Digital competition: Firms will be forced to
innovate to keep up with changing technology
IBISWorld Industry Report J5412
Magazine and Directory
Publishing in Australia
July 2013
Alen Allday
2 About this Industry
18 Competitive Landscape
31 Key Statistics
2
Industry Definition
18 Market Share Concentration
31 Industry Data
2
Main Activities
18 Key Success Factors
31 Annual Change
2
Similar Industries
18 Cost Structure Benchmarks
31 Key Ratios
2
Additional Resources
20 Basis of Competition
20 Barriers to Entry
3 Industry at a Glance
21 Industry Globalisation
4 Industry Performance
22 Major Companies
4
Executive Summary
22 Telstra Corporation Limited
4
Key External Drivers
23 Bauer Media Limited
5
Current Performance
24 Seven West Media Limited
7
Industry Outlook
25 Fairfax Media Limited
9
Industry Life Cycle
26 News Australia Holdings Pty Limited
11 Products & Markets
28 Operating Conditions
11 Supply Chain
28 Capital Intensity
11 Products & Services
29 Technology & Systems
12 Demand Determinants
29 Revenue Volatility
13 Major Markets
30 Regulation & Policy
15 International Trade
30 Industry Assistance
32 Jargon & Glossary
16 Business Locations
www.ibisworld.com.au | (03) 9655 3881 | info@ibisworld.com
Magazine and Directory Publishing in AustraliaJuly 2013 2
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About this Industry
Industry Definition
This industry includes companies engaged
in publishing directories and mailing lists,
or magazines or periodicals issued less
frequently than weekly. Magazine and
periodical companies are included if their
main source of income is the sale of
Main Activities
The primary activities of this industry are
advertising space in their own
publications. The industry excludes
magazines and other publications that only
have an online presence, but includes
online revenue from companies that print
actual magazines and publish on-line.
Periodical publishing (except internet-only companies and publications)
Magazine publishing (except internet-only companies and publications)
Directories (except internet-only companies and publications)
Telephone directories (except internet-only companies and publications)
Mailing list directories (except internet-only companies and publications)
The major products and services in this industry are
Mailing lists
Other directories
Other magazines and periodicals
Telephone directories
Women’s magazines
Similar Industries
C1611 Printing in Australia
Companies in this industry print a range of materials except for newspapers.
J5411 Newspaper Publishing in Australia
Firms in this industry are primarily focused on printing and publishing newspapers.
J5413 Book Publishing in Australia
Businesses in this industry publish books, prints, maps, sheet music and telephone directories.
J5700 Internet Publishing and Broadcasting in Australia
Publishing magazines, other periodicals and directories exclusively on the internet are included in
this industry.
Additional Resources
For additional information on this industry
www.abs.gov.au
Australian Bureau of Statistics
www.magazines.org.au
Magazine Publishers of Australia
www.pneb.com.au
Publishers National Environment Bureau
www.publishersbureau.com.au
Publishers’ Advertising Advisory Bureau
Magazine and Directory Publishing in AustraliaJuly 2013 3
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Industry at a Glance
Magazine and Directory Publishing in 2013-14
Key Statistics
Snapshot
Revenue
Annual Growth 09-14
Annual Growth 14-19
Profit
Exports
Businesses
$3.1bn
-6.5%
-1.6%
$492.6m $50.8m 1,201
Consumer sentiment index
Revenue vs. employment growth
Telstra
Corporation
Limited 29.4%
% change
Bauer Media
Limited 22.2%
News Australia
Holdings Pty
Limited 2.8%
8
130
4
120
0
110
Index
Market Share
−4
100
−8
90
−12
−16
Year 06
08
10
12
Revenue
14
16
18
80
Year 05
20
07
09
11
13
15
17
19
Employment
SOURCE: WWW.IBISWORLD.COM.AU
p. 22
Establishments
4.3%
Key External Drivers
Consumer
sentiment index
5.9%
SA
1.3% 0.6%
ACT
0.5%
WA
Internet connections
Real household
disposable income
TAS
NT
41.9%
20.3%
Demand from newspaper
and book retailing
NSW
QLD
Total time available for
leisure and recreation
Demand from book and
magazine wholesaling
25.2%
VIC
p. 4
SOURCE:
WWW.IBISWORLD.COM.AU
SOURCE:
WWW.IBISWORLD.COM.AU
Industry Structure
Life Cycle Stage
Revenue Volatility
Decline
Medium
Regulation Level
Medium
Technology Change
Medium
Capital Intensity
Low
Barriers to Entry
Industry Assistance
Low
Industry Globalisation
Concentration Level
Medium
FOR ADDITIONAL STATISTICS AND TIME SERIES SEE THE APPENDIX ON PAGE 31
Competition Level
High
Medium
High
Magazine and Directory Publishing in AustraliaJuly 2013 4
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Industry Performance
Executive Summary | Key External Drivers | Current Performance
Industry Outlook | Life Cycle Stage
Executive
Summary
Magazines entertain and inform
consumers on particular areas of interest,
periodicals inform and educate readers
about specific topics and provide details
about related developments, and
directories and mailing lists help people
to find other people, organisations and
places. Magazines can also provide a
medium for readers’ aspirations, which
can also make them an attractive medium
for advertisers. Most directories tend to
rely on advertising for income, while
mailing lists are mainly sold to
businesses for their own advertising
campaigns. Therefore, the main final
markets for publishers are households
and businesses.
The Magazine and Directory Publishing
industry is expected to generate revenue
of $3.1 billion in 2013-14, down 4.7% for
the year. Industry revenue is expected to
decrease by an annualised 6.5% in the five
years through 2013-14 due to increased
competition from internet sources and
lower revenue streams from online
publications. Industry revenue is expected
to contract due to a weaker advertising
market and a drift away by readers and
advertisers from printed media to online
media, which the industry is having
difficulties taking advantage of.
Industry profit margins have come
under pressure due to the slump in
revenue over the past five years. The
industry has responded by introducing
online content that complements existing
printed publications and by deepening
their involvement in specific markets.
However, this has added another layer of
costs. Online profit margins tend to be
lower compared with print margins.
While this trend is expected to continue
in future years, publishers are unlikely to
develop robust strategies to take
advantage of increased online activity.
Industry revenue is forecast to
decrease by an annualised 1.6% in the
five years through 2018-19 to $2.8
billion, including a 2.3% decline in
2014-15. Slight improvements in
economic conditions and advertising
markets in Australia over much of the
next five years will benefit the industry.
Industry performance will continue to
be hampered by intense competition
from digital and competing media.
Nevertheless, the internet and digital
devices offer publishers opportunities
to retain and grow their combined
print and online readership, provide
value added content through
complementary content, podcasts,
blogs and analysis tools, and further
stratify their markets, all of which
could improve selling propositions to
both readers and advertisers.
Key External Drivers
Consumer sentiment index
Consumer sentiment influences retail
sales and, in turn, spending by retailers
and other businesses on advertising. In
addition, consumer sentiment is a factor
determining the amount spent by
consumers on magazines, which affects
demand for advertising in magazines.
Consumer sentiment is expected to
improve in 2013-14, which will provide
an opportunity for the industry to limit
expected revenue declines.
directories, but also provides
opportunities for publishers to build an
on-line presence. However, growth in the
popularity of the internet and the range of
products and services sold on the internet
is negatively impacting the industry
overall, and is a threat to revenue levels
for publishers. IBISWorld forecasts that
the number of internet connections in
Australia will increase in 2013-14.
Internet connections
The internet is offering products that
compete with printed magazines and
Real household disposable income
The level and rate of growth in household
incomes influence the amount spent on
magazines and magazine circulation, in
turn affecting demand for advertising in
Magazine and Directory Publishing in AustraliaJuly 2013 5
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Industry Performance
Key External Drivers
continued
magazines. With expected growth in
household income in 2013-14, this may
help to limit expected industry revenue
falls for the year.
Demand from newspaper
and book retailing
The availability of cost-effective
distribution channels, such as newsagents
and supermarkets, can increase exposure
of, and demand for, printed magazines
and directories. Printed magazines are
particularly reliant on copy sales through
retailers. However, demand from
newspaper and book retailers is expected
to decline in 2013-14.
Total time available for
leisure and recreation
Leisure and creation is highly correlated
to the amount of reading that the general
population engages in. The more time
that people have to devote to leisure and
recreation, the more time that people can
devote to reading magazines and browse
through a range of directories. Leisure
time in Australia is expected to only
increase slightly in 2013-14, benefitting
the industry.
Demand from book and
magazine wholesaling
The availability of cost-effective
distribution channels, including
wholesalers, newsagents, supermarkets
and bookstores, can increase magazine
exposure and demand, as well as increase
the level of sales for magazine and
directory publishers through ease of
purchase. However, demand from
magazine wholesalers is expected to
decline in 2013-14 due to a weaker market.
