Canadian Magazine Industry News
5 June 2008,     TORONTO
Five things (Canadian) magaziners should know about the British magazine industry

It's common practice for Canadian magaziners to look at how things are done south of the border. A session held this morning as part of the MagNet conference in Toronto, however, gave a small but influential group the chance to learn about the way things are done across the pond. Below you'll find a list of five things you should know about the British magazine industry, distilled from a presentation given by Ian Locks, who was CEO of the Periodical Publishers Association (PPA) from 1989 until last year.

1. PPA is the only magazine association in Britain, representing about 375 consumer, b-to-b and custom publishing companies. (The presentation from Locks took place just after the Magazines Canada annual general meeting, where a board-recommended bylaw change to allow trade magazines as members easily passed.) The PPA also has divisions in Scotland and Ireland.

2.  In 1992, PPA secured a 40% mailing discount from Royal Mail for all magazines across the board—no matter whether they are paid or controlled circulation. The discount was offered after  PPA threatened to form its own delivery company. While the discount remains intact, Locks says the government is trying to whittle it away. PPA also got magazines a zero rate base on the Value Added Tax (VAT), which is Britain's national sales sax. In other words, consumers don't have to pay VAT (17.5%) on magazines. Britain has nothing similar to the Canada Magazine Fund.

3. For consumer magazines, the primary source of income is circulation, which on average represents about 68% of revenues, compared to 32% from advertising. On the b-to-b side, circulation accounts for 27% of revenues on average. Newsstand is much bigger business than subscriptions in the UK, with retail accounting for 86% of total sales. A recession in the early years of this decade forced publishers to raise their cover prices, something Locks says "probably saved their lives."

4. Imported magazines represent less than 10% of the newsstand population in England.  (Ireland's situtation is more like the Canadian one, since its newsstands are inundated with English titles.) However, Locks noted that "virtually no UK magazines at the top level" are owned domestically. Companies like Hearst, Condé Nast and Reader's Digest have all set up shop in Britain.

5. Custom publishing is the fastest growing sector in Britain, with a growth rate of 244%. While most of these magazines have controlled circulations, some of them are sold cheaply in grocery stores, usually for a pound. The coupons offered inside the magazines, however, usually add up to five or six pounds, according to Locks, and there is some concern that custom mags will come to dominate retail in grocery stores and force consumer publishers out.

— Marco Ursi
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