Future wants to tackle a worsening U.S. print magazine market by merging its UK and U.S. businesses and by more quickly converting its American business to digital.
Reporting how Future swung from a £5.5 million annual profit to a £19.3 million loss in 2010/11, Future’s chairman Peter Allen explained he replaced CEO Stevie Spring with UK CEO Mark Wood because results under Spring had been “disappointing”, executive costs were too high and because Wood had led digital innovation, primarily with tablet magazine roll-outs. Wood is targeted with returning Future to profit in the next 12 months.
But Wood’s chairman also blames the U.S. division, which tipped in to a loss, for Future’s showing. Newsstand magazine sales there are declining faster than at home, by a third since last year. But, though Future’s U.S. profit declined, it was in large part because Future wrote of £4.8 million from restructuring there.
“The changes will also mean that we can accelerate our transition to a digital business model and start to sell our entire range of digital content to high-value audiences in the US and other key markets,” Wood says.
“Our aim is to see the US operation transformed from loss-maker, and the US market become one of the key drivers of profit growth from Future’s current product line.
“The key to the change is that new digital channels, such as the Apple (NSDQ: AAPL) iPad, are rapidly opening up new routes to international markets in which our niche products can quickly build a loyal following.
“Future’s success on the Apple Newsstand − with more than six million downloads of our apps in the month of launch alone − has demonstrated our ability to develop and deliver digital products at high speed. It also underlines the global appeal of our content, ranging from Cycling, Games and Technology to Music, Film and Digital Design.”
In other words, Future will internationalise its iPad magazines and further expand on its Radar website portfolio.
Future e-magazines were already available on iPad through Zinio, and the publisher already had a custom iPad version of its T3 gadget mag, which is selling over 18,000 per month. But it also recently used the iOS Newsstand debut to flood iTunes with standalone digital replicas of around 60 more titles. “Future has sold more digital editions in the past four days through Apple’s Newsstand than in a normal month,” Wood said shortly after Newsstand’s launch.
The group says it has its own in-house software, FutureFolio, for designing iPad magazines and is licensing it to peers.