Real household disposable income
130
10
120
8
110
6
% change
Index
Consumer sentiment index
100
90
80
Year 05
4
2
07
09
11
13
15
17
19
0
Year
08
10
12
14
16
18
20
SOURCE: WWW.IBISWORLD.COM.AU
Current
Performance
The Magazine and Directory Publishing
industry is on a downward trend, with
revenue estimated to decrease by an
annualised 6.5% in the five years through
2013-14 to $3.1 billion. Revenue has
declined in every year over the five-year
period and is expected to drop by 4.7% in
2013-14. Migration of customers to
substitute products and services offered
via the internet will be the biggest factor
driving down industry revenue. Industry
profitability has declined over the past
five years, from 19.8% of industry
revenue in 2008-09 to an estimated
16.1% in 2013-14, largely due to a drop in
revenue and competitive pressures on
selling prices. Because of these
conditions, the number of firms
operating in the industry has declined,
while employee numbers have also fallen.
Magazine and Directory Publishing in AustraliaJuly 2013 6
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Industry Performance
Magazines and
periodicals
Directories and
mailing lists
Revenue generated by the magazine and
periodical segment is expected to
decrease by 4.5% per annum in the five
years through 2013-14. Segment profit
margins are expected to come under
pressure due to a slump in advertising
revenue and a decrease in circulations.
This will be partly offset by the influence
of efficiency and productivity gains. The
magazine publishing segment has
consolidated. Major players in Australia
have acquired businesses and formed
magazine joint ventures to shore up their
positions in niche markets.
Magazines and other periodicals have
an influence over their audience and can
inspire changes in society, technology,
systems and the economy. Consumer
magazines can influence societal and
political trends and consumer buying
behaviour. Professional and academic
periodicals can facilitate lifelong
learning and promote innovation in
particular sectors of the economy. They
also help people and organisations to
keep up with changes occurring in
technology and regulation, and with
social, government and business trends
and conditions. However, many
professional and academic periodicals
have migrated from print to the
internet. The ability of magazines and
other periodicals to inform readers
about niche areas of interest on a
regular basis, through both print and
online formats, has helped the industry
to grow. However, printed magazines
and periodicals face mounting
competition for both readers and
advertisers from other media streams,
such as TV, online content, competing
websites and blogs.
Advertising accounts for about 40% of
magazine and periodical revenue, although
the contribution made by advertising to
revenue varies by magazine and periodical
title. For some consumer magazines,
advertising accounts for up to 100% of
revenue. Advertising in all media including
magazines has been negatively affected by
weak levels of household discretionary
spending in Australia because of inflation
in some major expenditure items, such as
utilities, and an increase in household
savings. In addition, bricks-and-mortar
retailers, which form a major part of the
Australian advertising market, are also
suffering due to growth in online retail
sales. As a result, some retailers have cut
back on advertising.
Revenue generated by the directories and
mailing lists segment will decrease by
9.6% per annum in the five years through
2013-14. Sluggish retail spending
conditions have had adverse effects on
the demand for advertising in general,
including in directories. Directories
generate a significant percentage of their
advertising revenue from small
businesses, and many small businesses
have struggled over the five years through
2013-14. Directory users and advertisers
have migrated away from printed
directory products to solely online
products, which has been particularly
evident since 2010-11. While this trend
has promoted digital directory revenue, it
has adversely affected demand for higher
yielding printed directories, leading to
lower revenue and profit.
While the online advertising market is
growing strongly, directories are rapidly
losing market share to company websites,
online search engines such as Bing,
Google and Yahoo and online social and
business networking platforms such as
Facebook and LinkedIn. It is free to list a
business on Google and it is free for
individuals to list on Facebook and
LinkedIn. According to data published by
the Interactive Publishing Bureau of
Australia in August 2012, expenditure on
Weak
household
discretionary spending
has negatively affected
advertising
Magazine and Directory Publishing in AustraliaJuly 2013 7
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Industry Performance
Directories and
mailing lists
continued
search and directories in 2011-12, which
accounted for 52.3% of total online
advertising expenditure, increased by
30% year on year. At the same time,
Sensis directory revenue declined by
15.5%, with a large drop in print revenue
partially offset by an increase in online
directory revenue.
Weak levels of advertising spending
Industry
Outlook
Revenue within the Magazine and
Directory Publishing industry is forecast
to decrease an annualised 1.6% in the five
years through 2018-19 to $2.8 billion,
including a forecast 2.3% decrease in
2014-15. Customers will drift from print
to lower margin digital products, which
will also negatively affect industry
profitability. In addition, the industry will
face increasing competition from digitally
focused operators. The resulting drop in
industry activity will lead to decreases in
the number of industry enterprises and
employees. Operators in the industry
tend to be highly reliant on conditions in
the advertising market. The level of
economy-wide advertising expenditure in
Australia is sensitive to economic activity.
Growth in the Australian economy for the
next five years is expected to be slightly
higher than the five years through
2013-14, although economic conditions
are expected to be weak in 2017-18,
which will negatively affect the industry.
Online advertising is accounting for a
rising share of media advertising budgets.
More advertisers are finding and reaching
target audiences and niche markets
through digital devices such as tablet
computers and smartphones, enabled by
online social and business networks, such
as Facebook and LinkedIn, video-sharing
websites and internet-based marketplaces.
Nevertheless, digital devices and online
solutions offer publishers the opportunity
to retain and grow their print and online
readership, provide value added content,
such as complementary content, and
further stratify their markets, all of which
could improve selling propositions to both
readers and advertisers. The internet also
offers publishers a low-cost distribution
platform and the opportunity to provide
additional value to readers and users.
Business models should seek to ensure that
growth in profit from internet offerings is
not overwhelmed by any reduction in profit
earned by the print franchise.
The magazine publishing segment aims
to entertain, inspire and inform its
readers, and attempts to gain a loyal
following to develop long-term sales
trends. The extent to which the industry
fulfils these aims greatly influences the
readership and advertising activity for
magazines and periodicals, and ability of
publishers to retain readers. Large
companies are often better able to fund
diversification within markets and across
distribution platforms, which can provide
Magazine and
periodical publishing
have hampered demand for mailing
lists. Some large companies have
reduced direct marketing and increased
online advertising, such as keyword
searches and banner advertising. In
addition, the Privacy Act, the Do Not
Call Register Act 2006 and the Spam
Act 2003 have hampered growth in
direct marketing.
Industry revenue
8
% change
4
0
−4
−8
−12
−16
Year 06
08
10
12
14
16
18
20
SOURCE: WWW.IBISWORLD.COM.AU
Magazine and Directory Publishing in AustraliaJuly 2013 8
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Industry Performance
Magazine and
periodical publishing
continued
stronger selling propositions.
Consolidation within media industries
may make it difficult for some small
niche publishers to compete for retail
shelf space and advertising dollars.
Segment revenue is forecast to decrease
in the five years through 2018-19. In an
environment of weak revenue growth,
industry players are likely to concentrate
on expanding their markets, closely
examining the performance of titles and
reducing their costs. Non-performing titles
will be either revamped or quickly closed.
Players will seek to minimise risks
associated with the launch of new titles by
licensing successful foreign titles or
pursuing joint ventures with other players.
IBISWorld expects clearly focused
magazine operators serving specific and
complementary market segments to gain
an increasing share of advertising revenue.
Up-market and aspirational magazines will
do comparatively well. However, new titles
will need to be specific and attractive to a
niche audience to compete effectively with
established titles.
Directories
Printed directories will continue to face
strong competition from online
substitutes over the next five years.
Advertisers will migrate from higher
yielding printed directories to lower
yielding online directories and online
search products. The demand for
printed street directories has been
negatively affected by free online
products and by the availability of
satellite navigation products. Until
recently, small businesses have been
slow to respond to the uptake of digital
technology by their customers, but this
is changing as businesses realise the
increasing marketing benefits of an
online presence and strategy. Sensis, the
largest operator in the printed directory
market, aims to grow customer numbers
in the long term by selling a wider range
of products in the online space.
Sensis is facing increasing competition
from online search operators such as
Google and Yahoo, and companies that
operate solely online. In the short to
medium term, Sensis customer numbers
are expected to fall as some businesses
drop their print advertising without
taking up Sensis online products. Sensis
revenue has fallen significantly in recent
years, with further falls expected as the
migration to digital intensifies.
Despite challenges across the segment,
some directory businesses are building
their online offerings, which can be
offered to advertisers at a lower cost. As a
result, print yields will fall while digital
yields will increase over time. Online
directory publishers are also improving
the currency of information, such as
through real-time updating, and
providing additional value added
services, such as offering navigation
services, consumer targeting, social
media feeds, smartphone feeds and
performance reporting.
Magazine and Directory Publishing in AustraliaJuly 2013 9
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Industry Performance
Life Cycle Stage
Many periodical, magazine and directory
markets are at saturation level
Industry revenue and value
added continue to decline
The industry is facing considerable competition
from external online substitutes
% Growth in share of economy
There is some consolidation occurring
among industry players
20
Maturity
Quality Growth
Company
consolidation;
level of economic
importance stable
High growth in economic
importance; weaker companies
close down; developed
technology and markets
15
Key Features of a Decline Industry
Revenue grows slower than economy
Falling company numbers; large firms dominate
Little technology & process change
Declining per capita consumption of good
Stable & clearly segmented products & brands
10
Quantity Growth
Many new companies;
minor growth in economic
importance; substantial
technology change
5
0
Supermarkets and Grocery Stores
Convenience Stores
Pulp, Paper and Paperboard Manufacturing
-5
Printing
Decline
Shrinking economic
importance
Magazine and Directory Publishing
Newspaper Publishing
-10
-10
-5
0
5
10
15
20
% Growth in number of establishments
SOURCE: WWW.IBISWORLD.COM.AU
Magazine and Directory Publishing in AustraliaJuly 2013 10
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Industry Performance
Industry Life Cycle
This
industry
is D
eclining
The industry is considered to be in the
decline phase of its life cycle due to large
revenue, value added and profit falls in
recent years. Industry value added (IVA) is
expected to decrease by 4.7% per annum in
the 10 years through 2018-19, while the
Australian economy (GDP) is expected to
grow at an annualised 2.5%. This means
that the industry’s contribution to the
Australian economy continues to decrease.
