Consumer magazines

The importance of diversification, convergence, and cross-platform brands is growing. To survive, publishers need to cooperate with competitors in many different ways, but the question is whether all of them will survive this strategy.

Playing field

With all the screens currently available to us, paper magazines are no longer the go-to source of reading material. The fact that the Dutch still prefer paper magazines to online media can be explained by various demographic characteristics, for example the Netherlands’ ageing population. However, the Dutch have read less in recent decades and have begun to consume media differently, with a widespread switch to audio-visual media. We must therefore bear in mind that both digitalisation and demographic characteristics are focus areas for publishers.

These changes have forced publishers to focus on diversification and convergence, i.e. to position themselves in more and different points along the value chain and to seek relevant scale. In the changing market, publishers need to interact with consumers, use new digital channels, and cooperate with competitors to create new content forms. They also need to acknowledge the existence of new competitors, such as popular influencers, bloggers and vloggers. Sanoma Media Netherlands, Weekblad Persgroep (WPG), and other Dutch publishers have focused on cost control by divesting smaller magazines and entering mutual alliances. Hearst Netherlands’ recent acquisition of G+J Media is a good example of how publishers are seeking relevant scale opportunities and joining forces. However, it is also noteworthy that publishers such as New Skool Media and Pijper Media recently took over brand names and divested again a year later, showing that increasing scale and lowering back office costs is not always a successful strategy. The VAT increase (from 6% to 9%) announced for 1 January 2019 will only drive this trend towards cost control.

What’s new?

There is a growing focus on diversification and new ways of monetising publishers’ content. Publishers must continue to interact with consumers and competitors to become cross-platform media brands. Brand identity is still one of the main pillars, but efforts to enhance brand names are not limited to investing in big events and festivals. One new approach is the launch of influencer platform “The HUB” by Sanoma Media Netherlands, a form of strategic partnership that works with an extensive pool of creative bloggers, editors, Instagrammers, YouTubers, and other influencers to help advertisers come up with a creative approach to new content and connect them with relevant creators for the best match.

Publishers are also increasingly cooperating with competitors to collect data for data-driven marketing purposes. De Persgroep Nederland, Sanoma Media Netherlands and Telegraaf Media Groep (TMG) are joining forces in NLProfiel, a service that will jointly supply profiles based on “first party” data to advertisers. In this way, they are responding to the growing demand to facilitate data-driven marketing within the Dutch media playing field. Uniform technology and data structuring are necessary to make this possible. The advertising market increasingly wants better digital targeting. NLProfiel offers brands and their agencies the opportunity to plan across the various media parties through relevant profiles. GDPR compliance is essential; consumers need to know that their data is safe.

Consumer magazines publishing market (€ millions)
Netherlands  Historical data Forecast data   CAGR %
  2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 18-22
Print 350 319 295 273 251 231 213 195 179 161 -8.5%
y-o-y growth   -9.0% -7.4% -7.6% -7.8% -7.9% -8.1% -8.3% -8.4% -9.6%  
Digital 62 72 78 83 90 96 103 109 116 123 6.5%
y-o-y growth   16.1% 7.7% 7.6% 7.3% 7.1% 6.9% 6.5% 6.2% 5.8%  
Advertising 412 391 372 356 341 327 315 304 295 284 -3.6%
y-o-y growth   -5.2% -4.6% -4.4% -4.2% -4.0% -3.7% -3.5% -3.2% -3.6%  
Print 302 284 275 268 260 249 237 225 213 201 -5.0%
y-o-y growth   -6.0% -3.1% -2.7% -3.0% -4.2% -4.8% -5.1% -5.3% -5.7%  
Digital 7 9 11 15 18 21 25 29 33 37 15.6%
y-o-y growth   28.6% 27.7% 26.4% 22.3% 19.1% 17.0% 15.7% 14.4% 12.1%  
Circulation 309 293 286 282 277 270 261 253 245 237 -3.1%
y-o-y growth   -5.2% -2.2% -1.5% -1.7% -2.7% -3.1% -3.1% -3.1% -3.3%  
Total 721 683 659 638 618 597 577 557 540 521 -3.4%
y-o-y growth   -5.2% -3.6% -3.2% -3.1% -3.4% -3.5% -3.3% -3.2% -3.4%  

Outlook

We expect digitalisation and demographics to lead to a decline in print revenue circulation in line with prior years. However, digital growth is still too weak to compensate publishers for print declines. We expect digital circulation revenues to grow from €18m in 2017 to €37m in 2022 but this will be too small to offset a decline of €59m in print revenue circulation.

The cooperation within NLProfiel is a good example of how publishers can respond to market trends together and strengthen each other. It provides consumers with a more relevant range of advertisements and offers advertisers and media agencies more valuable propositions. However, we do not believe that this approach will work for all publishers and we expect that the supply of different magazines will shrink every year and that only strong brand names and niche players will survive. We believe in strong multiplatform strategies and strategic partnerships, but only if the publishers involved are able to respond quickly to new opportunities with Dutch demographic changes in mind.

Contact us

Christiaan van Toor

Senior Manager, PwC Netherlands

Tel: +31 (0)88 792 58 70

Elien van der Veer

Senior Associate, PwC Netherlands

Tel: +31 (0) 88 792 28 58

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