The merger of Australia’s two big publishing houses, Pacific and Bauer Media, won’t create a monopoly in the industry, says Bauer CEO Brendon Hill.
Yesterday, news broke that Bauer Media, part of an international brand, will swallow Seven West Media’s Pacific magazines in a $40 million deal.
The sale, which is still subject to Australian Competition and Consumer Commission (ACCC) approval, is set to be completed by the close of 2019 if given the green light, and will see brands such as The Australian Women's Weekly, Gourmet Traveller, New Idea and Better Homes & Gardens sit under one roof.
However, speaking to AdNews, Hill rejected the idea this creates a monopoly, saying the two companies don’t compete with each other and instead digital giants have become the competitors.
“We're only 1% of the advertising share when we used to be 8%,” Hill says.
“So we're competing with digital clients from overseas and they're our main competitor threat. So this gives us the opportunity to compete with them with a combined digital audience and then keep us sustainable moving forward.”
“We're working closely with the ACCC but we believe the transaction will not lessen competition in any relevant market given that magazines compete for advertising, eyeballs and content against the digital giants from overseas.”
Instead, Hill sees the merger as building a “more sustainable future” for the whole industry which has seen iconic magazines such as Cosmopolitan and Dolly shut.
“There’s been a bit of rationalisation in the last few years but generally that seems to have slowed down,” he says.
“But without these two companies coming together there would have been further rationalisation of the portfolio. Under this new structure, however, we're going to have a much more sustainable business moving forward.”
While speculations circle of possible magazine closures at the enlarged Bauer, particularly for those titles that cross-over, Hill says there are no plans to shut magazines.
“All the Pacific titles will be coming and we're delighted at that,” he says.
“To be fair, there's not a lot of crossover. Brands are very uniquely positioned to have different readerships and even the ones that you think would have a higher crossover like New Idea and Woman’s Day, it's a tiny amount of readers that read both.
“Only about 25% of readers read both, so when you think there's 1 million Woman’s Day readers a week and 850,000 New Idea readers a week, only 25% cross-over, so they have big unique audiences that are really just on the one brand.”
Instead, Hill says to expect more launches in the new year.
“There will be more launches. It will be a very exciting and vibrant business moving forwards,” Hill says.
“We're always looking for opportunities, media is always reimagining itself. There's still room for new print launches, digital launches - there are lots of different things on the way.”
One such launch is the digital Gen Z-focused title Syrup which launches early next year targeting 16-24 year-olds.
As for what impact the Pacific purchase will have on jobs, Hill signalled there could be roles cut as the business works through the matter over the next few months.
Hill says the merger will mean Bauer can add more resources to its research, sales and content marketing teams for clients, as well as provide them with more third-party data.
“It will be more efficient for agencies to buy off one company and the ability to scale these content-led campaigns we're so renowned for across all the magazines and websites will be great for advertisers to get bigger reach.”
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