The numbers of firms and employees in
the industry are falling. There have been
several mergers and acquisitions in the
industry over recent years, and this trend
is expected to continue in the five years
through 2018-19.
There is also extensive market
saturation in key product segments.
Australia has a large number of consumer
magazine titles and has the highest per
capita magazine readership in the world.
Furthermore, Australia is well served by
printed and online directories. The per
capita circulation of major older
consumer magazine titles have declined
over the long term, particularly in the
women’s segment, such as Australian
Women’s Weekly and Woman’s Day.
Revenue of digital magazines and
periodicals is increasing, but often at the
expense of higher-margin print
periodicals. In addition, competing
online advertising sites, information sites
such as Wikipedia and social sites such as
Facebook and Twitter, will adversely
affect growth in some printed periodical
markets. The printed directory market is
coming under attack from online
directories and search engines, which are
negatively affecting the industry.
WWW.IBISWORLD.COM.AU
Magazine and Directory Publishing in Australia July 2013 11
Products & Markets
Supply Chain | Products & Services | Demand Determinants
Major Markets | International Trade | Business Locations
Supply Chain
KEY BUYING INDUSTRIES
G4111
Supermarkets and Grocery Stores in Australia
Supermarkets and grocery stores are major distribution channels for consumer magazines.
G4112
Convenience Stores in Australia
Convenience stores, including those located at petrol station outlets, represent a major
distribution channel for consumer magazines.
G4244
Newspaper and Book Retailing in Australia
Newspaper, book and stationery retailers represent a major distribution channel for consumer
magazines and some directories.
M6942
Media Buying Agencies in Australia
Media buying agencies are a major purchaser of advertising space in magazines
and directories.
KEY SELLING INDUSTRIES
Products & Services
C1510
Pulp, Paper and Paperboard Manufacturing in Australia
Paper is a major input in the production of printed magazines and periodicals and directories.
C1916
Paint and Coatings Manufacturing in Australia
Paint and coatings manufacturers sell raw materials to this industry.
F3735
Book and Magazine Wholesaling in Australia
Magazine and periodical wholesalers represent a distribution platform for publishers.
F3736
Paper Product Wholesaling in Australia
Paper is a major input in the production of printed magazines and periodicals and directories.
The main products supplied by the
industry are telephone directories,
women’s magazines, other magazines
and periodicals, mailing lists, and
other directories.
Telephone directories
Telephone directories are estimated to
account for 34.0% of industry revenue in
2013-14, down from 40.0% in 2008-09,
and with further falls expected in the five
years through 2018-19. Internet search
engines are negatively affecting demand
for printed directories, and associated
advertising in these publications. In
addition, websites, email and social and
business networking sites offer alternative
ways to locate and connect with people
and businesses. Sensis dominates this
product segment, and will continue to
account for a high proportion of revenue
in future years despite anticipated large
falls in company revenue.
Women’s magazines
Women’s magazines are the main
product segment for magazines and
periodicals, accounting for an estimated
34.0% of industry revenue in 2013-14.
These publications aim to entertain and
inform, and they can be segmented by
content type and their method of
dissemination, such as print or online.
In terms of circulation, the major
product categories are women’s
weeklies, fashion, food and special
interest magazines. Despite its size, the
women’s magazine category has suffered
a long-term decline in circulation. There
has been an evolving change in women’s
interests away from family-type issues
towards coverage of celebrities and
personal growth topics, such as
professional, finance and health issues.
In addition, weakness in discretionary
spending has affected sales of women’s
magazines over the past few years.
Other magazines and periodicals
Within the other magazine and
periodicals segment, these are estimated
to be divided evenly between men’s
magazines and other magazines, such as
science, professional, finance,
WWW.IBISWORLD.COM.AU
Magazine and Directory Publishing in Australia July 2013 12
Products & Markets
Products & Services
continued
architecture, business, children’s and
general interest, with large changes in
popular topics from year to year. This
segment is estimated to account for
29.0% of industry revenue in 2013-14.
platforms to connect with people and
businesses, as well as by the growing
availability of data obtained via the
internet. Privacy legislation has restricted
the gathering and use of information.
Mailing lists
Mailing lists, which are estimated to
account for 3.0% of industry revenue in
2013-14, are mainly produced to assist
businesses with their direct marketing
campaigns. The segment has been
negatively affected by the growing use of
the internet and online networking
Other directories
Other directories include business
directories, street directories and event
directories. This segment is estimated to
account for just 3.0% of industry revenue
in 2013-14, with the majority of this
received from circulation sales, rather
than advertising.
Products and services segmentation (2013-14)
3%
Mailing lists
3%
Other directories
29%
Other magazines and periodicals
34%
Telephone directories
31%
Women's magazines
Total $3.1bn
Demand
Determinants
Various factors influence demand for
magazines, periodicals and directories.
Magazines and periodicals
The factors that determine demand for
magazines and periodicals vary by
revenue source, such as copy sales,
subscriptions and advertising sales, and
by product segment. Broadly, periodical
subscriber and sales numbers are
affected by the perceived value and cost
of entertainment and the information
offered by periodicals, relative to that
offered by other media. Advertisers
compare various media, which includes
periodicals, to determine the best way to
reach and affect their targeted audiences
at an acceptable cost.
SOURCE: WWW.IBISWORLD.COM.AU
An ability to reach and target niche
markets is one of the strengths of
magazines and periodicals, compared
with mass media products, such as daily
newspapers. Nevertheless, the internet,
direct mail, TV and smartphones can also
reach specific target markets. The
internet, for example, can reduce both
printed periodical circulation volumes
and advertising revenue. Periodical
publishers are responding by deepening
their involvement in specific markets,
such as food and fashion, and by
releasing digital versions of publications
and complimentary websites.
Economic conditions can affect both
sales of magazines and periodicals and
advertising space in periodicals.
WWW.IBISWORLD.COM.AU
Magazine and Directory Publishing in Australia July 2013 13
Products & Markets
Demand
Determinants
continued
Major Markets
Household expenditure on magazines is
greater among higher income earners.
Advertising spending in Australia,
whether in magazines and periodicals or
in other media, is very sensitive to
economic conditions. Government or
political information dissemination
programs can also affect economy-wide
advertising spending.
Economic, demographic and societal
changes can affect demand for media
products, including periodicals. For
example, shifts in the Australian
economy away from manufacturing, and
changes in the level of participation in
post-school education, can affect demand
for specific types of technical and
professional periodicals. Younger people
are relatively heavy users of the internet.
Advertisers often focus on age groups
that are higher spenders, and will be
attracted by media that best reaches
these markets. Household activities and
interests can change over time, resulting
in a change in the type of entertainment
and information sought. For example,
households have recently shown a greater
interest in home cooking as a result of an
interest in a wider range of foods, higher
costs of eating out, health and
environmental concerns about packaged
foods, and the release of food-related
television series, such as MasterChef and
My Kitchen Rules.
The availability of cost-effective
distribution channels, such as
newsagents and supermarkets, can
increase exposure and magazine demand.
Magazine supplements are also now
regularly included in newspapers. Links
with other complimentary media,
including TV, the internet and
smartphones, can also promote demand.
For example, magazines have been
spun-off from popular TV programs.
The major markets in the industry are
media buyers and other companies that
advertise their products and services;
wholesalers that resell magazines and
other industry products to retailers; and
other sectors.
businesses of other information in an
attempt to maintain or increase sales.
Also included in this market segment are
companies listing themselves in
directories, such as the Yellow Pages.
Directories generate almost all of their
revenue from advertising. Practically all
industries advertise in directories. Major
market segments for directories include
business services and construction
trades. Sensis, which dominates the
Australian telephone directory market,
provides advertising, commercial search,
information management, mapping and
IT solutions to about 600,000
businesses, with about 150,000 of these
businesses also being online customers.
Media buyers and advertising businesses
Media buyers purchase advertising in
magazines, periodicals and directories on
behalf of other businesses. These
companies are used, as they are generally
able to purchase advertising space at a
more competitive rate. Other companies
also advertise in magazines and
directories to promote products and
services, and to notify consumers and
Directories
Economic conditions affect economywide advertising and demand for
telephone directory advertising.
Directories have a heavy reliance on
advertising by the small and medium
business sector, and this sector’s spending
on advertising can fluctuate with changes
in economic and business conditions.
The demand for advertising in
telephone directories is also sensitive to
price, particularly in view of the reliance
on advertising by small business. Printed
directory advertising is facing increasing
competition from online substitutes.
