Special-interest magazine publisher Future has been on an acquisitions tear since 2016. Now, it’s set its sights on buying lifestyle magazine publishing group TI Media, publisher of Marie Claire and Wallpaper, for £140 million ($181 million).
The merger will give Future a total of 220 global brands which mostly complement each other rather than compete. With it, Future is embracing the challenging women’s interest and lifestyle magazine categories: The fact that TI Media has been up for sale several times over the decades is proof of the competitive nature of the landscape.
“What Future does with those brands is the most interesting aspect of this,” said Alice Pickthall, senior media analyst at Enders Analysis. “[Future’s] strategy has been calculated thus far. It’s very data-driven. It’s done a phenomenal job in applying that strategy to other brands.”
Agency sources say that Future is known for its strong digital clout thanks to launching several digital-only brands. While for TI Media, digital has been more an area of development. Future has also built proprietary tech and price comparison widgets which let audiences compare items on Future’s sites, like T3 and TechGadget, from other retails across the web. As well as adding a solid revenue line for the magazine publisher, this gives it useful data points to inform content and commerce decisions.
Future has been on a turnaround effort for the last six years, restructuring and selling off assets, partly driven by the appointment of CEO, Zillah Byng-Thorne, who has also held non-exec board director seats at Paddy Power Betfair and Trainline International.
According to Alex DeGroote, an independent media analyst, Future has spent over £350 million ($453 million) on acquisitions over the last four years, from £5 million ($6.5 million) in 2016 to £180 million ($233 million) in 2019. The current market valuation stands at £1.3 billion ($1.7 billion).
“It is the industry consolidator, one of the publishing big boys now,” said DeGroote, adding that tech platform and publisher Purch and TI Media have been the bigger deals. The group is supported by shareholders and banks who provide Future with credit, so raising funds has not been an issue.
Purch, which it acquired in 2018, was a way for the publisher to build its audience and revenue in the U.S., which seems to be paying off. According to DeGroote, over 50% of revenue comes from the U.S., with media — including commerce and digital ads — accounting for 70% and magazine sales accounting for 30%.
“It’s a rare example of a U.K. media company that appears to be succeeding in the U.S.,” he said. “Zillah is seen as having the magic touch. At a time when nearly every other media exec is scratching their head over business models, she and her team have a clear strategy and are ambitious.”
Media companies have higher valuations when portfolios include a line of recurring reader revenue, like subscriptions. But Future hasn’t gone deep into digital subs, yet. Instead, revenue is made from commerce, display ads and sponsorships. Its focus has been to look at how it can generate the most value out of the reader, rather than serving ads, which other publishers seem to be putting into practice now too, according to media analysts.
“The entire model is to take a category and work out how to monetize readers in the most circular and holistic ways,” said Pickthall. “Often, traditional publishers approach serving content and building a brand. Future looks at things in a circular way at how best to optimize and appeal to readers, whether that’s e-commerce or even B2B.”
There’s also been a keen eye on keeping costs down. A simplistic example of how the company is more conservative than others is by looking at its address, said Pickthall: Future’s HQ in Paddington, London, has a lower sense of swag to House of Hearst, the rival magazine publisher’s prime retail space in Leicester Square, London. “Internally, the mindset is ‘maximize what you have,'” said Pickthall.
Agencies also welcome the move. “In a publishing sector which usually has negative headlines, this is a positive one,” said Dan Wood, joint head of MediaCom, Beyond Advertising. “The magazine industry in the U.K. is vast, consolidation is needed to safeguard its long-term future. We welcome and support this.”
Future, because of its focus on niche specialist brands, has typically had a lot of direct sales relationships with advertisers. In the lifestyle categories, solid agency relationships are necessary. One agency source at a holding group said that the group’s spend with Future, compared with TI Media was tiny, due to TI Media building very collaborative relationships over time with U.K. agencies.
As with all acquisitions, cost synergies will be the focus over the coming months. According to LinkedIn, the number of employees at Future has grown slightly since 2017 from 1,300 to 1,500, mostly based on London and Bath, South West England.
“Future stands out in terms of other magazine publishers,” said Pickthall. “Not just from their acquisition pathway, which has been forceful, but the way it looks at monetizing brands and maximizing their assets. It’s clearly leading.”