A “huge” uplift in subscriptions and “flying” digital traffic means Immediate Media is emerging from the Covid-19 pandemic with a “spring in our step,” according to the company’s boss, Tom Bureau.
The magazine publisher closed 12 titles and cut 113 jobs last summer. But Bureau said the aim had been to find the “right structure” for the business and that its outlook was subsequently re-forecast to be “substantially better” by the end of the third quarter of 2020.
“We feel quite excited about where we’ve got to and it gives us the opportunity to ponder where we invest next,” Bureau said.
Immediate’s portfolio – which totals about 75 special interest brands including Radio Times, BBC Good Food, BBC Gardeners’ World and BBC Countryfile magazine – grew its overall ABC print circulation by 9% year-on-year in the second half of 2020.
Print subscriptions grew by 14% in the same period and are up by a quarter since the start of the pandemic in March last year, according to Bureau who said this figure would be “much higher” if digital subscriptions were included.
Across Immediate’s portfolio, about 60% of sales come from subscriptions. But this number varies considerably between titles – the children’s business makes 95% of its sales on the newsstand, while BBC Gardeners’ World and Good Food are both about 75% subscription-based.
Online Immediate brands reach about 75m unique visitors each month compared to 40m this time last year, according to Bureau.
Digital revenues – including advertising, subscriptions and paid content – make up about a quarter of Immediate’s total turnover, and they are becoming a “much, much bigger” part of the business.
“But in a way that’s because our print business is so strong, so if everything’s growing that’s a good problem to have,” Bureau said.
“As our ABCs demonstrate, we’ve always been big believers in our print businesses, and where print best suits the audience and the brand we have continued to substantially invest in print.
“So for us, multi-platform doesn’t mean pivot to digital. Multi-platform for us means many platforms depending on what’s the best strategic approach.”
Immediate’s strategy is to focus on “high-value special interest communities”. Bureau said this is both defensive, because the tech platforms like Facebook and Google are not focused on engaging with and offering expertise to these communities, and offensive because “there’s so many things you can do” for them.
“And actually, as it turns out, it’s a pretty resilient and robust place to be in the middle of a global pandemic because clearly people have had a lot more time on their hands to focus on the things that they’re passionate about and their interests and their hobbies,” Bureau said.
“Our purpose is to create happiness and enhance fulfilment for our consumers and if you can really do that then you’ve got a reasonably good place to build a business.”
Restructure to ‘build on growth’
Immediate last month restructured into three separate business units, two in London and one in Bristol, each with their own management team so they can develop distinct strategies to maximise the potential of each market.
The first includes Immediate’s “high growth, digitally-enabled, multi-platform brands and business models” including its food, parenting and history portfolios, RadioTimes.com and BBC Gardeners’ World.
The second is made up of established print brands with a large audience, including the Radio Times magazine, the youth and children’s brands, and the live events business.
The third, based in Bristol, will focus on building subscriptions and a larger digital footprint at Immediate’s craft, cycling, specialist, homes and science titles.
Bureau, who has moved from being group chief executive to executive chairman under the restructure, said: “Immediate has navigated the Covid pandemic successfully, with our special interest brands reaching more people than ever through rapid digital growth and a hugely resilient print portfolio.
“We believe the new group structure, with new business units charged with developing strategies and expertise for their individual markets, will enable us to build on this growth and capitalise on our huge potential.”
How Immediate Media navigated the Covid-19 crisis
Immediate Media was in “pretty good shape” before the pandemic, according to Bureau, and was outperforming the market by keeping print “incredibly strong”, building a fast-growing digital business and acquiring a number of events businesses.
Immediate, which was formed in 2011 after the BBC sold its magazines division to Exponent Private Equity, was bought by German publisher Hubert Burda four years ago but continues to be run as an independent business.
Immediate’s parent entity, Vancouver Topco, in which its results are consolidated, reported a pre-tax loss of £2.3m, operating profit of £1.2m and turnover up 14% to £241.3m in 2019.
“Overall, I would have liked growth to be a bit stronger, but we were growing,” Bureau said of the business before the pandemic hit. “Our budget for 2020 was to post decent growth at the bottom line and the top line. So I’d say it was all going fine – and then the world changed.”
March 2020: ‘Catching a falling knife’
On 16 March Bureau and his leadership team were having an offsite meeting when messages started coming in about a “rising panic” from staff about being in the office.
The UK did not officially go into lockdown until 24 March last year but it was on 16 March that Health Secretary Matt Hancock told the House of Commons that all unnecessary social contact should stop and Boris Johnson urged people to avoid pubs, theatres and other social venues.
A decision was therefore made that Immediate staff could begin to work from home immediately and Bureau used the offsite to try and predict the future.