Sensis, the major player in the telephone
directory market, plans to grow its
electronic directory businesses, and this is
expected to at least partially offset slower
growth in printed directory revenue.
WWW.IBISWORLD.COM.AU
Magazine and Directory Publishing in Australia July 2013 14
Products & Markets
Major Markets
continued
IBISWorld estimates this segment to
account for 60.0% of industry revenue in
2013-14, down from 70.0% in 2008-09
due to lower directory listing revenue.
Wholesalers to retailers
Most magazine publishers use distributors
such as Gordon & Gotch (owned by PMP
Ltd) and Network Services (owned by
ACP) to maximise sales and reduce
wastage. Magazines from Gordon & Gotch
are supplied to retailers on a sale or return
basis, unless otherwise stated. Gordon and
Gotch sells copies to retailers at a
commission off the recommended retail
price, or cover price. Copies that are not
sold by the retailer may be returned for
credit to the retailer’s account in the
month in which they are recalled.
Magazine distributors have warehouses
where publications are efficiently picked
and packed for retailers in particular
areas. Distributors assess industry trends,
seeking to optimise allocations to retailers
and providing market knowledge to
publishing clients. In 2009, the Australian
Competition and Consumer Commission
authorised newsagents to engage in
collective bargaining with the major
publishers and distributors of magazines
and newspapers.
Other
The other market segment for the
industry’s products includes direct sales
to retailers, educational institutions,
subscriptions, government and other
sectors. Some magazines are sold directly
to retailers, such as newsagents,
supermarkets, bookstores, convenience
stores and other retailers. The education
sector is a major market for academic and
scientific periodicals. University libraries
are estimated to spend about $220
million per year on content, with about
80% of this being spent on periodicals, of
which a significant proportion are
published overseas. Some universities are
entering into joint purchase agreements
with other universities.
Major market segmentation (2013-14)
4%
Educational sector
10%
Other
23%
Wholesalers to retailers
Total $3.1bn
3%
Direct to retailers
60%
Media buyers and
advertising businesses
SOURCE: WWW.IBISWORLD.COM.AU
WWW.IBISWORLD.COM.AU
Magazine and Directory Publishing in Australia July 2013 15
Products & Markets
Level & Trend
xports in the
E
industry are L ow
and S
teady
Imports
in the
industry are
Mediumand
Decreasing
Overall, there is a low level of
international trade in this industry. There
is practically no foreign trade in printed
directories. However, international trade
is significant in some areas, including
professional and scholarly journals;
consumer magazines dealing with world
issues and those of interest to ethnic
communities in Australia; and the
licensing of brands and content between
local and overseas publishers.
The Australian consumer magazine
market is competitive. Some foreignowned consumer magazine titles are
published in Australia under licence or
joint venture, and this has had a negative
effect on imports. The value of magazine
and periodical imports is forecast to
amount to $190.5 million in 2013-14,
representing 6.0% of domestic demand
for magazines and periodicals for the
year. However, the value of competing
imports is forecast to decline an
annualised 2.3% in the five years through
2013-14 due to higher online foreign
content being available. The major
sources of imports are the United
Kingdom (estimated at two-thirds of
imports by value), the United States
(20.0%) and Singapore (8.0%).
The value of industry exports is
Industry trade balance
200
100
$ million
International Trade
0
−100
−200
−300
−400
Year 06
Exports
08
10
12
Imports
14
16
18
20
Balance
SOURCE: WWW.IBISWORLD.COM.AU
estimated to total $50.8 million in
2013-14 and account for 1.7% of revenue
from the sale of magazines and
periodicals. In addition to exports of
physical magazines, Australian
publishers also licence their titles to
overseas publishers. In 2010, Pacific
Magazines sold a licence to APN News &
Media Limited to publish three
magazines in New Zealand. The value of
exports is forecast to increase 0.2% per
annum in the five years through 2013-14.
Major export markets by value are New
Zealand, estimated at three-quarters of
exports, and Singapore (7.0%).
Magazine and Directory Publishing in AustraliaJuly 2013 16
WWW.IBISWORLD.COM.AU
Products & Markets
Business Locations 2013-14
NT
1.0
QLD
16.2
WA
6.5
SA
4.2
NSW
43.5
ACT
1.6
VIC
25.9
Revenue (%)
Cold Zone (<10)
<25
<50
Hot Zone (<100)
Not applicable
TAS
1.1
SOURCE: WWW.IBISWORLD.COM.AU
Magazine and Directory Publishing in AustraliaJuly 2013 17
WWW.IBISWORLD.COM.AU
Products & Markets
Factors influencing the location of the
industry’s activities include the
distribution and concentration Australia’s
population; economic activity; the
entertainment, fashion and advertising
industries; and the head offices of major
companies in the consumer goods
industries. This explains why New South
Wales, particularly Sydney, accounts for a
significant share of industry activity, with
an estimated 41.9% of industry
establishments in 2013-14 and 43.5% of
industry revenue. The higher percentage
of revenue is due to the extensive
Distribution of revenue vs. population
distribution network of the major
magazine publishers across Australia.
Victoria and Queensland are also
major regions for industry activity.
Victoria is prominent due to the high
proportion of magazine publishers in the
state, and accounts for a high percentage
of revenue due to the large market for
magazines. While Queensland has a large
number of publishers across a large
region, revenue applicable to the state is
estimated to be lower due to fewer
magazine sales and the smaller-size
publishing firms.
Distribution of revenue vs. establishments
50
40
40
Revenue
Revenue
Population
Establishments
WA
VIC
TAS
ACT
WA
VIC
TAS
SA
0
QLD
0
NT
10
NSW
10
SA
20
QLD
20
30
NT
30
NSW
Percentage
50
ACT
Percentage
Business Locations
SOURCE: WWW.IBISWORLD.COM.AU
Magazine and Directory Publishing in AustraliaJuly 2013 18
WWW.IBISWORLD.COM.AU
Competitive Landscape
Market Share Concentration | Key Success Factors | Cost Structure Benchmarks
Basis of Competition | Barriers to Entry | Industry Globalisation
Market Share
Concentration
Level
Concentration in this
industry is M
edium
Key Success Factors
IBISWorld
identifies
250 Key Success
Factors for a
business. The most
important for this
industry are:
The four largest companies operating in
the industry are estimated to account for
64.5% of industry revenue in 2013-14,
with the eight largest estimated to make
up for 71.1% of industry revenue for the
year. Industry concentration has
decreased in the five years through
2008-09 when the four largest firms
accounted for 79.3% of industry revenue.
This decline has been due to Sensis losing
a significant proportion of market share
in the directories segment, which has a
higher concentration level compared to
magazines, while the number of firms
exiting or merging within the industry
decreased at a slower rate than industry
revenue fell.
Despite these recent concentration
declines, slower industry revenue falls
forecast in future years are expected to
result in industry concentration increasing
in future years, particularly in the
magazine segment. This will be due to
increased industry consolidation, with
merger activity likely to increase as the
larger firms in the industry look to
increase market share. There are a large
number of well-known and popular
magazines that are owned by smaller
firms in the industry, which are expected
to be targeted by bigger rivals, providing
considerable pay-offs for the selling firms.
Access to highly skilled workforce
Access to labour skilled in journalism,
editorial and advertising is important
for producing high-quality magazines
and periodicals.
newsagents and retailers can help drive
circulation sales and readership levels
for magazines.
Establishment of brand names
Brand promotion can bolster readership
and advertising rates.
Effective cost controls
It is important for magazine publishers to
maintain control over input costs such as
journalistic, printing, distribution and
promotional expenses.
Control of distribution arrangements
Extensive distribution networks across
Cost Structure
Benchmarks
The industry cost structure varies
significantly between the main product
segments of magazines and directories,
and by firm size. Larger companies
benefit from economies of scale and
higher circulation levels, while smaller
firms can benefit from tighter cost
controls and volume flexibility.
Profit
Profit margins are relatively high in the
industry, at an estimated 16.1% of
Access to niche markets
It is important to have a strong
understanding of the market being
addressed, to position publications to
promote an increase in readership and
circulation, and to win advertisers.
Production of premium goods/services
The quality of product (for example of
paper, print and pictorial matter to
attract readers and advertisers) is
essential to bolster average selling
prices (such as cover prices and
advertising rates).
industry revenue in 2013-14. However,
margins have decreased over the past five
years due to weak revenue and growing
competition from online-only substitutes.
Margins are higher in the directory
business compared with the magazine
and periodical business due to a high
level of concentration in the directory
market. Industry profit is down from
19.8% in 2008-09 on lower circulation
and revenue levels, and is expected to
decrease to 15.7% in 2018-19 due to lower
Magazine and Directory Publishing in AustraliaJuly 2013 19
WWW.IBISWORLD.COM.AU
Competitive Landscape
advertising revenue, sales and higher
wage levels.
Wages
IBISWorld estimates total industry wages
to account for 26.6% of industry revenue
in 2013-14, up from 25.7% in 2008-09.
Wage costs have risen as a percentage of
revenue in recent years due to an
increase in general wage rates across the
economy and a strong focus on content in
magazines. Industry wages have declined
at a slower rate than industry revenue
over the five years through 2013-14, and
are expected to increase in the next five
years through 201819 to 26.9% of
industry revenue.
