Magazines. Singapore-based music-making platform BandLab Technologies, which last year acquired Guitar and MusicTech magazines, is increasing its investment in media by buying New Musical Express (NME) and Uncut from TI Media (formerly Time Inc UK).
NME was one of the UK’s oldest music weeklies and (copying America’s Billboard) became the first to publish the record charts when it launched in 1952 as “The Accordion Times and Musical Express”. Its early website, launched in 1997, quickly became one of the world’s largest music sites. But weekly circulation, which had peaked at 300k in the 1960s, fell to just 15k by 2015 when it became a 300k free weekly. After incurring losses of at least £2m for two years as a free magazine, NME ceased printing and became digital-only (and profitable) in 2018. Uncut was launched 22 years ago and currently sells some 40k copies, about 50% of its peak. The monthly is believed to be making profit of some £600k, half of which is generated by bookazine-priced specials produced from the NME archives.
NME and Uncut are being acquired for some £7m, an above-average 8x EBITDA price that might partly reflect the value of the 65-year archive. It is believed that BandLab plans to revive NME as a monthly print magazine.
The music magazines are among the first divested by TI in plans to trim the company’s 40-brand portfolio. The former IPC Magazines, which once accounted for more than 50% of all magazines sold in the UK, now has revenues of £200m, 30% down in the last three years. Operating profit in 2017 was £20m, just enough to meet the rationalisation costs of the company which, 12 years earlier, had pre-tax profits of £70m.
The publisher, whose major brands include many of the UK’s best-known magazines including Country Life, Woman’s Weekly, Woman & Home, Yachting World, Ideal Home, and Wallpaper, may generate 50% of its profits just from the TV listings market where What’s on TV and TV Times magazines have an aggregate weekly circulation of 900k. While the company has been usefully diversifying into TV production with documentaries for the BBC and A+E, TI Media’s future success will depend on a more focused portfolio and some targeted digital investment to shift the emphasis from magazines.
The company’s broad reach belongs to an era when publishing groups enjoyed scale economies in sales, marketing, printing and distribution. It must now find a new rationale. Perhaps some of the TV/video production, events, research and marketing services that have been serving the magazines could become self-standing businesses. A media company which habitually spends time and money explaining to advertisers how consumers spend theirs could, for example, grow a market research business.
One long year after it acquired the publisher for £130m, Epiris private equity has a slim-down growth plan and will be expecting newly-appointed chairman Tim Weller to expedite it. But, in the week when specialist media group Discovery Inc acquired Golf Digest magazine, the Singapore company buying TI’s music magazines demonstrates how the content, brands and relationships can be catalysts for digital media.
BandLab is an easy-to-use, all-in-one, social platform that enables creators to make music with fellow musicians everywhere. BandLab combines music making and collaboration tools like the world’s first cross-platform, cloud-based ‘Digital Audio Workstation’, with video sharing and messaging – across Chrome, Android and iOS. The service can be used on smartphone, laptop and even wearables, so people can make music anywhere, anytime and get feedback from others. It is a completely free and unlimited service. The monetisation comes from BandLab companies selling musical instruments and kit, including Swee Lee, the 73-year-old Singapore company that is Asia’s largest music retailer.
Having acquired the MusicTech and Guitar magazines from Anthem Publishing last year (but failing to acquire Rolling Stone magazine), CEO-founder Kuok Meng Ru is reminding us that such content (and even print itself) can play a key role in a community of enthusiasts. He is a guitar-playing music enthusiast who avidly read NME at school and university in the UK. He says BandLab was born out of a frustration that, even though tech has raised the quality of the music-making process, it has made it more fragmented.
The brilliant three-year-old BandLab platform now has 7m registered users from 130 countries making more than 2m songs every month and it’s growing fast. Last week, it was showcased at the prestigious annual Google I/O conference in Mountain View, California, where it wowed 7,000 leading Android developers with its role both as a creative tool in paediatric cancer care (students banding together to cheer up a terminally ill child and bring his favourite things to life using video, art, and music); and in the production of a commercial dance track (produced by three artists collaborating from the US and UK) which made the top 10 dance chart.
Kuok’s declared mission is “a world in which there are no barriers to the making and sharing of music – regardless of where you come from, what music you’re into or how much you earn. We are humbled by the fact that the growth of our user base, music creation and increasing engagement rate shows we’re delivering somewhat on what you (both creators and listeners) want and are looking for.” That’s the passion digital entrepreneurs can bring to global media networks produced ‘by enthusiasts for enthusiasts’. Specialist magazines are no longer dominant, but they can still be a key part of the mix.