There is perhaps no medium to experience such transformative change during 2019 and 2020 in Australia as the magazine industry. Ownership changes, accelerated decline in advertising revenue due to COVID-19, and the reduction in supply due to the subsequent closure of titles has reshaped the industry, with many industry spectators predicting that the once glossy, highly profitable industry will never look the same again. Total consumer magazine revenue is predicted to decrease from A$663m in 2019 to A$381m in 2024 at a -10.50 percent CAGR based on a mid-point forecast scenario. This decline will be driven by continued decline in both advertising and consumer revenue.
In October 2019, Seven West Media entered into an agreement with Bauer Media to sell off its Pacific Magazines publishing arm,35 which would bring together a large number of the country’s most popular magazine titles under the one umbrella in an effort to consolidate and futureproof its growth in an increasingly competitive market. It is reported that the merger gave Bauer control of between 85 and 90 percent of the magazines market in Australia.36 The ACCC raised concerns regarding the proposed acquisition, but cleared the acquisition in March 2020. The sale of Pacific Magazines to Bauer was completed in May 202037 for a final price of A$40m in cash consideration and A$6.6m in advertising revenue in Bauer titles over a three year period, at which point the unforeseeable impact of the global pandemic had started to set in.
These changes occurred against the backdrop of relative stability from the other major magazine publisher, News Corp Australia, which publishes a range of specialist titles and content websites such as taste.com.au, which boasts the country’s largest digital audience of 4.2 million.
COVID-19 accelerated the trend of decline in the magazine sector with pressure on advertising budgets, and inactivity from industries with affected supply as a result of the pandemic (such as Travel). To counter the effects of declining revenue, Bauer has closed a number of its consumer magazine titles including Harper’s Bazaar, Elle, InStyle, Men’s Health, Women’s Health, Good Health, NW and OK!, unfortunately resulting in the loss of staff from across the organisation.38
In September 2020, Mercury Capital announced39 a rebrand of Bauer to Are Media. Whilst the strategy for the business remains to be seen, the closures of titles indicates a more focused approach on key, high performing titles, with strong brands enabling the ability to monetise the product beyond print. This monetisation may be realised through product extensions and brand collaborations, extending the revenue opportunities into other media formats (for example TV and digital), and other product categories such as retail.
Further, the magazine industry may look to evolve through increased digitisation of existing properties, including a renewed focus on direct to consumer and subscription models, in line with movement in the broader entertainment and media industry.
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