Magazine equity given away

by Nicola Clark, Marketing 24-Jul-07, 08:30

LONDON - Advertisers may fear a lack of reader engagement with Mike Soutar's men's mag because it is free.

News that Mike Soutar - the man behind the testosterone-fuelled lads' mag peak of the 90s - is to launch a free weekly title, has thrown a spotlight on the free-magazine business model.

With Sport approaching its first birthday and Emap considering the possibilities offered by free titles, advocates of the format say it could be the saviour of print. However, a question remains over the extent to which advertisers believe in free content and how much they are willing to invest in a new title. As anyone who has ever had thelondonpaper thrust at them while negotiating commuter chaos will testify, it is about as far from an active purchase as you can get, and potentially degrades the appeal to advertisers.

Soutar, who is heading up the launch under the project name 'Alpha One', is bullish, believing that the free market is responding to a clear demand from consumers under the age of 45, who do not expect to pay for their media. 'There is a generation gap and you can view the emergence of free media as a response to the web - consumers expect good-quality editorial for nothing,' he says.

There is no doubt that Soutar is respected in the industry and agencies rate the launch team, which includes former Nuts editor Phil Hilton. The title has also secured distribution deals with coffee shops, retailers and gyms, as well as using paper pushers. However, as one competitor puts it: 'I don't doubt that Soutar can create a great editorial product, but the business model is flawed and a free title will not be able to deliver the yield necessary to sustain it.'

It is certainly a gamble, and it comes as little surprise that there is a start-up behind the project rather than an established publisher that is answerable to shareholders. Eric Fuller, managing director at IPC Ignite!, warns that running a magazine with one revenue stream is incredibly risky. 'The web has meant that more content is free, but I don't think this necessarily transfers to other media; I don't see Sky dropping its subscription charges,' he says. He adds that there are no plans for a free IPC men's title and insiders believe Emap is adopting a wait-and-see approach.

However, Jo Blake, head of press at BLM, believes that more free content is on its way - primarily from smaller magazine publishers and existing newspaper brands. 'I can't see the likes of Emap moving into this market because they will be concerned with eroding their existing titles, but Sport has broken down the barriers,' she says.

The growth of free titles has already been seen in the newspaper market, where Metro has had substantial success in selling a captive audience of upmarket commuters to advertisers. However, Alan Brydon, head of press at MPG, believes the potential of the free market has been overplayed. 'Metro is unique and is the only concept that is working - there is no financial logic to thelondonpaper or London Lite,' he says.

The recent high-profile ad campaigns highlighting the dumping of thelondonpaper and the subsequent retaliation from News International has further undermined trust in the medium. This sentiment is echoed by Marcus Rich, group managing director of Emap's lifestyle and entertainment magazines, who says actively-purchased magazines create a 'deeper connection with readers than one left on the floor of a Tube train'.

Paul Thomas, investment director at MindShare, says that while there is a difference between free and paid-for titles in value terms, the real issue is the quality of the product. He warns that it will be difficult for more fashion-oriented and upmarket brands, as free magazines simply do not offer the upscale envi-ronment of Vogue. With 'Alpha One' aiming for ABC1 men and the affluent advertisers that come with them, this could present a problem.

Despite these problems, Sport - also aimed at ABC1 men - has pulled in fashion ads. Nadia Nardonnet, its managing director, says the planned launch of 'Alpha One' is proof of Sport's success and validates the free model. 'There is a learning curve when you launch a product, but today's brands are more aware that the free model can deliver.'

Just how much it can deliver remains unclear and Sport's rates remain far lower than its paid-for equivalents. 'You can consider the numbers in isolation, but the fact is, consumers are less committed to a product they haven't bought,' says MPG's Brydon.

Soutar is remaining tight-lipped on the details of the launch later this year, but his team is visiting agencies in coming weeks. Competitors have suggested that the title will not be able to rely on risky content, because of the fact that it is given away. 'Even a magazine such as GQ, which positions itself as a highbrow read, has a lot of girls in bikinis in it - and just how much of this you can get away with in a free title is a genuine question,' says one publishing director.

Ultimately, as the value of traditional print media is consistently questioned and undermined, and innovation is increasingly focused on digital, the launch can be only a good thing for the market. Free of the restrictive profit margin demands of a major publisher, Soutar's title will certainly deliver excitement; ad revenues are not so assured.