Cover Story: Building A Sustainable Future
When Advertising Age announced the first crop of winners of its Media Vanguard Awards, created to honor publisher innovation in the digital realm, some were expected (Esquire and The Wall Street Journal's iPad apps, for instance) while others seemed to come out of left field. One of these was a nifty app from MacLife magazine, which walked away with the "Most Promising Magazine iPad Edition" prize.
"Given its obvious Apple affinity, MacLife magazine must have been tempted to rush an iPad edition together in time for the new device's introduction last spring," Ad Age noted. "Instead it took the time to ask readers what they wanted, while watching many other magazine apps go long on aesthetics, but short on interactivity."
This could be a summation of the entire business approach of MacLife's publisher, Future Publishing LLC, which John Marcom, president of Future U.S., says is grounded in carefully crafted strategy and steady, continuous improvement, rather than the lure of the splashy, "transformative" moment.
"I think over the last few years, the company has been focused on trying to make its assets perform better," he says. "We've been trying to develop organically good digital products that flow from our print expertise."
The approach has left Future poised to make a much bigger impression in a U.S. market where, by its own admission, it has not enjoyed a high profile. "Let's face it, Future's been under the radar a little bit," says Kate Byrne, vice president of the Technology and Living Group, who has overseen Future U.S.'s recent digital initiatives. The MacLife app, Byrne says, is just the first in a volley of digital products displaying the publisher's emerging expertise in leveraging reader passion to the right technological tools.
Byrne also mentions a few other secret weapons: a passionate, dedicated audience base (with renewal numbers and sell-through rates any publisher would covet), a nimble approach, and the "guts" to go up against much bigger competitors.
"I'm competing with IDG [and] MacWorld," she says. "I have a great respect for them as an organization; they have very deep pockets. I am kind of like the David going up against a very smart Goliath, and so I kind of made this app my stone, and the iPad was my slingshot."
Based in London, Future produces more than 180 magazines, websites and events worldwide in four areas: games (computer and console gaming), active (sports, hobbies, automotive), technology (consumer electronics, computing and creative), and music and movies. It bills itself as a special interest media group, straddling enthusiast and consumer audiences with titles like MacLife, Guitar World, Classic Rock and Simply Knitting. Close to 1,200 people work in offices in London, Bath, San Francisco, New York and Sydney, and while its profile has always been higher in the U.K., Future ranks 13th in U.S. newsstand sales.
Dig a bit into the company's operations, and surprising sources of strength appear. Many in the U.S. probably are unaware, for instance, that Future has the world's No. 1 cycling business in terms of audience size, with major brands including Cycling Plus and Procycling (the company's online BikeRadar network alone attracts over 3 million unique visitors a month)—or that American audiences are an important component of this global market, monetized by a U.S.-based sales team that reports directly to the U.K. Or that Guitar World has the largest audience of any guitar magazine in the U.S. Or that the company's custom publishing division in this country is involved in major partnerships with big-brand entities like Best Buy.
The Post-Recession Rebound
After a 2009 that Future CEO Stevie Spring called "a truly 'annus horribilis,'" the company's U.S. business rebounded in 2010. According to the company's annual report, an operating loss of 3.3 million pounds (more than $4.5 million U.S.) was wiped away as the company returned to profitability in the U.S. (In Britain, the company had a profitable 2009 and 2010.) The turnaround was achieved through a "root and branch review of every product and operational division in the company," Spring said in the report.
Lying behind the improved numbers were cost management, including some "painful" staff cuts, a rise in newsstand sales and an improved advertising climate, which Marcom says is critical in the U.S. compared to the British magazine market. In Britain, he says, newsstand sales have always made up a larger percentage of revenues, and people expect to pay more for subscriptions.
The ability to boost U.S. subscription rates is "pretty limited these days," Marcom says, though he notes Future's traditional bundling of electronic media (CDs, instructional DVDs, etc.) for enhanced editions of enthusiast magazines such as Guitar World give it more flexibility than some.
Marcom says Future also has taken significant steps to tighten up its wholesale distribution channels, becoming much more efficient in matching magazine newsstand placement to actual demand. "We've spent a lot of time looking at how some of our titles do better in certain retail channels. [For instance], tech magazines sell better in airports, where the business travelers are. A lot of [traditional] distributing mapping did not take that into account," he says.
The company also has cut its number of special issues, which Marcom admits, "we were probably overdoing a bit" in 2008 and 2009. Much of the improvements, he says, are simply about "putting the right amount of products out in the market."
Like all publishers targeting gamers, Marcom says Future is feeling the pressure of changes in that market. "That's become much more of a mega-hit, sequel-driven business … so the [games companies] have gone much more mass in their marketing," utilizing billboards and TV spots rather than print ads for big releases such as last fall's "Call of Duty: Black Ops."
"On the other hand," he says, "there's a lot of digital opportunities."
Cooking Up an App
When it came time to produce an app, Future decided the best way to take advantage of the opportunity was to go to its readers before breaking out the publishing tools. Byrne's team asked MacLife readers what they wanted to see and which of the editor's suggestions mattered most to them. "We … invited them into the kitchen to help us bake the cake," she says.
