finansowa, whose main advertisers include financial institutions. "Right now, financial institutions spend little money on ads but that might change. Take insurers, they have so far been using 25% of their capacity, and if they take over the entire market, think of the money to be spent on ads?"
Home&Market, which has been around for nine years, sells about 30,000 copies monthly. "That's quite a lot considering the size of the Polish market," Bachurski said. "We are dealing with a serious economy at H&M, while, for instance, Profit is a fast-food economic publication. And a business paper is like a bank you don't change. It's read by the father, and it's read by his sons."
