Duncan Greive sits down with Bauer CEO Paul Dykzeul and publisher Brendon Hill to talk about the state of its business, and their double down bet on print in the digital era.
Bauer, by far the country’s biggest magazine publisher, is in the midst of another of its regular spasms of change. Last month it announced the departure of Simon Wilson after a decade with the company, launched Nadia Lim vehicle Nadia, announced Paperboy, a free weekly and informed the market that Metro was going bi-monthly, while rumours circulated of a consolidated website to combine all their current affairs brands in a single product.
I was planning on writing about it and trying to figure out what it all meant, but heard that Paul Dykzeul, the company’s CEO had been complaining about certain media reporters writing about the changes and getting it wrong when they could just have called and asked him what was up. So I took his advice and booked an interview.
We met a week ago, in a moment of change for the company: the first issue of Paperboy was in its closing stages (it’s out today), while immediately afterwards we both headed up to Brothers Beer, where Dykzeul spoke with sincerity at the going away drinks for Simon Wilson, the talismanic former editor of Metro who finished up with the company that afternoon.
Dykzeul was joined by Brendon Hill, the publisher who has overseen Paperboy‘s development, and we talked about the state of their business and the magazine business itself, how their model is evolving and why it is they can’t get no respect from Gavin Ellis.
This transcript has been condensed and edited for clarity and brevity.
Start by giving me a broad state of Bauer Media New Zealand.
Paul: We unfortunately get drawn into that argument of print being in decline [but] the truth is, it’s newspapers that are in decline. You know, the magazine business, and our business, is still terrifically successful. The area of celebrity is challenged, it’s challenged everywhere, but it’s hanging in there. In the areas like current affairs, or homemakers, or food, it’s still strong as all hell. And of course, we were very late starters into the digital space – arguably one of the last brands to get onboard. But it’s really kicking for us now, and starting to show some really interesting signs and lots of interesting developments.
Bauer are very very happy with New Zealand. They’re constantly amazed that such a small country like New Zealand can do so well, it baffles them to be honest, that a tiny country has such an extraordinary level of sophistication around the magazine publishing environment. And you try and explain to them about New Zealanders being voracious consumers of media, you know, we’re great readers, we’re big consumers of libraries, of magazines; statistically we’re up there in the top two or three in the world. They love the environment we’ve created here and we’re sort of held up as a little bit of a shining star, which feels nice.
Yeah, that must be really nice. So over the course of this calendar year, how many titles have you launched versus folded?
Paul: We’ve closed one, and that’s Cleo, and that was because it was a licensed product from Australia. When it folded there, we had no choice. But the truth is, that very young female market is the most challenged, because they’re the most digitally savvy. And even though we’d built a really nice digital platform around Cleo, we had to close the Cleo brand, and what we’ve done is we’ve launched Miss FQ which is kind of another Cleo in a different form. And we’ve built a digital website for Miss FQ which Cleo didn’t have – I think it’s already pretty close to Cleo in terms of numbers and dollars, but it’ll have a faster trajectory. In terms of launches, we’ve launched two magazines and acquired the rights to a third, the Countdown food magazine. We’re doing a lot of work with Countdown on that at the moment, and we’re supremely confident that we can make that a far better magazine than it is currently.
The other one of course is Nadia. It’s a unique model, and we’re over the moon. I’ve been in publishing for 30 odd years, and I’ve never seen anything quite like it. Normally subscribers are converted newsstand readers, so they read the magazine and think, ‘Oh I like this, I’m going to commit by buying the next 12 months or 18 months or two years’ worth of editions.’ And what we’ve found is that we sold a surprising number of subs before the magazine even went on sale on the back of the reputation of not us, but obviously Nadia [Lim].
