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Meredith expands reach of magazines overseas Company targets rising incomes abroad as it adds to licensing deals

2008.10.05

Meredith Corp. magazines will stretch into at least seven new countries in the coming months as part of a campaign focused on enlarging the company's brands to take advantage of rising incomes overseas.

Five new licensing deals will bring Meredith's total to 25 such agreements covering magazine readers in 40 countries. The new deals will allow foreign-based publishers to create and distribute versions of Diabetic Living magazine in Italy and Mexico, and launch new versions of Parents magazine in Turkey, Saudi Arabia, Egypt and the United Arab Emirates.

An agreement will also allow content from Parents to be syndicated throughout Brazil.

John Zieser, Meredith's general counsel and chief development officer, said the Des Moines-based publisher has actively pursued global expansion since 2004, when the company's sole foreign franchise was an Australian version of Better Homes and Gardens.

Meredith's family of women-oriented publications are a natural for overseas licensing, company officials contend, because many of the titles deal with health, family and home-related themes. The list of licensing agreements now includes five parenting-related publications and three versions of Better Homes and Gardens, plus six diabetes- or health-related publications.

"Those titles have content that is transferable" to any culture, Zieser said, because women around the globe are interested in improving life for themselves and their families. "That message resonates to consumers in a very real way across borders."

Plus, the pool of potential customers across borders is growing.

Developing countries were home to 56 percent of the global middle class in 2000, according to World Bank research quoted in July by an online journal at the Wharton School of Business. By 2030, that figure is expected to reach 93 percent, with China and India accounting for most of the growth.

Meredith officials believe they are properly positioned to help those upwardly mobile populations satisfy curiosity about Western life.

Company leaders declined to specify how much the company will make from the international arrangements but said current revenue is part of a previously described $20 million licensing business that also includes things such as a newly unveiled line of Better Homes and Gardens home furnishings now sold at Wal-Mart.

Zieser said the overseas deals entitle Meredith to a percentage "in the high single digits" of each magazine's gross revenue. That number is expected to grow as each magazine develops, he said, but Meredith has no responsibilities related to infrastructure or the cost of international employees.

The agreements entitle Meredith's partners to training in the United States, company marketing and advertiser research, as well as a database of Meredith content dating to 2003.

Mike Lovell, director of investor relations, said Meredith usually maintains tight control on magazine content for the first few months but mostly leaves it to local publishers, within defined boundaries, to manage content after that.

"Once we feel like the bird is ready to leave the nest, then we'll kind of throttle back that oversight and let the partner make the magazine what it needs to be," Lovell said. "One thing you don't want to do is strangle these products and try to make it too much like the U.S., because it won't work."

Zieser agreed.

"Our publisher in China knows how to talk to the Chinese consumer better than we do," he said.

Samir Husni, chairman of the journalism department at the University of Mississippi and publisher of a "Mr. Magazine" newsletter, said "everybody wants to be out there" globally. But American publishers have chosen a wide range of tactics when it comes to overseas expansion, he said.

Other magazines, such as Cosmopolitan, have chosen to form joint ventures that give them tighter control of international editions, he said.

However, that comes with startup costs and management responsibilities.

"Meredith's concept of just licensing the product is a little bit easier than having to deal with the content on a regular basis," said Husni, a former Meredith consultant.

This week's announcements build on previous agreements that took Parents magazine to China, Indonesia, India and Greece. Diabetic Living, launched in the United States in 2004, previously had been expanded to Australia, New Zealand and Spain.

Forrás: http://www.desmoinesregister.com/article/20081003/BUSINESS/810030359/-1/NEWS04