Shortlist Media: Mike Soutar, Tim Ewington, and Phil Hilton
The founders on why print media still plays a vital role in the publishing industry
While most publishers are struggling to stay in the black and advertising spend continues to freefall, one would be forgiven for scoffing at the idea of launching a successful print publishing company. However, the Shortlist Media team have done exactly that. In just under three years, the company, which produces Shortlist, the most widely circulated men’s magazine in the country, has clinched over 30% of market share, and topped it all off with substantial commercial success. Shortlist Media has secured the loyalty of both the reader and, more importantly, the advertiser. Rupert Murdoch take note.
Led by chief executive Mike Soutar, the former editorial director of international publishing giant IPC, the senior management team reads like a who’s who of the periodicals industry. Between them, they’ve worked on some of the biggest titles in the men’s market – FHM, Men’s Health and Nuts, to name a few. Work began on the Shortlist proposition back in 2006. In a bid to get away from corporate life, Mike and the company’s strategy director, Tim Ewington, set up publishing consultancy Crash Test Media. The company, which is still trading albeit on a far more modest basis, worked with a range of international clients advising on product launches and development, mostly in the consumer magazines sector. “The consultancy was a way of nurturing some very leftfield, creative ideas that were probably too unorthodox for traditional media companies,” says Mike. “The first one we really focused on was the idea that eventually became Shortlist. It was at that point that we brought the rest of the team together.”
With the men’s newsstand market in decline, Mike and co were eager to determine whether this was linked to growing detachment from the magazine as a format, or just distaste for the existing content on offer. The laddism of the 1990s had faded, but the sector was still saturated with titles aimed at teens, where bare female flesh occupied the majority of page real estate.
“It was an interesting time,” says editorial director Phil Hilton. “That kind of content was a massive turn-off for affluent men in their late twenties and early thirties, and they’d walked away from the newsstand leaving this massive Shortlist-shaped hole.”
Generation Y A whole generation had grown up with the internet, expecting high-quality content for free. By targeting this audience, who had abandoned the newsstand, and going directly to them, they took a compelling proposition to advertisers.
“Our whole model is different from a historic print business,” explains Tim. “If you start with an enormous structure like a newspaper group, losing £30m to £40m every year, and try to fix that, it’s just too hard. Murdoch has certainly got a problem on his hands. We think free magazines are going to play a really important role in the future. We’ve built a business structured to work in tough times – and there will always be recessions.”
Despite the editorial confidence of the team, Shortlist still went through a lengthy research and development process before launch. Content ideas were tested on focus groups over a three-month period, and the feedback fed into the initial Shortlist launch product. At the same time, the team began to put together a proposition, including a prototype, for investors.
Through the team’s contacts, there was enough interest fuel a four-week pitching schedule, resulting in a £4m seed round from a group of investors (who also all invested in the second 2009 round), including hedge fund GLG, French Connection founder Stephen Marks, film producer Matthew Vaughn and the man who eventually took on the role of Shortlist Media chairman, Sir David Arculus. A long-established acquaintance of Mike’s, Sir David is credited with transforming Emap from a small regional publisher into one of the biggest media companies in the UK. He was also chairman of the IPC Group, chaired the government’s Better Regulation Task Force while heading up telecoms company O2, and brings the “helicopter view” to Shortlist Media, according to Phil.
With the level of experience contained within the team, producing the magazine and securing a revenue stream was always going to play second fiddle to the mammoth task of actually getting it distributed. It was the one element none of the team had done before, and provided a significant logistical mountain to climb. The solution was to manage a network of third-party merchandisers. In each region, Shortlist Media employed merchandising sub-contractors, a haulage team to deliver the magazines and a warehouse facility. Mike admits there were teething problems and it was six months before every part of the chain was solid and they could all sleep at night.
The established distribution network forms the basis for Shortlist Media’s stronghold. It enabled the fast roll-out of women’s magazine Stylist, Shortlist‘s sister title, and has also allowed the first magazine to achieve an audited circulation of 513,000, outperforming FHM (231,000), GQ (120,000) and even The Times, which just tops 500,000.
“What we’ve done is turn the traditional publishing model on its head,” says Mike. “We’ve changed the way consumers look at magazines and the way advertisers get hold of a very hard-to-reach audience. We’ve also made the publishing industry think again about using hybrid models to distribute content to their audience. And commercially, we’ve been very successful.”
Shortlist magazine was profitable within two years, and were it not for the launch of Stylist, the company would have been too. However, with the second magazine growing at a much faster rate, the team are incredibly confident about the year ahead and will achieve “well in excess of” £10m turnover in 2010.
With a UK stronghold firm under its belt, the team’s focus now is to up its game digitally and start thinking about international titles. “The UK is a very progressive, competitive marketplace,” says Mike. “It’s like bootcamp for magazine ideas, because there are more titles per capita than anywhere else in the world. To succeed you need to create a compelling proposition for the audience, and we feel we’ve pioneered a new form of publishing and will soon be ready to make our first steps in exporting those brands to other markets.”