Byrne believes many of the early iPad adapters made the mistake of over-designing, going for lots of whiz-bang features that did not focus in on the specific desires of a title's readership. "Publishers did souped-up versions of digital magazines," she says, "[with] slow-loading files that provided some additional service, but not a whole lot. And certainly one of the cool things is you can now share this stuff [through social media]."
The first app released for any Future product, the MacLife app—developed over seven weeks and launched in August 2010—was the first anywhere to feature a live social media feed, offering real-time user reviews of products and other live features.
To build interest, the initial release was free, as was a second version, released in December, which built out even more interactive features and opportunities for users to provide feedback on the product.
Future versions of the app will serve up paid subscriptions (through Zinio, if not Apple), Byrne says, and per-issue prices will run less than newsstand prices, while offering content clearly distinct from the print product.
MacLife demonstrates, as well as anything that has come along in the wake of the iPad's launch, the marketing and audience-building potential of a well-built app.
"MacLife is a magazine that very few people probably know. Newsstand sales are relatively modest compared to big magazines," Marcom says. "But suddenly you're in the top 10 news applications on iTunes, and you're in the same list as the BBC and The New York Times, and you're like, 'Wow.' It's a very level [and wide-open] playing field."
Using the Medium
With the MacLife release and subsequent apps, Future has shown itself adept at creating products that are true brand extensions. The Guitar World Lick of the Day app has been singled out by industry observers for using qualities unique to tablets to provide musicians with a handy way to hone their craft.
Says Marcom, "We've been working to encourage our teams to think about how they can take our assets and make them an interesting experience that you can't do anywhere else. I think the Lick of the Day [app] is definitely the best example to date of something that you couldn't do on a computer, you couldn't do in a magazine, and you couldn't do on a video device aside from the tablet. It just works in that environment really well."
Other notable releases since MacLife include apps for the company's U.K. tech magazine, T3, and a brand-new title, Tap!, launched simultaneously on iPad, iPhone, print and the Web.
"Now we are learning from each other," Byrne says of the U.S. and U.K. development teams, "finding out what works and what doesn't, and discovering what the global market is for this because user behaviors are different [in various countries]."
While expanding into apps, the company has not neglected its websites, striving both to have existing websites render well on tablets and to build greater cross-functionality between the Web and mobile devices, especially in the games and technology divisions.
According to Byrne, a key component of the company's successful push into apps has been a rethinking of internal workflows. After evaluating the development process behind the first and second generation of the MacLife app, Byrne decided a new position needed to be created to coordinate editorial and development teams. "What became clear to me is we need a head, a person I call a digital producer … [who] will serve as a go-between between the edit group and web-dev," she says.
The digital producer she hired has a background in both camps. "He will work in conjunction with the editor to help figure out what [a piece of content] is going to look like on a tablet, … a website, … an iPhone, [and] how they all work together in a coherent ecosystem," she says. "He's a whiz at social media, so that will help not only with readers' connection and engagement but, frankly, smart social media marketing."
Lastly, she says, he will work with art directors and editors to ensure they can focus on their core competencies rather than being tasked with too many digital asset management duties—in her words, to keep the "poets" distinct from the "quants."
"I want [editorial] to know how to do [digital asset management], but I really want them to come up with awesome content," she says. "I'll figure out how to execute it and shove it through the pipes. That's really where I see this [digital producer] role as being key."
A Different Approach to Custom Publishing
This commitment to integrating staff resources and know-how without watering down assets also is seen in one of Future U.S.'s most successful ventures, custom publishing. "Typically in U.S. publishing companies, there is this other department somewhere over there that takes the stuff that's already been done, and pretties it up and tries to resell to someone," Marcom says. "… [Future uses] models that are much more like traditional consumer publishing. We create the products from scratch, with the participation and financial support of a commercial partner, but the result is a product that really looks much more like a consumer product that over time will generate subscription and advertising revenue for us, and for the partners to defray the whole investment on their part. So it's not just an advertising expense [for them], it's more like a marketing expense that pays dividends in all sorts of ways."
Marcom cites the crafts area, where Future enjoys a strong market share overseas. Working with sewing materials producer Coats and Clark, Future produces two custom magazines in the U.S.—Crochet Today and Knitting Today—with a healthy consumer following. The publications are overseen by a former editor of some of the company's sewing enthusiast titles, and the partnership with Coats and Clark extends into multiplatform products.
"In two or three years, I'm not sure whether we're going to know whether it's a custom publishing business or a consumer publishing business, except that it got started with partnerships sort of different than you normally would, doing a major partnership with one marketer helping to underwrite it," Marcom says.
Looking ahead, he sees great opportunity for all of Future's products in the "level playing field" made possible by digital content and devices. If MacLife's recent top showing in Apple's app store is any indication, Future Publishing may not be flying under the radar too much longer.
"We are just trying to focus on what we do well and try to keep doing it better and better, because we can see that this is probably the most sustainable—even if not the most sexy or glamorous—way to do it."
And for Future, that's working just fine. PE