Brendon: Instead of launching a brand from scratch, we thought, who really owns that lifestyle and wellbeing space here, and Nadia was definitely the first person who came to mind. 96 percent awareness in the market – that’s huge, just behind John Key and Richie McCaw. So we approached Nadia, and she’s just a lovely person – she’s very astute, and her husband is really good too, he’s got a marketing brain, so they’re a great team. They’ve got a great editorial team around them too. [We want to] really make sure we’re carving something out that we’re not already covering in our existing titles, not just to attract new advertising revenue but to attract new readers – we don’t want to switch them over from other titles. Nobody’s ever done [a personality-branded magazine] here: Jamie Oliver’s got one, and Donna Hay has one in Australia. So we’re onto something good, and the whole company’s behind it, and we’re really pleased.
So, Paperboy – how big of a deal is it for Bauer?
Brendon: It’s a huge deal, it’s the first time Bauer globally has entered the free magazine market, so it’s a major. For us we’ve been working on it for two years really rigorously, but it’s been in the pipeline for about three years. So it is a big deal, it’s been a massive investment for us, it’s a real leap of faith into print advertising for us, really. We think we’ve got a product now that’s going to kind of innovate and disrupt the competitors, and we wanted to do everything better than anyone else. And hopefully, touch wood, we’ve got it.
So everything we’ve set out to do we’ve achieved but it took a long time to get that strategy right. And Bauer’s been incredibly involved – we’ve had a lot of chats internationally with people from around the world. We’ve taken a lot of learnings from global markets, we’ve looked at London, the US market. You know in London, the free magazine market is huge. Eight out of the top ten magazines in London are free now. There’s nothing like it in this country and there’s nothing like it in Australia. So we’re really confident that we can prove this model here and then take it global. Thats our long term goal.
Paul: And truthfully – if it doesn’t work we’ll can it.
Brendon: Don’t say that!
Who are Paperboy‘s key competitors?
Paul: Well one of the reasons behind it is we’re seeing this massive decline in the quality of the newspaper industry and it’s only going to speed up, you know. There’s parts of the newspaper industry that has maintained and continued to do well – that’s what we’re after.
Viva being the obvious one.
Brendon: Yeah, with our deadlines and our brand environments we’re not that well suited for retail advertising especially weekend sale type stuff, you know your Briscoes and your Kathmandu, your travel. Any price sensitive advertising we miss out on. So, this way, by making our deadline Tuesday we can capture that weekend price marketing those companies are doing.
Well that makes sense from a commercial perspective. I guess the question I’ve heard asked is about what audience is there for print, or has it now broadly migrated to digital?
Paul: That’s a really interesting question because the area that we’re competing in, it’s an incredibly old audience. I mean the average age of a Viva reader is 58, and yet it’s full of advertising for products that are being brought by 58 year olds but also they have a lot for a younger audience. Getting to that younger audience through a paid model is arguably more difficult – let’s be realistic, that’s the case. The way we’re going to do it, we still think there is a voracious desire around it [but] if we don’t get the quality of it right and we don’t have that right kind of editorial and that right kind of content then this audience won’t read it.
We’ve done a shitload of research, we’ve done I don’t know how many bloody focus groups that Brendon sat through. We’ve got focus group rooms here, I’ve sat through them as well and they’re utterly extraordinary. We’ve got one of those one-way mirrored systems, so we’ve done a lot and no it’s not perfect. But it will develop and evolve and we’re putting a really good team around Jeremy [Hansen, Paperboy editor] at the moment, and with the New York Times content these are the kinds of innovations we’re going to bring to it. If we don’t get it right we’ve only got ourselves to blame.
I mean I think Jeremy is a phenomenal talent, if anyone can pull this off it’s him. It’s a weekly 48-page type of thing isn’t it?
Paul: We’re hoping to get 40 pages of ads and eight pages of editorials.(laughs)
Fundamentally one of the things you’ve seen out of magazines is that hollowing out. You know Metro had six staff writers ten years ago. Now it sort of has one-ish.
Brendon: Yeah, one and a half and that’s not a reflection of the writing, that’s a reflection of the market moving into the freelance base.
It is but I mean doing things weekly while maintaining quality while you’re drawing from that freelance community is a challenge.
Brendon: Yeah, so with Paperboy we’ve got four full-time writers, and jokes aside, there is always going to be a fair bit of advertising in it. It’s free so, you know, just like when you have stuff online you have to have advertising.
