‘Australia is one of the toughest markets for magazines in the world’: Bauer’s incoming CEO Brendon Hill and COO Veit Dengler on succession, consolidation and digital growth

When Paul Dykzeul took the helm of Bauer Media in 2017 he was very vocal about wanting to deliver the business the kick it needed. Entering after Nick Chan’s short 12-month leadership period, Dykzeul told Mumbrella he was keen to do whatever it took to get the business back on track.

Keen to avoid that messy leadership switch again, this time Bauer has focused on succession planning, moving longtime Bauer team member Brendon Hill across from his role as NZ CEO into the Australian business. Bauer Media Group COO Veit Dengler also came over from Germany to help facilitate the change.

While Dykzeul had already given over 20 years to the Bauer business before taking on the leadership role, Hill isn’t far behind. He’s been with the company since 2006, transferring to New Zealand in 2015 after holding the title of publisher in Australia. Hill’s appointment, says Dengler, was the ideal choice for the business and a plan which had been a longtime in the making.

“It’s a great sign if a business leadership team is strong enough that you can do succession from within, that always has to be the objective and it’s a great advantage because we have had time to see Brendon develop and make sure he will be a good fit for the role. That’s the way a succession should ideally work,” says Dengler.

Dengler is helping with the transition

A focus on digital

In the press release which was circulated last week announcing the appointment, Bauer’s digital assets were named before its 57 print titles. I ask Hill if that was a deliberate choice, to make it clear that this is a business which is viable in new ways and not held down by the shackles of print.

“We’ve made no secret of the fact that we’re going to keep growing our audiences and we also believe the data that will come out of it that will put us in good stead for the future. The business has been transitioning for sometime and globally we’re getting very serious about these different revenue streams and different areas for the business to grow,” says Hill.

Hill says there are three core parts of the business which are paving the way for its growth. Firstly, the storytelling ability the publisher has long prided itself on, the great crafts and craftspeople behind them. There’s also the fact people pay for the Bauer content, namely in the form of buying its print titles.

“The next generation of that is using that quality to do things differently for advertising clients, showing them how we can evolve their content for all e-commerce strategies now, it’s a great way of marketing digital and we’re in a good position to utilise that in the online space,” says Hill.

The last key pillar is the audiences for Bauer, buoyed by the strong brands it still holds and the trust consumers have in them.

“Those brands, people trust them, they engage with them, the dwell times are long. So combining those things together, growing audiences for strong brands, puts us in a really good position to grow new revenue streams and new business models.”

Dengler says magazines will always be the heart and soul of the Bauer business and that the publisher makes magazines for its readers, not as an asset to lump in for an advertising package. He says Bauer will always be focused on quality and the magazines will come first.

Hill

Consolidation in the industry

When he spoke to Mumbrella in 2017, Dykzeul flagged that he would be happy to have the conversation around consolidation, should it come up. That was during a very different time for Australian media – even in the short two years since, the landscape has seen one of the biggest mergers of its history in Nine and Fairfax. So would Bauer still be open to consolidation under Hill?

While Dengler couldn’t dismiss the idea entirely, he did say the Australian landscape is big enough for the three key magazine players it currently holds.

“I think if you look worldwide you will certainly see that some magazine publishers have disappeared or been acquired, that is a trend. But three is actually not that many players, in most big markets around the world there are more publishers than that. So I would say it’s actually already a fairly consolidated market,” says Dengler.

“I wouldn’t say it’s a top priority for us, you know, it might be an opportunity if the price is right, but it’s not something that we absolutely have to do.”

2018 was a big year for Bauer, and not necessarily in a positive way. The publisher closed several titles, acquired a couple from News Limited, and lost some senior people along the way. When asked if things will quieten down for the business now, and if all the axes have fallen, Hill says the nature of the industry doesn’t necessarily lend itself to a smooth ride.

“Media is always changing, as anyone in this game can tell you, but that’s the fun. That’s why we are into it, that’s why passionate people work in our industry. There are absolutely going to be changes, do we know exactly how the business will continue? No. But many big publishing houses are doing this globally, changing plans, acquiring, launching, closing. It’s the nature of media.

“So yeah, there will also be change. But we’re really excited for the core portfolio we have now and there’s a real focus on the executive team who are very strong and a good group of people in terms of innovation and looking at the business a different way,” says Hill.

He adds that the focus will be on new audiences, new revenue streams, but also maintaining the core quality of the product. Hill says the first few weeks in his new role will be focused on getting around, meeting everyone and finding out what the business can do better, how it can improve and where the opportunities are for growth.

Thriving in a tough market

“Brendon has a great position to start off from unlike Paul. When Paul came in and it was a little bit like trying to catch a falling knife. But there’s been a turn around which has worked very well and now Brendon can focus on building the business from a very solid base,” says Dengler.

“I think Australia is probably one of the toughest markets for magazines worldwide. I think the advertising decline was faster and earlier than elsewhere. And if you look at the share of advertising dollars that go to magazines of the whole advertising pie it’s one of the lowest in the developed economies. And because of your geography, distribution costs are very high compared to other markets.”

“So this is actually a tougher market to be in and in a way Australia has been a bellwether for us for other Bauer markets. Now the good part about being a bellwether is when you see it developing well that gives you courage for development elsewhere, but you’ll continue to be in a very tough market.

“It’s a tough environment. There’s no doubt about that. But I think we’re quite pleased with the way Australia has been developing.”