“I asked my team to do a bit of a sweepstake about what profitability we thought we were going to have in 2020, and the general consensus was it’s going to be really bad,” he said.
“So we started to think about what we had to do immediately. Lots of people have managed the crisis well but I think what we did do was try to grasp the reality and make decisions really fast.”
This involved measures like a “no ties, no strings” short-term subscriptions offer for the Radio Times, which was rushed out to get into that week’s issue, to help older readers who would usually pick it up in the shops. Bureau said this had a “crazy uptake”.
“We didn’t know how bad it was going to be but obviously it got very bad, very fast,” he added, pointing to the fact the March results “fell off a cliff” even though only the last week was in lockdown.
“Then we actually had to start grasping the fact that Q2 was going to be horrific,” he said. “So it was a big shock to the system… at that point we had no idea how bad it was going to be but it was catching a falling knife.”
Q2: ‘Hindsight is not a skill’
Bureau soon began meeting on Microsoft Teams with his leadership team daily, with frequent interim board meetings, to get and share all the possible data – with one of the things most concerning him at the time the closure of WH Smith, on whose newsstand many Immediate titles rely.
“I’ve got this phrase which is hindsight is not a skill, as in you need to try and understand as much as you can in real time what’s happening,” he said.
“So in order to do that, you’ve got to get as much management information as you possibly can and we were doing that on a daily basis.”
Bureau said they needed to “get to a place where we were not making knee-jerk reactions but we were making timely decisions and decisive decisions”.
The short-term goal was to manage a way through the crisis that protected cash, meaning putting up to 200 staff on furlough, suspending the publication of some print titles that were “clearly going to be loss-making”, and imposing temporary pay cuts.
Bureau said: “By the summer it was becoming a bit clearer about where we were and unfortunately we decided to restructure to take some costs out of the business.
“Part of that was closing smaller titles which had previously been profitable but we didn’t think would come back as profitable businesses.
“And part of it was actually restructuring to just reduce the overall cost of the business, and in truth, some of that was no regrets decisions that perhaps we should have done earlier. So it wasn’t all about the pandemic – it’s also about getting the right structure for the organisation.”
Bureau said upping internal communications was key to retaining the support of his staff through the pandemic.
Bureau held weekly “ask me anything” drop-in sessions with staff, so they could understand what changes were being made and why, and moved the company’s town hall meetings from quarterly to monthly.
“One of the key things about working remotely is you can do it but suddenly people feel very isolated,” he said.
“And as a leader your sphere of influence reduces dramatically. So all that stuff of walking the floors, meeting people in the coffee queue, chatting to people you’ve known for a very long time which happens naturally, suddenly disappears. So you can’t just be passive – the lesson is you’ve got to be super active and create reasons for people to ask questions or to communicate.”
Q3: ‘Substantially better’ forecast
By the end of Q3 the outlook of the business was re-forecast to be “substantially better” than previously thought following a “huge uplift” in subscriptions from converted newsstand buyers who took advantage of the many offers launched to entice them in.
In addition, the digital business was “flying”, Bureau said. Traffic to Immediate websites almost doubled and the company began to focus its attention on monetising that readership.
By December the company had paid back all the money from the temporary pay cuts made earlier in the year.
Bureau said: “When you look at a number of our brands, they actually went from being the face of the crisis in Q2 to starting to really grow substantially year over year… so brands like the Radio Times which had a huge subscriptions uplift, brands like Gardeners’ World which has just been absolutely on fire, BBC Good Food, our children’s portfolio.
“Advertising was tougher but started to come back more strongly in Q4, in particular digital. Really what’s interesting is the momentum across all these different activities and the efforts that we’ve made have continued into Q1 of this year.”
On the other hand, the events business made a “small fraction” of its previous revenue despite a successful switch to running virtual events.
“But I think the team did a really great job of actually starting to build some real innovations and interestingly, as we look to the future and the world opens up, the thing about digital virtual events is the margin is much, much higher as a percentage of your revenue than the actual physical events,” Bureau said.
“So, if we can add digital and virtual events to our physical business going forward, it would have been a real silver lining.”
Some 10,000 sales were made for access to paid-for webinars like a BBC Good Food sourdough starter tutorial and a late-winter pruning masterclass from BBC Gardeners’ World.
“That was one of the exciting things – it didn’t feel exciting at the time but now it does feel quite exciting – which is the amount of pivoting and innovation that came from our editorial, our commercial and our publishing teams around, ‘Okay this business is broadly closed, what are we going to do to basically reinvent ourselves with something that is really positive?’” Bureau said.
“The amount of energy that came from those people and the new ideas and innovations was absolutely fantastic.”
Picture: Colin Stout/Immediate Media