Brendon: Out of those 48 pages we hope to get a good 15 advertising spots in there just based on normal percentages. We got six pages from the New York Times [inside the magazine] so to have four writers creating that much content we’re going to have it sourced well, we’re going to have eight staff on it more or less so that’s a good amount.
Yeah that’s really good.
Paul: It’s interesting what you were saying about Metro. The thing that drove Metro more than anything and drove North & South… I remember when I was at [our original office in] Hargreaves Street there was a woman called Kathy Scott on ad sales at North & South and I remember standing by her phone one day and she’s basically telling these arseholes, these agency arseholes, to fuck off, you know we don’t want your ad. I mean, Christ would we love that back again. That supported those six journalists [on North & South] so if we got that part of it right then the other part would be ok.
The truth is, now it’s a risk. But the way Auckland has changed in the last couple of years, and it’s changed extraordinarily in the last five years, we think that the timing is good. Both Fairfax and NZME have got their challenges on the print side – they’re both very much focusing their lives around the digital size of the business. They’ve almost thrown in the towel and abandoned the print side of things to a greater or lesser extent – I probably shouldn’t be saying that (laughs). But the quality is just declining and declining and declining. No wonder they can’t get a younger audience because the younger audience are thinking what the fuck is in there for me? So we’re going to have a go, and they’re not going to like it. They’ll fight back but it will be good for the industry.
As journalists we sort of look to Metro, North & South and the Listener, an area which is a small part of your business but [feels] much larger because it’s current affairs. Is it something that’s disproportionately important to the company too? Is that fair?
Paul: I’m deeply passionate about it. I’m a voracious reader, I’m a bibliophile, I’ve got thousands of books in my library, and I love every minute of it. I’ve had the best and the worst times with Metro and the Listener, lost the bloody Toni McCrae case, won the David Lange case, I’ve been through the fucking gambit of it. I love it and I’m not a journalist by trade, my background is the graphics side of the business. But I love what we do, and it’s not a significant contributor to the overall profitability of the business, but it’s a significant contributor in terms of who we are as a company, and it says a lot about what we’re able to do. Our standards are high as a publishing organisation, largely off the back of those businesses. There are people who work in those teams who are held in very high regard in terms of the structure of the business.
You get people like Gavin Ellis who go on and on about investigative journalism and the Listener and North & South never even get a freaking mention. I just find that astonishing, that in a country like New Zealand, you can have two very strong current affairs magazines that people are still willing to pay money for every week and every month, and significant amounts of money, and get no mention.
The issue going forward and that we all need to be careful of, is that the newspaper industry may be challenged, the magazine industry may be challenged, TV is being challenged, but bloody hell, journalism is really important. The role of journalism, and what journalists do in society, has to be, in my opinion, guarded enormously and guarded jealously. Close your eyes for a moment and imagine that the only news you get is from TV. We’ll wind up like America. We’ll be the dumbest fucking country in the world. I mean, Americans don’t read books or magazines anymore, they just watch TV. Look what’s happened. Do we want that for ourselves?
That’s why, Duncan, things like the Canons [the Canon Media Awards], I went in and said, I’m prepared to pay a third of it. If Fairfax pay a third, NZME pay a third, and bloody Bauer pays a third… because I think it’s really really important. What these guys do, in my opinion, is God’s work. It’s a significant part of why we’re the organisation that we are. See, Australia doesn’t have that, and the Germans don’t really understand it either. One of the best bastions for them is television magazines, you know? They make a lot of money out of television magazines, and I wish we could.
The timing of this is intriguing because, well, I’m sure I’ll see you up at Brothers [later today] to farewell Simon Wilson, who was kind of one of the lions of journalism and led one of those titles until a year or so ago. What does his loss represent to the company, because outwardly that might look like journalism isn’t as important to Bauer as it was once. So talk about Simon first, and then journalism.
