“Children Learn to Read with Our Magazines”
Despite decreasing circulation sizes, Egmont Ehapa, which specializes in children’s magazines has managed to increase its turnover by 50 percent in the past 15 years. “Panorama” asked Publishing Director Jörg Risken why print products are so popular with young readers even in the digital era.
“Panorama”: “We bring stories to life” is your publishing company’s slogan. What does that involve?
Jörg Risken (Publishing Director at Magazines Egmont Ehapa Media GmbH, Berlin): In our magazines and books, we tell the stories of the most popular characters and figures from the licensing world, i.e. those of well-known names such as Disney, Mattel and Viacom. We put that information in magazine form, enhance it with illustrations and pictures and add interactive elements such as puzzles and coloring pictures. We bring those stories to life for children (and for adults) by transporting the stories into their world.
You recently gave a talk titled “Print natives in the era of digital change: success models, no-goes and forward-looking strategies in the children’s magazine business” at the Children’s Media Conference in Munich. What’s the secret of your success?
Strong license partners and strong brands are essential. Many of our book and magazine titles have equivalents in other media, whether in the film, TV or digital segments. Typically brands that have proven successful on one platform can also be successfully converted to the print segment. However, that rule doesn’t always apply so you need to be flexible. There are some brands that are a big hit in the digital segment or on television, but don’t convert well to print and vice-versa.
In addition to licenses, what other factors have contributed to your success?
Regular dialogue with our target group is one of the key factors. We conduct regular surveys for that purpose. We keep our ear to the ground and understand what our customers want. To be successful, you need to plan a title so that it is used optimally at the height of its popularity. Run sizes therefore need to be managed accordingly. That means you have to launch a new title on the market at the right time, adjust the run sizes or frequency of publication and occasionally take a title off the market if the popularity of a brand is going downhill.
Jörg Risken: “Many parents feel great affection for our strong brands.”
What are no-goes for you?
When it comes to the adaptation of licensed products, we naturally have to respect the brand values of our partners, so we gear our products to their strategic requirements. We coordinate the content in line with the brand guidelines and stick closely to the style guides of our partners in terms of layout. We also pay attention to the safety aspects of the gadgets. That’s why we take the external inspection of the extras, which are each certified, very seriously. Rashly procuring cheap, but low-quality goods is therefore just as much of a no-go as a failure to uphold editorial standards. And, finally, for us it’s a no-go not to have fun at work because we are dealing with very emotive products. That’s why we need staff who are passionate about their work.
What are your strategies for ensuring the future success of your company?
Our strategy for the future is based on four pillars: magazines, books, comics and “new business”. We’ve set ourselves different targets in all four fields. The reason being that the conditions and competitive circumstances vary. For instance, in the case of magazines, the market is highly dynamic and there’s fierce competition for licenses; it’s also in decline in terms of total volume. It would therefore be rash and unrealistic to target considerably higher circulation figures in the coming years. By contrast, we plan to expand our book segment, since we see potential for growth there. We also anticipate that we’ll tap into further buyer segments in the comics segment, allowing us to grow further.
What products do you sell in the “new business” segment?
We’ve looked at our core areas of expertise and how we can put those to use in other business segments, such as gimmicks, which we refer to internally as covermounts. We produce those ourselves through our hub in Hong Kong. For instance, this year we’re introducing a set of collectible figures, which are currently highly popular with children. In addition, we also offer “combined products”. For example, we recently combined an edition of “Lustiges Taschenbuch” with a shoulder bag.
Do you also produce personalized magazines?
Yes, customers can feature by name in the book and have their photo included. In our shop, we also sell notebooks in the form of “Lustiges Taschenbuch”. For us it’s an attractive and relatively low-risk segment because the required quantity is produced on-demand, unlike with magazines and books, where you can’t forecast exactly the number of copies that will be sold.
Between 2000 and 2015, the number of children in Germany aged between 0 and 12 fell by 22 percent, and there are no indications of a reversal of that trend. How does the reduction in size of your core target group influence your business model?
We are responding by focusing more on products that also appeal to adults, namely “Lustiges Taschenbuch” [the local version of the “Donald Duck pocket books”], “Lucky Luke” and “Asterix”. For instance, 55 percent of those who buy “Lustiges Taschenbuch” are 18 or older.
