In the 14 months since closing the deal, Bonnier has brought in a bevy of new people -- including four editors in chief just this year. It's created a corporate sales and marketing group, hired its first VP of e-media, and introduced an American edition of Science Illustrated. But business remains decidedly rocky.
Last week, Advertising Age sat down with Bonnier Group CEO Jonas Bonnier, who was visiting New York from Stockholm to attend the National Magazine Awards, for his first interview with an American reporter since the acquisition. He talked about the upside of hard times, the further acquisitions he plans and why magazines don't need the web.
Advertising Age: You've had 14 months to work with the Time 18, but ad-page sales are still struggling. At the extreme, Ski magazine and Skiing magazine are down more than 15% so far this year, while Motorboating and Yachting have each fallen more than 20%. How would you say things are going?
Jonas Bonnier: So we made this huge investment in the States, and six months later, boom, recession hits. How does it feel? [Laughs.]
Ad Age: No one mentioned that in the prospectus.
Mr. Bonnier: Nobody said anything about it [laughs]. Actually you're not supposed to say this, but if you're in the media business and you work for years and years and years, you think you're pretty good at it. And then the general economy is so strong, so everybody who enters does fairly well. These times are sort of sobering and not that bad for us. It defines who actually knows what they're doing and who doesn't.
We've been trying to create a platform with the titles that we acquired. Time Inc. sold them -- and not because they were the strongest titles that Time Inc. had. Well, our intention is not to sell them, so we have to fix them, to get them into shape. And that's what we've been doing. And the crazy thing is that I feel very content with this, although this is a tough year. Because when you have very specific niche titles, the general economy does not hit as broadly, as hard as with general publishing or for instance, TV.
The exchange rates are definitely in our favor [laughs]. There seems to be a lot of opportunity right now because a lot of companies look at the portfolios, and a lot of the private equity decides what to exit. And so I think that we're going to do some acquisitions, actually, this year. We can build from this.
Ad Age: How are you making this platform?
Mr. Bonnier: We have 15 offices throughout the States, and 10 of them are actually brand new. So we moved maybe 900 people last year from one office to another, built an IT structure; we moved 42 websites out of the AOL service. So far we hired maybe 200 people down in Florida on accounting, IT support, all that kind of stuff. But now we think it's more or less in place. Now we're set.
Time Inc. is a great company if you want to be Time Inc., but we don't want to be Time Inc. We don't want to compete with them. So we're a different company. We have to apply a different culture, find different ways of going about it -- so there's a lot of turmoil going on, a lot of friction. It's always like that. When you acquire, you try to create a new culture with old people. As you know, media people are extremely conservative in most ways.
If I were to try to make an exit next year, it would be terrible, obviously. For me this is step one. For me it's a platform. Twenty years? Well, it's 19 to go.
Ad Age: You've got a 20-year horizon?
Mr. Bonnier: Twenty years is actually the horizon. My chairman and my board said -- when we entered the partnership in Florida three years ago -- they said if you don't have a 20-year horizon for a U.S. acquisition, don't do it. We've been around for 200 years. It's the same here -- the company down in Florida and these titles, PopSci and Field & Stream, they've been around for hundreds of years, right? So it's not a strange perspective, but it's definitely a long perspective.
Ad Age: Have you found anything since the acquisitions that you didn't expect?
Mr. Bonnier: One of the things that seems to be more and more true is that magazines in particular have a very good strong life separate from the web. I've heard so many magazine publishers all around the world saying for 10 years, 'You have to be on the web.' Why are you investing there? 'We have to. Everybody demands it, advertisers want it, readers expect it, we have to do it.'
Well, if you're niche, or for all magazines, I don't think you have to anymore. You can have a good magazine life just in print -- not everybody agrees yet. Give it a year. But I do believe so. I definitely believe so. All the research that we've been doing over the last year proves that magazines are a good stand-alone media property. Newspapers, it's a different story. But magazines are definitely okay without the web.
But I do think that we should invest in the web, in particular for these kinds of magazines -- not because you're afraid of anything going away. I think there's so much opportunity on the web.
Ad Age: It won't hurt any given print title to not have a web companion?
Mr. Bonnier: I don't think so. Time will make advertisers more professional and their knowledge about the web will grow. Four or five years ago, the advertisers were like, 'We have to be there; we have to do that.' Now people start to evaluate what they've done and start to see what actually happened. And therefore I think advertisers will be smart as well and understand that it works in two different ways -- complementary yes, but they are two distinct, different ways. So it's not part of one package; you have to choose. You'll choose placing an ad in a magazine for the strength of the magazine itself. You will definitely use the web as well but not for the same purposes.
Ad Age: Do you see a real ad-revenue opportunity online?
Mr. Bonnier: We have to understand that each brand will create less revenue on the web than in print, because print is a mass medium, and -- even though it sounds absurd -- the internet is not. It's a medium where I speak to somebody else, and the two-way communication is so good that as soon as you open it up, it becomes less and less relevant. When you sort of speak to everyone, you're not using the web the way it can be used. And that's the old-media sort of problem, that we try to use it the way we used the mass medium like TV or newspapers or magazines.
Ad Age: What are your goals for the print properties for the next 20 years?
Mr. Bonnier: For us I definitely believe in growth. But I have to get that growth from somebody else, not the market. There are so many things to do still, so much consolidation to do -- there's a lot of opportunity actually. There's a lot of potential here actually. I do believe so. I'm very positive how we can do it. A couple of things that we have to figure out, but in general I think there are lots of things to do.
Ad Age: You said Bonnier's not Time Inc. How are you different?
Mr. Bonnier: That would mean that I knew a lot about Time Inc. to answer that question. I know about Bonnier, though. Obviously, the most important thing is to embrace failure, because if nobody dares to fail, you won't go anywhere. That's always easily said and not so easy to actually live by. But it's extremely important. In a time where things change so fast, I think that you have to embrace failure ... cost-effective failure.