Material costs
The composition of material costs varies
considerably between publications,
depending on a number of factors.
However, printing expenses are the
major material cost. In the magazine
segment, higher quality printing papers
incorporating fillers or coatings have
increasingly been used. Magazine
publishers have been tough in their
negotiations with printers to reduce
printing costs. In the past, ACP
Magazines has stated that a proposed
move to an in-house printing operation
(which did not eventuate) would produce
a significant lift in ACP’s earnings by
improving efficiencies and reducing costs
in areas such as freight. However,
printing costs are dropping in the
directory market as directories move
online. Sensis has reduced the range, size
and circulation of its printed directories.
In August 2012, Sensis announced plans
to extend an ‘opt-in’ system for the
printed White Pages residential directory.
Other costs
Mailing and distribution costs, such as
deliveries to subscribers, retailers and
newsagents, are estimated to account for
5.8% of industry revenue. Two main
companies in Australia distribute
magazines to newsagents and other
retailers. Larger publishers are in a
relatively good position to negotiate better
rates with distributors. Directory mailing
Sector vs. Industry Costs
Average Costs of
all Industries in
sector (2013-14)
100
80
Percentage of revenue
Cost Structure
Benchmarks
continued
Industry Costs
(2013-14)
13.6
2.6
1.1
12.4
60
42.9
16.1
2.1
2.1
8.5
1.7
■ Profit
■ Rent
■ Utilities
■ Depreciation
■ Other
■ Wages
■ Purchases
26.6
40
20
0
15.7
42.9
11.7
SOURCE: WWW.IBISWORLD.COM.AU
Magazine and Directory Publishing in AustraliaJuly 2013 20
WWW.IBISWORLD.COM.AU
Competitive Landscape
Cost Structure
Benchmarks
continued
and distribution costs are falling due
largely to a shift towards online directory
products. Costs for printed publications are
usually higher than for online publications
due to the presence of paper, printing and
distribution costs. Cost structures for
printed publications vary considerably and
are influenced by circulation numbers and
type of circulation, target market, revenue
mix, journalistic and information
production costs, the extent of outsourcing
of content production, and print quality.
Basis of Competition
Magazine and periodical publishers
compete for readers and advertisers
among themselves as well as with other
media. The extent of competition with
other media depends on the content and
target market of the publication. As an
example, business magazines, such as
BRW and Money compete with business
newspapers, such as The Australian
Financial Review, as well as with the
business sections of general newspapers.
Publishers generally compete to maximise
circulation of their publications to
generate income from sales and to attract
advertisers and thereby generate
advertising income. The basis upon which
publishers compete to sell publications
include pricing levels, the provision of
informative, attractive and entertaining
content to a well-defined market niche or
demographic, and the promotion and
marketing of the publication.
In addition to maximising circulation
and targeting selected reader audiences,
periodicals compete for advertising
principally on the basis of circulation,
readership, advertising rates, target
markets, sales team effectiveness and
flexibility. Larger operators, such as ACP
Magazines and Pacific Magazines, are able
to offer advertising packages across a large
number of magazines that target varying
market segments. Some media operators
believe there are synergies in offering
advertisers exposure across various types
of media, either through directly owned
vehicles or alliance partners.
Directories tend to compete on the
basis of reach, convenience, effectiveness
and price. Printed directories reliant on
advertising revenue compete with other
advertising mediums, such as online
directories, search engines and
newspapers. The ability to distribute
directory products at an economic cost
can also enhance sales and profitability.
Level & Trend
ompetition
C
in
this industry is
Highand the trend
is I ncreasing
Barriers to Entry
Level & Trend
arriers to Entry
B
in this industry
are H
ighand
Increasing
The consumer magazine market is highly
saturated due to the large number of
publications available across a wide range
of topics. However, niche opportunities
continue to be available across subject
and topic areas for magazine, due to a
process of fragmentation within the
market where major titles have lost
market share. Nevertheless, new
launches are generally dominated by the
major publishers. Sensis dominates the
printed telephone directory market, but
faces competition from internet operators
including powerful search engine
companies such as Google and Yahoo.
Large established companies benefit
from economies of scale and scope. For
example, large operators can negotiate
Barriers to Entry checklist
Competition
Concentration
Life Cycle Stage
Capital Intensity
Technology Change
Regulation & Policy
Industry Assistance
Level
High
Medium
Decline
Low
Medium
Medium
Low
SOURCE: WWW.IBISWORLD.COM.AU
lower paper and printing costs. In
addition, they have wide distribution
channels and more control over
distribution channels and costs. They are
also better able to invest in deepening their
involvement in lucrative niche markets
Magazine and Directory Publishing in AustraliaJuly 2013 21
WWW.IBISWORLD.COM.AU
Competitive Landscape
Barriers to Entry
continued
and to provide advertising packages over a
wider range of magazines. Larger
operators can defray the cost of
introducing new products over a larger
revenue base. In the magazine market,
diversified media groups can leverage off
other media, such as spinning magazines
off TV programs, running complementary
websites and selling advertising packages
across various media platforms.
Industry
Globalisation
The industry has a medium globalisation
level, with a high globalisation level in
the magazine and periodical segment
offset by a low level of globalisation in the
directories segment. Globalisation in the
magazine and periodical segment
increased significantly in October 2012
following the acquisition of ACP
Magazines Ltd by the Germany-based
Bauer Media Group. ACP Magazines Ltd
also has significant magazine interests
outside Australia, including in New
Zealand and Asia, which also increases
industry globalisation.
Some foreign-owned magazine titles
are published in Australia under licence or
joint venture. For example, ACP has joint
ventures with The Hearst Corporation (a
US company), Northern & Shell Pacific
Ltd (a UK company) and BBC Magazines
(a UK business) to publish certain titles in
Australia. ACP and Hearst jointly publish
Grazia in Australia, under license from the
Italian publisher Mondadori. Pacific
Magazines and Rodale International (a US
company) have agreements for Pacific
Magazines to publish certain titles, while
News Australia has agreements with
Conde Nast (a US company) to publish
certain titles.
International trade is a
major determinant of
an industry’s level of
globalisation.
Exports offer growth
opportunities for firms.
However there are legal,
economic and political risks
associated with dealing in
foreign countries.
Import competition can
bring a greater risk for
companies as foreign
producers satisfy domestic
demand that local firms
would otherwise supply.
Trade Globalisation
200
Going Global: Magazine and Directory
Publishing 2003-2013
Global
Export
150
100
50
Magazine and
Directory Publishing
0 Local
0
Import
40
80
120
Imports/Domestic Demand
200 Export
Exports/Revenue
in
this industry is
Mediumand the
trend is I ncreasing
Exports/Revenue
Level & Trend
lobalisation
G
160
Global
150
100
50
2013
2003
0 Local
0
40
Import
80
120
160
Imports/Domestic Demand
SOURCE: WWW.IBISWORLD.COM.AU
Magazine and Directory Publishing in AustraliaJuly 2013 22
WWW.IBISWORLD.COM.AU
Major Companies
Telstra Corporation Limited | Bauer Media Limited | Seven West Media Limited
Fairfax Media Limited | News Australia Holdings Pty Limited | Other Companies
Major players
Fairfax Media Limited 4.8%
Bauer Media Limited 22.2%
(Market share)
32.7%
Other
Seven West Media Limited 8.1%
News Australia Holdings Pty Limited 2.8%
Player Performance
Telstra Corporation
Limited
Market share: 29.4%
Industry Brand Names
Sensis Pty Ltd
White Pages
Yellow Pages
Telstra Corporation Limited 29.4%
Sensis Pty Ltd, a subsidiary of Telstra
Corporation Ltd, is a local search and
directories business that principally
generates revenue from directory
publishing and advertising. As at mid2013, Sensis had about 2,000 employees
in Australia. It produces and delivers
almost 20 million printed directories per
year to households and businesses
around Australia, outsourcing printing of
the directories to PMP Ltd. The
company’s White Pages directory
provides the telephone number and
address information of residences,
businesses, non-profit organisations and
governments, while the company’s Yellow
Pages directory provides the telephone
number, address and marketing
information of businesses, non-profit
organisations and governments. From
2011, Sensis also published a new
compact-size Yellow Pages directory.
The company has expanded through
acquisition, particularly in classified
advertising, in both Australia and China.
In Australia, Sensis now focuses on
Sensis – industry segment
performance*
Revenue
($ million)
(% change)
2007-08
1,730
N/C
2008-09
1,740
0.6
2009-10
1,600
-8.0
2010-11
1,425
-10.9
2011-12
1,135
-20.4
2012-13
940
-17.2
Year
*Includes published and online White Pages and Yellow Pages
SOURCE: IBISWORLD
SOURCE: WWW.IBISWORLD.COM.AU
Sensis – financial performance
Revenue
($ million)
(% change)
2007-08
2,037
N/C
2008-09
2,067
1.5
2009-10
1,947
-5.8
2010-11
1,804
-7.3
2011-12
1,513
-16.1
Year
SOURCE: COMPANY WEBSITE
expanding electronic delivery and
emerging businesses, such as location
and navigation, and online displays. In
January 2013, Sensis announced the
acquisition of Australian Local Search
Pty Ltd, which was a subsidiary of News
Ltd and trades as TrueLocal, subject to
approval by the ACCC. TrueLocal
operates an online directory of
Australian businesses.