Has that proportion changed in recent years?
Yes, certainly. I don’t have hard evidence for the figures, but I suspect that it was around 10 percent lower ten years ago. We’ve found, interestingly, that “Lustiges Taschenbuch” is very popular with students, and is a life-long companion for many readers. That’s why we’ve launched a “Lustiges Taschenbuch” campaign that is expressly targeted at adults.
Ehapa has been present on the children’s magazine market for decades. How has the market changed in the past five to ten years?
The market is highly fragmented and has become even more so in the past few years. The number of children’s magazines is continuing to rise. In the three German-speaking countries, i.e. Germany, Austria and Switzerland, 190 children’s magazines are published on a regular basis. In addition, there are many specials, which make the market even more crowded. However, the total volume of all children’s magazines
is decreasing, as is the average number of copies sold per title. That naturally increases the cost pressure on the magazines, so our major challenge is being profitable despite lower circulation figures. We have the great advantage of having a strong international network. For instance, we procure covermounts together with our publishing partners from Egmont.
You mention the decline in total volume. In 2000, Ehapa Egmont sold 63.1 million children’s magazines and comics. In 2015, the figure was 47.9 million, which is a decrease of a quarter. Despite that, your revenue from that business segment increased during that period from EUR 124.6 to EUR 186.3 – a rise of some 50 percent. How have you managed that?
The retail prices have almost doubled in the last 20 years. In 2000, the average price of a magazine was EUR 1.95, whereas today it is between EUR 3.50 and 3.70. As a result, we have stable turnover despite the decrease in the number of copies sold.
The increase in retail prices is almost double the rate of inflation. That means your readers are willing to spend more.
Customers accept the higher retail prices, because the products have clearly been upgraded. For instance, we have massively increased our investments in covermounts. However, that also means that the rise in turnover from our books does not necessarily mean an increase in profits.
During your talk in Munich, you noted that children’s magazines have become high-quality publications that provide added value. In what sense?
We’re talking about highly active media that stimulate children’s imagination and promote their reading skills. That distinguishes them from other media, including digital media in some cases, and other moving-image formats that are based more on passive consumption. Children learn to read with our magazines, so it’s important to us that the stories are well-written and include interactive elements. The comics stimulate the children’s emotions and imagination. When we conduct surveys, the children are bursting with comments about what they associate with certain figures from the comics.
Most of your titles are a mixture of illustrations and text. To what extent does that combination cater to children’s needs?
The children who read our magazines are in the early stage of learning to read, so we don’t want to overwhelm them with huge chunks of text. Instead we want to introduce them to reading with a mixture of words and pictures and make them curious about reading. That approach, incidentally, is very popular with teachers, who hold comics in high regard.
Has that always been the case?
By no means. When the first “Micky Maus” [“Mickey Mouse”] magazines came out in the '50s, schools called for them to be boycotted because comics were regarded as trash. However, the situation has completely reversed now. Recently, we geared some “Micky Maus” editions specifically to the classroom. As our surveys show, many parents also welcome printed comics as a way of counterbalancing digital media a little.
Your magazines are published as stitched and perfect-bound products. What is the ratio between saddle stitching and softcover?
Two-thirds of our products are stitched and a third are perfect-bound.
How important do you consider it to be present on other channels besides your core print business as a form of emotional anchor?
It’s important, but it’s importance shouldn’t be overstated. It also varies depending on the digital channel. In the past two decades, we’ve had plenty of experience of digital media and can conclude that the forecast potential for print brands has not materialized by far. Around five years ago, there was a phase when our company group focused heavily on the production of apps. We invested a great deal of money in that, but a lot of it went down the drain. Looking back, I think we were right to take that approach to demonstrate our willingness to innovate. However, you also have to discontinue certain business models if they don’t prove to be as successful as hoped.
Is that also true of your websites?
Our experiences vary. We’ve had considerable success with the product websites for “Lustiges Taschenbuch” and the “Micky Maus-Magazin”. Marketing of ads and links to our Ehapa shop generate sufficient revenue for both the websites to support themselves with modest profits. They’re an important marketing tool, but not a business model that is comparable with print. We’ve also had some considerable successes with e-books, but nowhere near the industry forecasts of several years ago.
