Magazine publisher Future has been on an acquisitions drive over the past five years that’s earned it the label of industry “giant”, although it’s not a term that chief executive Zillah Byng-Thorne would use.
“I don’t think of us as a giant at all,” she tells Press Gazette.
But the evidence is stacked against her.
Future now owns more than 160 titles, among them some of the biggest brands within the tech, gaming, women’s lifestyle and sports verticals.
They include: Marie Claire, T3, Tech Radar, PC Gamer, Total Film, What’s On TV, Classic Rock, Cycling Weekly and Four Four Two. It also owns space.com and even recently bought insurance comparison website Go Compare.
Future’s half-year results were impressive, doubly so because they came during the still Covid-19 impacted six months to March 2021. It doubled its pre-tax profits to £56.9m on turnover of £272.6m, up 89%.
And it has its eyes on the US market.
Where others have been reducing their output, Future is expanding. Last year it acquired TI Media (formerly Time Inc UK) in a £140m deal. Its latest buyout is Dennis, publisher of The Week magazines, for £300m.
[Read more: Future buys The Week publisher Dennis for £300m]
The Dennis name will disappear, according to Byng-Thorne, who says there are no plans to close titles – “we’re very excited about everything that we’ve acquired and want to continue to grow those brands” – but some redundancies will follow the merger.
They’ll fall within the £5m of “cost synergies”, corporate-speak for cutting down on doubling up, which will mainly come from the closure of duplicate Dennis offices in locations like London, New York and Washington.
“Inevitably there will be some overlap in some roles and so I expect there will be some staff cost savings, but that is the minority of this number and certainly not why we bought the business,” says Byng-Thorne.
“Traditionally when we’ve acquired businesses we end up investing in editorial and investing in the content side and it’s more likely that some of the back-office functions are where we might see some reductions.”
The chief executive says the company has its “hands full” and is “pretty content with what we’ve got” after its pandemic takeovers and is unlikely to be making any further large mergers and acquisitions in the near term.
But she says this hiatus is only temporary.
“Certainly over the next 12-18 months I would be surprised if you didn’t see more M&A as we continue to execute on our strategy,” she says. That strategy? “To grow the business organically, but then where we can accelerate that growth through targeted M&A to do so.”
She adds: “Where we see opportunities to accelerate market leadership positions, or bring in more capability through acquisition we will do those. It’s not a ‘need to’, it’s an option, and therefore if we don’t find something which meets those requirements, then we wouldn’t do something.”
The below table shows that Future’s latest aquisition puts it into 2nd place in terms of the UK’s biggest magazine publishers by circulation (although Future has not acquired all of the Dennis titles).
But where is it all leading? What is the ultimate goal for Future according to its chief executive?
“Honestly I try not to have an endgame, because I think media evolves and so businesses should evolve as well,” Byng-Thorne says. “Our focus is: in the markets in which we operate, we want to have market leadership."
Byng-Thorne says a number often talked about internally at Future is that it currently reaches about one in three people online in the US and North America. She says that over the next three years, “if we can grow our share of the eyeballs” to one in two “that would be a good objective”.
Future talks of having a “US-first mindset”, which comes down to the size of opportunity North America can offer versus the UK. North America is Future’s “biggest market”, says Byng-thorne.
“When you write content and you access readership in the US it's four times than the size of the UK, so your opportunity to drive profitable revenues from that is materially larger…”
This international outlook is at the heart of Future’s operations.
“Our approach at Future is to operate as a global English speaking business, so we don't have a US division and a UK division, what we do is we have our brands operate within specialist verticals, so for example the gaming portfolio.
“We write and create our content as a global team so we're agnostic about where that content is created, whether that's the UK, the US or Australia. Clearly in every market you have to have local salespeople etc.”
She adds: “Having a more global mindset and thinking 'North America first' is more about not being parochial and thinking about the UK domestic market only, recognising that the things that we write and the content we create is valuable to a global readership, not just a UK readership.”