Financial performance
IBISWorld estimates that Sensis’ total
directory revenue decreased at a nominal
annualised 11.5% in the five years
through 2012-13, which is a larger decline
than the industry nominal average of
4.7%, or 6.5% in real terms. Following
large revenue declines in previous years,
and according to company results for the
half-year ending December 2012,
industry-specific revenue for 2012-13 is
estimated to decline to $940.0 million for
the year. Revenue in 2011-12 was down
significantly due largely to a decline in
Yellow Pages print revenue mainly
because of the migration of customers
from print products to digital, resulting
in lower advertising levels. Profitability in
Magazine and Directory Publishing in AustraliaJuly 2013 23
WWW.IBISWORLD.COM.AU
Major Companies
Player Performance
continued
2011-12 was adversely affected by upfront costs of implementing the threeyear digital strategy.
Over the past five years, Yellow Pages
revenue is estimated to have decreased
by over 10.0% annually, while White
Pages revenue is estimated to have
declined at a much lower rate. Published
Yellow Pages revenue, which is estimated
Player Performance
In October 2012, Bauer Media
Group acquired ACP Magazines Limited
from Nine Entertainment Co. Holdings
Pty Limited. The Bauer Media Group is
a family-run magazine publishing
group, which generated revenue of
about $2.8 billion (€2.2 billion) in 2012,
with over 11,000 employees in 16
countries across Europe, the United
States and Asia-Pacific.
Bauer publishes 80 magazines in
Australia, with sales of nearly 85
million copies in 2012-13 from a
leading share of consumer publications.
Of these 80 magazines, half are also
published online. With 1.9 million
readers each month as at March 2013,
the company’s Australian Women’s
Weekly title reaches more people than
any other magazine in the country.
Bauer Media also claims that it holds
two-thirds of gross readership for
women’s lifestyle titles. It also has
strong shares in special interest
categories and holds a dominant share
in the motoring magazine market.
Bauer Media’s Trader Group publishes
16 niche classified magazines for
boating, motoring, caravans, machinery
and leisure content. Bauer Media
contracts out the printing function of
all its Australian magazines, with joint
ventures to publish a number of
magazines in Australia and overseas.
Bauer Magazines also acts as a
distributor of magazines, using
specialised software to records its
magazine title sales at newsagents.
Bauer Media
Limited
Market share: 22.2%
Industry Brand Names
The Australian Women’s
Weekly
Woman’s Day
Cosmopolitan
Shop Til You Drop
Dolly
Empire
House & Garden
Money
Top Gear
NW
at more than half of company revenue in
2012-13, has been adversely affected by
higher advertising cancellations and
migration of advertising customers from
print to lower yielding online products.
There has also been a shift among White
Pages customers towards online
products, but with more consistent
revenue flows.
Bauer Media – industry segment
performance*
Revenue
($ million)
(% change)
2007-08
860
N/C
2008-09
830
-3.5
2009-10
815
-1.8
2010-11
770
-5.5
2011-12
727
-5.6
2012-13**
700
-3.7
Year
*Includes performance of ACP Magazines under previous ownership
**Estimate
SOURCE: IBISWORLD
Financial performance
In the five years through 2012-13, Bauer
Media and the former ACP Magazines’
combined revenue is expected to decline
an annualised 4.0% to $700.0 million,
which is smaller than the nominal
industry average of 4.7% per annum (or
6.5% in real terms). These declines have
been due to a fall in circulation levels and
weak advertising markets. Prior to the
sale of ACP Magazines Ltd, the previous
owner made significant writedowns to
the company’s assets. For 2010-11, Nine
Entertainment Co. (renamed from PBL
Media) reported an impairment loss on
ACP’s goodwill of about $600 million.
For 2009-10, PBL Media reported an
impairment loss on ACP’s mastheads and
licences of $503 million, which followed
an impairment loss of $455 million on
magazine mastheads
Magazine and Directory Publishing in AustraliaJuly 2013 24
WWW.IBISWORLD.COM.AU
Major Companies
Player Performance
Seven West Media
Limited
Market share: 8.1%
Industry Brand Names
Pacific Magazines
Better Homes and
Gardens
In Style
Marie Claire
New Idea
Men’s Health
Who
Girlfriend
Home Beautiful
Family Circle
Pacific Magazines is owned by Seven
West Media Limited. In early 2011, West
Australian Newspapers Ltd acquired
Seven Media Group for about $4.1 billion
from Seven Group Holdings Ltd and
funds associated with Kohlberg Kravis
Roberts & Co. West Australian
Newspapers was later renamed Seven
West Media Limited. In 2006, Seven
Network Ltd formed a joint venture with
Kohlberg Kravis Roberts & Co. (a private
equity company), called Seven Media
Group, to own and manage Seven’s TV
channel, Pacific Magazines and Yahoo!7
online partnership. Seven Network Ltd
kept its other investments, a stake in
West Australian Newspapers, property
holdings and pay-TV rights to the AFL. In
2009-10, Seven Group Holdings Ltd was
created following the merger of Seven
Network Ltd and WesTrac.
Pacific Magazines is the second-largest
magazine publisher in Australia. Its
portfolio includes more than 25
magazines that together account for
about 28% of gross readership of the
Australian consumer magazine market
and 27% of total magazine advertising
revenue. Annual sales are about 57
million copies. The business publishes
titles in the women’s, entertainment,
youth, lifestyle and special interest
markets in Australia, New Zealand and
Europe. It has strong circulation market
shares in several niche markets including
health, men’s lifestyle, youth, women’s
weeklies, home and garden, and fashion.
The business has partnerships with
several overseas magazine publishers
including Meredith, Rodale, Time Inc.
and Groupe Marie Claire. Pacific
Magazines also has a custom magazine
publishing operation and is estimated to
be a market leader based on the number
of titles published (producing more than
45 magazine titles). Magazines vary from
weekly and monthly titles to one-off
publications for corporate clients.
The company has built up its magazine
interests through several acquisitions and
magazine launches. In March 2011, Pacific
Magazines teamed up with public
broadcaster SBS to produce a new monthly
food magazine, Feast. In September 2009,
the company launched a new healthy
lifestyle title, Prevention. This was the first
Australian magazine dedicated to women
aged over 40 years. In June 2007, Pacific
Magazines paid about $100 million to
acquire four Australian magazines from
Time Inc., while in July 2004, Seven
Network acquired Murdoch Magazines
for $77 million.
Financial performance
In the five years through 2012-13,
company revenue is expected to decline
an annualised 4.1% to $260.0 million due
to falls in circulation levels, weak
advertising markets and lower demand
for custom publications. Pacific
Magazines faced tough market conditions
in 2011-12 because of weak retail and
consumer spending. Pacific Magazine’s
circulation revenue declined by 1.2%,
while advertising revenue was down
Pacific Magazines – financial performance
Revenue
($ million)
(% change)
Operating Profit
($ million)
(% change)
2007-08
321
N/C
53.0
N/C
2008-09
318
-0.9
46.8
-11.7
2009-10
319
0.3
43.7
-6.6
2010-11
305
-4.4
48.5
11.0
2011-12
287
-5.9
39.8
-17.9
2012-13*
260
-9.4
30.0
-24.6
Year
*Estimate
SOURCE: ANNUAL REPORT AND IBISWORLD
Magazine and Directory Publishing in AustraliaJuly 2013 25
WWW.IBISWORLD.COM.AU
Major Companies
Player Performance
continued
11.0%. However, the company managed
to reduce costs, which helped to prop up
profit margins. Pacific Magazines posted
lower revenue in 2010-11 due to weak
market conditions and despite gains in
advertising and circulation market
shares. However, profit margins
increased due to cost reduction
Player Performance
Fairfax Media Limited is an Australian
publicly listed company that publishes
newspapers and magazines in Australia
and New Zealand, and has online
businesses. The company also has a
44.7% ownership interest in news agency
AAP Information Services Pty Ltd. The
Financial Review Group publishes several
business magazines, such as BRW and
CIO Asia. Fairfax Media has grown
significantly and diversified its portfolio
of businesses, mainly through acquiring
newspaper and internet businesses and
broadcasting.
In Australia, Fairfax Media’s magazine
assets are classified as general magazines
(about eight titles including newspaper
inserts), Fairfax Business Media (about
18 titles) and agricultural magazines. In
August 2006, it was announced that
Fairfax Business Media had concluded an
extensive IT publishing relationship in
the Asia-Pacific region with International
Data Group (IDG). The relationship
involved Fairfax licensing IDG’s global IT
content and mastheads for the Singapore,
Malaysia and New Zealand markets and
acquiring IDG’s publishing assets in
those markets.
Fairfax Media
Limited
Market share: 4.8%
Industry Brand Names
Good Weekend
Sunday Life
the(melbourne)magazine
the(sydney)magazine
BRW
The Australian Financial
Review Magazine
Financial Review BOSS
CIO Asia
Financial performance
In 2011-12, Fairfax Media generated
revenue of $2.75 billion, including $1.13
initiatives. In 2009-10, Pacific Magazines
reported that circulation revenue
accounted for 61.1% of total revenue,
while advertising accounted for 34.5%
and other revenue 4.4%. The company
also reported that its share of gross
copies of magazines sold in Australia
increased to 29.8%.