What proportion of children’s magazines do e-books account for?
Just under two percent in the case of “Lustiges Taschenbuch”.
Such a low percentage?
That’s largely because people in Germany tend to have reservations about digital reading materials, especially when it comes to children. In addition, digital media in Germany still have the stigma attached to them of being free of charge. People have got used to not paying for digital content. Another reason is that you need the haptic aspect of the physical book to get the full product experience. “Lustiges Taschenbuch” is a case in point. With digital media, there’s a certain distance between the reader and the content.
Do you expect the percentage of e-books to increase from two percent in the children’s magazine segment in the foreseeable future?
To tell the truth, I hardly dare to make any forecasts any more. The percentage will probably increase somewhat in the long term, but is unlikely to match the expectations of several years ago.
Can you give us a typical example of electronic media boosting the circulation of your print products?
No, we haven’t implemented any digital extension solutions that have verifiably led to an increase in sales of the printed magazine.
On the topic of electronic media, do you enhance your print products with animations, for example supplement the “Micky Maus-Magazin” with short clips as augmented reality elements?
To be honest, we haven’t yet found the optimal solution. We’re working on it, and we’ll have relevant solutions in the foreseeable future. So far the digital extension of our print products has tended to be through our websites. We’ve also experimented with QR codes, but they aren’t particularly popular with children.
Are you still pursuing electronic channels?
It varies greatly depending on the type of digital media. With “Lustiges Taschenbuch”, we’re continuing our e-books, because they’re relatively cheap to produce and we see it as a service to our readers. Naturally we’ll continue to run our websites because purchases generated in our online store via our websites result in sales revenues in the fairly low six figures. For the time-being, we aren’t working on apps, which is fine.
Under the slogan “Guided by our customers”, you seek to remain in constant dialogue with your core target group, as mentioned earlier, and regularly listen to children’s comments. How do you achieve that?
We invite school classes to our company, let them see behind the scenes and hold a short workshop with them, during which we put a pile of magazines on the table for them. That gives us a feel for how children respond, and we build their feedback into the implementation of our print products. We also conduct institutional market research, because it would be risky to draw conclusions that impact the development of our products based only on such snapshots.
Ultimately though parents are the ones who subscribe to your magazines or buy them at the newsstand. Do you know what makes parents choose your print products?
The tradition of a product often plays an important part. Many of our products are still very similar in terms of both design and content to what they were like 50 years ago, aside from the fact that all the pages are in color today. That’s why parents are often guided by their childhood memories. We benefit from the fact that many parents feel great affection for our strong brands.
A new study in the UK shows that just eight percent of parents of children aged eight and below are unconcerned about their children reading e-books, while 80 percent have concerns. There are also figures from the USA showing that parents are increasingly reading printed books instead of e-books. Do you think that reflects a retro trend for print? If so, what do you think is the explanation for that?
I don’t want to give the impression that digital media are inferior. However, one of the benefits of our print products is the fact that they counteract the fast pace of today’s world. That’s why print remains a relevant and important market for us. When it comes to the competition among different media, it shouldn’t be forgotten, however, that there isn’t only competition between print and digital. Owing to increasing leisure activities in recent years, the time available to children has decreased. Today many children are chauffeured around from one activity to the next. Nevertheless, there are increasing numbers of children’s magazines.
The Berlin-based company Egmont Ehapa Media GmbH, which was established in 1951, is a fully owned subsidiary of the Scandinavian Egmont media group and in Germany is market leader in the segment for children’s magazines, teen magazines and comics, as well as being the publisher of a range of websites and apps.
Its range includes print products that have been produced for many years, such as “Micky Maus-Magazin” [Mickey Mouse magazine], “Disneys Lustiges Taschenbuch” [the local version of the “Donald Duck pocket books”, “Asterix”, “Lucky Luke” and “Wendy”, as well as “Disney Prinzessin” [Disney Princess], “Barbie”, “Winnie Puuh” [Winnie the Pooh], “Monster High”, “Benjamin Blümchen” [Benjamin the Elephant], “SpongeBob” and “Galileo genial” [Galileo – the Science Magazine].