Future Publishing’s preliminary annual results made for pretty special reading last month – complete with a year-on-year profits rise and a ten per cent reduction in debt.
But how did CEO Stevie Spring and her team manage it? And, more to the point, how has her company managed to rebuff the economic slowdown that’s affected nearly all of her consumer publishing peers?
You won’t be surprised to hear that the ebullient Future boss believes the strength of the console video games sector has been a major factor in her company’s triumph.
And she’s just a mite pleased that, since taking over the Official Sony and Nintendo publications across the pond (from beleaguered publisher Ziff Davies), both magazines have rocketed in terms of circulation.
Console gaming did very well for us this year,” Spring tells MCV.
It was aided and abetted by all three consoles being in uplift mode the world over. And in the States, we took over Official PlayStation Magazine and Official Nintendo Magazine last year. The performance there just goes to show what a good publisher can do – Nintendo has been up 29 per cent since we took it over, with OPM up 50 per cent. So I think it’s fair to say we’ve done a better job than the former incumbents.”
Future showed an impressive understanding of the-cross media appetite of modern consumers this year, investing more than ever online – and doubling the web audience across its full company portfolio.
Unsurprisingly, it was in video games that it truly crossed into ‘next-next-gen’ publishing.
The highlight of the gaming year has been launching Qore on the PS3 Network, because that took us onto on-console media, which is another step forward,” adds Spring. We’ll be launching an HD version of the official magazine on the PlayStation Network in Europe very soon. That’s the biggest shift in games.”
A three per cent rise in reported pre-tax profit was the real two fingers to Future’s doubters – not least because the feat was achieved in the face of widely reported slowdown at the newsstands. Amazingly, Future’s ad revenues rose by the same figure.
So what was the secret? Spring believes it had more than a little to do with the Future readership’s loyalty to specialist interest subjects. Put simply, in testing times, people spend less on ‘luxuries’ – and more on the hobbies that keep them from thinking too hard about those depressing bank statements.
It’s very simple,” she explains. It’s the difference between want to have and need to have. If you describe yourself as a cyclist, it’s part and parcel of who you are. You’re almost a professional consumer in that regard – which is why we call them ‘pro-sumers’. Your monthly magazine is going to be way down the list of things you stop spending money on.
That’s why we’re proving more resilient than the overall market. Also, our host sectors are doing well: particularly games, cycling and guitars. Everybody says there’s chaos at the newsstand, but on our top ten titles on both sides of the pond we were up by double digits in 2008 – around 13 per cent each.”
The announcement of the preliminary results marked the end of Future’s three-year turnaround plan, and proved that the company is well on the way to ‘stopping the rot’ that gave its keen detractors reason to doubt not so long ago.
Spring admits: We got ourselves in a bit of a tangle a few years ago. So, in a way, we had to take our medicine early. We made tough decisions on refocusing the business, including the choice to concentrate on English language publications only.”
Spring adds: We’ve been very aggressive in organic growth. If you look at where we were when PS2 launched, compared to what we have today, the difference is startling. As we stand today, we have three official console titles in the UK, US and Australia. We’re much more rounded in the offer we have, and we’ve gone deep into the segments we’re really good at.”
With the turnaround complete and Future’s annual fiscal results bearing out the confidence in Spring’s rhetoric, you know what’s coming next, right? A series of brave statements and bullish forecasts?
Well, not quite. Having seen her peers in the consumer publishing world struggle of late, Spring’s well aware that – although Future’s specialist proposition gives it reasons to be cheerful – no-one can veto global economic factors. Maintaining a measured optimism, she says:
There’s good news around the business, but we’re not bloody stupid. We know that there’s a tsunami of negative economics coming over the horizon and I don’t think you can plan for a banking crisis or depression.
What we’ve been very good at is managing that risk so that we can invest as much as we can humanly afford to.
If that proves particularly tricky, we can tone down the investment on some projects – but if you’re asking if I want to, the answer’s no. Fortune favours the brave. If you look at next year, we will be more resilient than most. We’re pacing ahead.
We’re not seeing businesses fall off a cliff like some of our peer group. 2009 will be tough. We’re going to have to run flat out. But I’d rather be sitting at Future than anywhere else.”