Fairfax Media Limited (magazine
business) – industry related
performance*
Revenue
($ million)
(% change)
2007-08
230
7.0
2008-09
200
-13.0
2009-10
199
-0.5
2010-11
169
-15.1
2011-12
160
-5.3
2012-13
150
-6.2
Year
*Estimate
SOURCE: IBISWORLD
billion from the metropolitan media
segment, which includes newspaper and
magazine publishing. In the five years
through 2012-13, the company’s
magazine revenue is estimated to
decrease by a nominal annualised 8.2%
to $150.0 million, which is higher than
the nominal industry average of 4.7% (or
6.5% in real terms). A drop in newspaper
circulation has negatively affected
advertising revenue from newspaperinserted magazines. A weak retailadvertising environment has also
negatively affected magazine revenue
over this period.
Magazine and Directory Publishing in AustraliaJuly 2013 26
WWW.IBISWORLD.COM.AU
Major Companies
Player Performance
News Australia
Holdings Pty
Limited
Market share: 2.8%
Industry Brand Names
Sunday Style
Vogue Australia
Vogue Living
GQ Australia
Big League
Australian Golf Digest
delicious.
donna hay
Inside Out
Country Style
Other Companies
News Ltd is a subsidiary of News Australia
Holdings Pty Limited, which is owned by
US-based News Corporation and controlled
by the Murdoch family. The group has
global interests in newspapers, magazines
and inserts, book publishing, TV
broadcasting, cable and satellite TV,
internet media and film production. It
began as a one-newspaper company and
has grown to become one of the world’s
leading publishers of newspapers and a
major global media group. In Australia,
News Corporation’s major interests include
newspaper publishing (including magazine
inserts), pay TV, magazine publishing,
e-commerce and sports ownership. In
2007, News Ltd completed the acquisition
of the newspaper, magazine and online
assets of Federal Publishing Company
(FPC). FPC’s Magazine Group comprised
25 magazines and associated websites. It
was reported that News Ltd paid $180
million to acquire FPC’s Magazine Group.
News Ltd’s magazine business,
NewsLifeMedia, has a print and digital
portfolio spanning across the following
categories: food, fashion, home, health,
parenting and weekend newspaper
inserts. The business publishes more
than a dozen magazines, which are also
available in digital versions, six
newspaper-insert magazines, six websites
and two newspaper lift-outs. The
business has stated that it accounts for
almost 80% of major titles in the food
category and is the country’s largest food
publisher. In February 2012, News Ltd
acquired the Best Recipes website, which
is expected to provide opportunities to
grow the company’s food magazine titles.
News Magazines also publishes
Although there are concerns about the
future of publishing and printing in
Australia, most activity in the industry is
accounted for by a handful of large-scale
publishers that benefit from economies of
scale and distribution. Both globally and on
a domestic level, the industry is dominated
by companies actively seeking to increase
their operations through takeovers.
News Ltd – industry related
performance*
Revenue
($ million)
(% change)
2007-08
110
N/C
2008-09
107
-2.7
2009-10
105
-1.9
2010-11
100
-4.8
2011-12
95
-5.0
2012-13
90
-5.3
Year*
*Estimate
SOURCE: IBISWORLD
homemaker and lifestyle titles. In the
fashion category, News Magazines
publishes the Australian edition of
Vogue. Female fashion readers are also
catered to through the Sunday Magazine.
The company’s market share of average
consumer magazine circulation is about
6.4%, while it accounts for about 12.9% of
total readership.
Financial performance
In the five years through 2012-13, the
company’s Australian magazine revenue
is estimated to decrease by a nominal
annualised 3.9% to $90.0 million, which
is slightly better than the average
industry decline in nominal terms of
4.7% (or 6.5% in real terms). Advertising
revenue from newspaper-inserted
magazines has been negatively affected
by weak newspaper sales. Magazine
revenue over this period has also been
negatively affected by a weak retail
advertising environment.
Reader’s Digest (Australia) Pty Ltd
Estimated market share: 2.3%
Reader’s Digest (Australia) Pty Ltd is
owned by Reader’s Digest Association
Inc., a US company that has suffered
financial difficulties since 2009 when it
entered bankruptcy protection, emerging
in 2013. Its major publication is Reader’s
Digest, which publishes 75 editions in 21
Magazine and Directory Publishing in AustraliaJuly 2013 27
WWW.IBISWORLD.COM.AU
Major Companies
Other Companies
continued
languages and is sold in 78 countries. The
company also publishes special interest
magazines and books. Reader’s Digest is
widely known for its direct marketing
activities and continues to expand into
other distribution channels, such as
direct-response TV, display marketing,
catalogues, retail and the internet. In
Australia in 2012, about 2.5 million
copies of Reader’s Digest were purchased
by consumers, unchanged from 2009
when it had the fourth-largest circulation
of magazines published in Australia with
a 2.0% share of circulation in the
consumer magazine market. In 2009-10,
Reader’s Digest posted revenue of $126.3
million, which is estimated to decline to
$100.0 million in 2012-13, with threequarters of this estimated to be
applicable to the industry.
NextMedia Pty Ltd
Estimated market share: less than 1.0%
NextMedia Pty Ltd, renamed from
Wolseley Media Pty Ltd, was established
in Sydney in 2008 and is now the
fourth-largest magazine publishing firm
in Australia. The company was
established with the purpose of
acquiring popular and special interest
titles owned by Horwitz Publications
Pty Ltd – a family company that had
operated for 88 years. Chevron
Publishing Group Pty Ltd and Bluewater
Publishing Pty Ltd were also acquired.
NextMedia is owned by Wolseley
Private Equity, an Australian-owned
fund manager, and two senior
executives. NextMedia has over 50
full-time employees plus a network of
contributors and contractors providing
freelance services to the company. The
company currently has 35 magazine
titles and sells DVDs, books and other
products. NextMedia is continuing to
pursue growth via further acquisitions
and across purchasing and business
practices. IBISWorld estimates
company revenue totalled $30.0 million
in 2012-13.
Other smaller players
Established in 1986, Universal Magazines
is a privately owned company that claims
to be Australia’s largest niche publisher,
with over 60 consumer magazine titles
including home, craft, bike and lifestyle
categories. In August 2011, Universal
announced the acquisition of the
Westwick-Farrow Media business, which
published industrial and technologyfocused print and digital trade publications.
Reed Elsevier Australia Pty Ltd is
based in New South Wales. The company
is part of the Reed Elsevier group, which
is a world leading publisher and
information provider with principal
operations located in the United States
and Europe. Reed Elsevier is a major
supplier of periodicals and serials (both
in print and online) to the legal, scientific,
business-to-business and higher
education sectors.
John Wiley & Sons Australia Ltd is the
Australian subsidiary of John Wiley &
Sons Inc, which is headquartered in the
United States and is a global publisher of
print and electronic products. The
company’s core businesses produce
professional and consumer books, and
subscription journal products. Textbooks
and educational materials are also
published by this company. Employing
nearly 300 people nationally, Wiley
Australia generated revenue of about $80
million in 2011-12. Effective January
2007, John Wiley & Sons Inc finalised
the acquisition of Blackwell Publishing, a
UK-based company that publishes
journals and books for the academic,
research and professional markets
focusing mainly on science, technology,
medicine and social sciences.
IDG Communications is part of
International Data Group, which was
established in the United States in 1964
and specialises in technology media,
events and research. In Australia, IDG
Communications publishes seven
magazines related to technology,
computers and information systems.
Magazine and Directory Publishing in AustraliaJuly 2013 28
WWW.IBISWORLD.COM.AU
Operating Conditions
Capital Intensity | Technology & Systems | Revenue Volatility
Regulation & Policy | Industry Assistance
Capital Intensity
Level
The level
of capital
intensity is L ow
Overall, the industry has a low capital
intensity level as functions such as
journalism, editing, advertising sales and
distribution are labour intensive. Capital
investment to operate in the industry is
at a low to moderate level. Using wages
data from the industry cost structure as a
proxy for labour and depreciation as a
proxy for capital, IBISWorld estimates
that for each $1.00 invested in plant,
equipment, machinery, vehicles and
buildings, $12.69 is required for labour
inputs across the industry.
Capital intensity can vary between
firms and is influenced by whether
printing is done in-house or outsourced.
Currently, printing is principally
outsourced and magazine distribution is
often outsourced. ACP has its own
distribution business and has had plans
to commence its own printing operation.
While the directory segment is increasing
Capital intensity
Capital units per labour unit
1.0
0.8
0.6
0.4
0.2
0.0
Economy
Information Magazine and
Media and
Directory
TelecommuniPublishing
Dotted line shows a high level of capital intensity
SOURCE: WWW.IBISWORLD.COM.AU
its use of technology, labour input
remains significant. Labour intensity is
particularly evident in the areas of
compiling, checking and updating
directory and advertiser entries, and in
selling of advertising space.
