Friday, September 28, 2012

Future PLC reports that it has sold £5m through the Apple Newsstand since its launch one year ago; with print sales falling, new revenue stream is vital to company's fate

A number of trade media outlets reported on the short Trading Update the publisher Future PLC issued yesterday that mentioned its Newsstand sales. The news was definitely good, though it would pay to put it in perspective.

The Future PLC team, led by chief executive Mark Wood, issued a Trading Update that announced good progress in digital magazine sales. "Our progress towards a predominantly digital business continues. Sales of digital editions on Apple devices have passed £5m in the period since the Apple Newsstand was launched in October 2011," the update reported.

The UK publisher has been very aggressive in its digital publishing efforts with 110 iPad apps in Apple's App Store as of this morning, 67 of which can be found in the Newsstand. £5 million, when broken out by all the publications, is certainly looks like a smaller amount, but one must remember that many of Future's titles are niche publications such as Crochet Today! and Prog Magazine – most are simple replica editions that offer little interactivity, and many can barely be read due to the reduction in page size. (Few are like Cycling News HD, reformatted for the tablet platform).
Since 2007, the beginning of the economic crisis, Future has seen its revenue (or Turnover) reduced from £165.7M to £141.7M in 2011, and operating profits go from £12.1M to a loss of £16.5M (though EBITDA fell at a more modest level from £16.1 to £7.8 from 2007 to 2011).

From a business perspective, it would be hard for Future to sell off some of its titles to improve its bottom line as many of them are probably of little value, so keeping costs under control and making sure titles are not bleeding cash is of utmost importance.

Future PLC also reported in its Trading Update that it sees improvement in the U.S., stating that the company continues "to make strong progress and are close to returning to profitability, fulfilling a commitment we made a year ago to be profitable in the US in FY 2013."

Compared to many other publishing companies, Future PLC's revenue losses since 2007 look modest, though I am sure it doesn't feel that way within the company itself.