'We believe in the value of print'
Future’s income is divided roughly into equal thirds: advertising and e-commerce affiliate income, subscriptions and newsstand sales.
While ideally, it wants to see growth across all three of these, Byng-Thorne recognises that print sales are in decline and Future is “not going to buck that historical trend”.
But she says the company has recorded “strong double-digit growth” in digital advertising and e-commerce affiliate revenues, so these have become “slightly more prominent” as sources of income.
Within its brand portfolio, about 140 are print magazine titles. “We're very bullish on print as a sector and have been a long supporter of it,” says Byng-Thorne who doesn't "foresee a change in strategy" on this.
“One of the reasons why we continue to buy print businesses is because we believe in the value of print. However, clearly if something becomes ultimately unprofitable and the consumer no longer is prepared to pay for it, then we won't continue to produce it.”
She adds that as a result of Future’s size it can deliver savings, such as on buying paper, through an economy of scale. This makes magazine printing cheaper and ultimately “prolongs their life”, she says.
Over the past seven years, print has made up a fluctuating 20-35% of Future’s total revenues. “I don't think that's fundamentally going to change,” says Byng-Thorne.
She is admiring of the success of The Week US, a print edition launched in 2001, which was followed by The Week US Junior last year.
"One of the things that the Dennis team have been very successful around is launching new print products into the US," says Byng-Thorne.
“We'd not say no to that, but our strategy is more to make sure that we get our content available to as many people as possible and therefore our job, we think, is to democratise that and make that available to consumers and audiences in whatever way they want to access it.”
Future CEO on secret to success: 'We don't rely on any one revenue stream'
But surely there’s more room for growth in digital than there is in print?
“The Dennis business has been growing double-digit revenues, and that's an 80% print business. So never say never, [but] the long-term fundamentals in the print sector we all know are in decline and that is the reality, but good quality specialist content can grow in a print environment and there are examples of that.
“Without doubt our digital business and our online business has grown consistently year over year, double-digit, and has performed exceptionally well in that regard…”
Given Future's impressive financial results and its appetite for big buyouts, I ask Byng-Thorne what she thinks is the secret to this success.
“We don't rely on any one revenue stream,” she says. “We operate across a number of verticals so the business is very diversified, global in its mindset [and] has its revenues across three material different revenue streams within media.”
She said it was this diversity that helped the group weather the pandemic and out-perform industry rivals.
“When the shops were closed and travel stopped, the magazines part of our business found it hard to be distributed and… we couldn't run any physical events, so we had some headwinds in that regard. But on the converse, there was a lot more people using the internet and buying more, so the e-commerce affiliate part of our business performed exceptionally well.
“So the diversified nature of the business is such that even when one segment might struggle, other parts can be beneficiary. We think that was what made us perform strongly during the period.”
'In today's society there's a genuine value in original content, expertly produced'
Byng-Thorne trained as an accountant and started in retail before entering the world of publishing. I ask what drives her as chief executive. She answers on behalf of the company.
“I think the key thing that drives us is just trying to make a better business and ensure that we leave a legacy in media and ensure that our business continues to deliver for our audiences as the media landscape changes.”
She adds: “I'm a passionate supporter of expert content and I think that in today's society there's a genuine value in original content, expertly produced, and I think we have a real moral responsibility, as well as a business responsibility, to make sure we produce the [best] content we can.”
Staff will return to a flexible working model at Future from 1 September that will allow them to work two days from home within the week if they want to. There are no plans to close Future’s own offices.
“We really believe in the power of collaboration, and I also think it's really important that in order to support the development of individuals, they can see and observe their colleagues working in a working environment and so what we're looking to do is to is the best of both,” says Byng-Thorne.
Doubtless there are many within the media industry who might learn a thing or two from observing Byng-Thorne in her working environment as she leads Future to magazine giant status.
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