Brendon: Well, we don’t want anything commented in the press about Simon, but he’s still going to be a big part of our business moving forward. We’ve seen it before in many, many organisations in media, there’s an outsourcing model, when you need different voices and perspectives in magazines, and having more opportunities to get different writers around the brand, we think we’ll get a better product for our readers. We think Metro needs changes – we’re going to change the frequency of Metro, we’re going to invest in its paper quality, make it bigger, get more in it… and we’re doing that firstly for our readers and then secondly for our advertising customers.
Because our advertisers have more choice now, in terms of where to put their money, and we need to improve the product for them. We need more voices around that brand, we need to tweak the direction slightly, and we’re going to relaunch that brand. Go to market and invest some money in it. Paul said to me that it hasn’t been invested in for quite some time, so we want to change that, and we think at the same time that using this weekly to push people into the paywall bi-monthly, is a very good model. We’ve seen it before with pushing website readers into paid models. All our magazines are increasing circulations, having their content online as well, and when it grows it doesn’t cannabalise. So we think it’s the right time to grow Metro, to make it bigger and better.
So Paperboy and Metro are going to be connected?
Brendon: They’ll work together closely for sure, but there’s a lot of overlap – they’re both about Auckland. Paperboy won’t go into the same depth that Metro does; by making it bi-monthly and getting more writers around it we’ll be able to go into the issues harder in Metro, yeah? And Metro will maintain those big pillars, like best restaurants.
Paul: And just going back to the Simon thing. I have a policy of not talking specifically about individuals. I mean, no-one’s a bigger fan of Simon than me, and he’ll tell you that, I’ve been a great advocate of Simon. Right now in the building, Duncan, sitting there thinking about this question, what you just said, right now, there’s four ex editors of Bauer magazines working on other projects. You know, Paul Little’s here at the moment, Bevan Rapson’s in here, Wendyl Nissen’s in here at the moment, Megan McChesney; I can’t bloody well think of who the other one is.
I got the shits the other day when Gavin Ellis was talking about the accountants in Germany making the decision about Simon. With all due respect to Simon, the accountants in Germany don’t even know who the fuck I am. They won’t know who Simon is. And it’s like when I used to work for [Australian Consolidated Press owner] Kerry Packer – all the years we both worked there, I worked there for longer than Brendon, and Kerry never came downstairs and said, “I want you to tear this bloody bastard up for ass paper”, you know? It didn’t work like that. And I think the thing about Simon is, he’ll continue to do stuff for us, and [he wasn’t] gotten rid of by the accountants in bloody Germany and Australia. If you said to them “who’s the editor of Woman’s Day?”, they wouldn’t know. The company’s run by the New Zealand management team, it is not run by the Germans or Australians. We run it and if it’s wrong, I’m the one who gets replaced.
Lastly, I guess was a question for you, as you alluded to, sort of 30 years in – you seem like you’ve got a lot of energy for the fight still – will you continue?
Paul: Look, I don’t mind telling you, I was 64 the other day, I love every minute of it. I don’t mean this to sound smartarse, but if it all fell over tomorrow my world wouldn’t change that much, and I don’t mean that in a smartarse way, but it would change enormously as I love this and it’s a huge part of my life, I love every minute of it and I’m extremely proud of the team. I’ve got the most extraordinary management team. These guys are all incredibly talented and all a hell of a lot smarter than me. There’s a lot of smart buggers in the building, and I’m really proud of that. I’m working to make sure that there is a succession plan, and there are people in the building that will take over the business – that won’t be my decision, of course, but I’m absolutely convinced that that is the case. But for the moment I really really love it and wish we could go a hell of a lot faster as a company.
In which direction? Where would that pace take you?
Paul: The thing I would love to do more than anything is to acquire. We’re a two-platform business now, you know? We’re magazines and we’re digital. And digital’s small, but we’re growing. So that’s encouraging. But I would love to acquire another business, and the mandate is there to find and do that stuff. We’ve just got to find the right ones, get the Germans confident that we can do it, and I’m sure we’ll get the go ahead. I’ve never sat on my hands – the prospect frightens the hell out of me – and I don’t want to do that. As long as I can add value to the business… the minute I start having doubts about that, I’ll go.