Tools of the Trade: Growth Strategies for Success
Investment Economy
Recreation, Personal Services,
Health and Education. Firms
benefit from personal wealth so
stable macroeconomic conditions
are imperative. Brand awareness
and niche labour skills are key to
product differentiation.
Information, Communications,
Mining, Finance and Real
Estate. To increase revenue
firms need superior debt
management, a stable
macroeconomic environment
and a sound investment plan.
Traditional Service Economy
Wholesale and Retail. Reliant
on labour rather than capital
to sell goods. Functions cannot
be outsourced therefore firms
must use new technology
or improve staff training to
increase revenue growth.
Supermarkets and Grocery Stores
Convenience Stores
Pulp, Paper and
Paperboard
Manufacturing
Printing
Newspaper Publishing
Magazine and Directory Publishing
Change in Share of the Economy
Capital Intensive
Labour Intensive
New Age Economy
Old Economy
Agriculture and Manufacturing.
Traded goods can be produced
using cheap labour abroad.
To expand firms must merge
or acquire others to exploit
economies of scale, or specialise
in niche, high-value products.
SOURCE: WWW.IBISWORLD.COM.AU
Magazine and Directory Publishing in AustraliaJuly 2013 29
WWW.IBISWORLD.COM.AU
Operating Conditions
Technology & Systems The major technological developments in
of
Technology Change
is M
edium
Revenue Volatility
Level
The level
of
Volatility is M
edium
revenue is growing
at the expense of highmargin print revenue
means to deliver information, content
and advertising to niche markets.
Increased automation in printing has
reduced printing costs. For many years
hot metal typeset formed the basis of the
printing process. Computer-to-plate
printing, or digital printing, allows
publications to be printed quicker and
cheaper. Computer software can assist in
the monitoring of magazine and other
periodical sales. Returns, or unsold
copies, represent a significant cost to the
industry, such as printing and
distribution costs. Publishers utilise
software that records sales at newsagents
with the aim of reducing returns.
This industry has shown a moderate level
of revenue volatility over the five years
through 2013-14, with declines occurring
at high and steady rate over these years.
This has been due to declining circulation
and advertising levels in the past five
years. As advertising revenue accounts
for about 60% of industry revenue, and a
much greater percentage of directory
revenue, conditions in advertising
markets can have a significant effect on
industry revenue. Advertising spending is
sensitive to economic conditions, retail
spending and consumer confidence.
Advertising levels also vary by medium,
and can also be seasonal. Directories have
a heavy reliance on advertising by the
small and medium business sector, which
can be volatile. Advertising is drifting form
traditional printed products to the
internet, and this is having a negative
impact on advertising volumes in
A higher level of revenue
volatility implies greater
industry risk. Volatility can
negatively affect long-term
strategic decisions, such as
the time frame for capital
investment.
When a firm makes poor
investment decisions it
may face underutilised
capacity if demand
suddenly falls, or capacity
constraints if it rises
quickly.
Volatility vs Growth
1000
Revenue volatility* (%)
Level
The level
Online
the industry include advances in
communications that are helping to drive
the proliferation of new media platforms
that give customers greater choice as to
how and when they receive their
entertainment and information.
Smartphones, computer tablets, digital
TV, video mobile broadcasting,
podcasting and interactive TV present
both opportunities and threats to
traditional media’s readership and
advertising bases.
Search engine software technology
allows people and organisations to search
the web and databases for information on
pre-determined search criteria. Revenue
of online periodicals and directories are
increasing at a rapid rate, but at the
expense of higher-margin print
publications. The internet and wireless
devices provide an alternative low-cost
Hazardous
Rollercoaster
Magazine
and Directory
Publishing
100
10
1
0.1
Stagnant
–30
–10
Blue Chip
10
30
50
70
Five year annualised revenue growth (%)
* Axis is in logarithmic scale
SOURCE: WWW.IBISWORLD.COM.AU
Magazine and Directory Publishing in AustraliaJuly 2013 30
WWW.IBISWORLD.COM.AU
Operating Conditions
Revenue Volatility
continued
magazines and printed directories.
Magazine and periodical subscriptions
and sales are relatively stable. However,
consumer magazine sales can be affected
by economy-wide household confidence,
retail spending, and fads and trends in
personal interests. In addition, sales of
periodicals can be affected by the
migration of readers to other media, such
as to TV or the internet.
Regulation & Policy
The major areas where laws and
regulations affect the industry include the
following: intellectual property, such as
trademarks and copyright; defamation
and contempt; restrictions on publishing
material that is obscene, blasphemous or
an incitement to racial hatred; and,
advertising, marketing and privacy laws.
In addition, environmental pollution
control laws affect printing of periodicals.
The Privacy Act impacts direct mail
list operators. The Act covers direct
marketing, such as telemarketing and
advertising via email, SMS or post. A
person that does not want to receive calls
from telemarketers can put themself on
the Commonwealth Government’s Do
Not Call Register. However, some
organisations operating in the public
interest, such as charities, are exempt.
The Spam Act makes it illegal in
Australia to send unsolicited commercial
electronic messages.
The Magazine Publishers of Australia is
an industry association representing
Australia’s leading publishers of consumer
magazines. The Publishers National
Environment Bureau is the association of
Australia’s leading newspaper and
magazine publishers working to promote
the sustainable recovery of old
newspapers and magazines.
Level & Trend
he level of
T
Regulation is
Mediumand the
trend is S
teady
Industry Assistance
Level & Trend
he level of
T
Industry Assistance
is L owand the
trend is S
teady
There is no significant government
assistance to the industry, other than
advertising and notices placed by
governments in periodicals. There are also
no tariffs placed on imported magazines.
Magazine and Directory Publishing in AustraliaJuly 2013 31
WWW.IBISWORLD.COM.AU
Key Statistics
Industry Data
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
Sector Rank
Economy Rank
Revenue
($m)
4,237.5
4,423.1
4,427.1
4,444.6
4,278.9
4,156.0
3,744.9
3,330.9
3,210.9
3,059.7
2,989.6
2,926.8
2,874.9
2,845.0
2,829.1
8/21
278/620
Annual Change
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
Sector Rank
Economy Rank
Revenue
(%)
4.4
0.1
0.4
-3.7
-2.9
-9.9
-11.1
-3.6
-4.7
-2.3
-2.1
-1.8
-1.0
-0.6
19/21
599/620
Industry
Value Added
($m)
Establishments
2,053.3
1,264
2,110.0
1,305
2,110.3
1,344
2,076.7
1,437
2,055.4
1,367
2,115.1
1,352
1,812.3
1,361
1,569.9
1,312
1,465.2
1,286
1,372.7
1,275
1,333.7
1,265
1,304.2
1,255
1,287.0
1,247
1,277.1
1,242
1,268.8
1,236
7/21
7/21
222/620
294/620
Enterprises
1,171
1,213
1,251
1,342
1,278
1,266
1,276
1,232
1,209
1,201
1,192
1,185
1,179
1,175
1,172
3/21
242/619
Employment
16,580
16,150
15,980
15,600
14,700
13,970
12,980
11,410
11,030
10,580
10,370
10,200
10,030
9,870
9,700
6/21
256/620
Exports
($m)
73.4
64.5
63.4
54.7
50.3
49.8
49.3
49.3
50.1
50.8
51.3
51.7
52.0
52.5
52.9
3/3
159/213
Imports
($m)
337.9
277.7
253.7
233.1
214.4
211.2
194.7
181.8
187.6
190.5
193.9
197.2
199.8
202.5
204.9
3/3
125/199
Wages
($m)
1,212.3
1,174.2
1,164.2
1,155.9
1,099.2
1,049.8
948.6
867.2
837.0
815.3
801.9
789.6
778.6
770.2
762.0
5/21
201/620
Domestic
Demand
($m)
4,502.0
4,636.3
4,617.4
4,623.0
4,443.0
4,317.4
3,890.3
3,463.4
3,348.4
3,199.4
3,132.2
3,072.3
3,022.7
2,995.0
2,981.1
1/3
79/196
Industry
Value Added Establishments
(%)
(%)
2.8
3.2
0.0
3.0
-1.6
6.9
-1.0
-4.9
2.9
-1.1
-14.3
0.7
-13.4
-3.6
-6.7
-2.0
-6.3
-0.9
-2.8
-0.8
-2.2
-0.8
-1.3
-0.6
-0.8
-0.4
-0.6
-0.5
18/21
12/21
602/620
491/620
Enterprises
(%)
3.6
3.1
7.3
-4.8
-0.9
0.8
-3.4
-1.9
-0.7
-0.7
-0.6
-0.5
-0.3
-0.3
14/21
460/619
Employment
(%)
-2.6
-1.1
-2.4
-5.8
-5.0
-7.1
-12.1
-3.3
-4.1
-2.0
-1.6
-1.7
-1.6
-1.7
19/21
591/620
Exports
(%)
-12.1
-1.7
-13.7
-8.0
-1.0
-1.0
0.0
1.6
1.4
1.0
0.8
0.6
1.0
0.8
1/3
119/213
Imports
(%)
-17.8
-8.6
-8.1
-8.0
-1.5
-7.8
-6.6
3.2
1.5
1.8
1.7
1.3
1.4
1.2
2/3
123/199
Wages
(%)
-3.1
-0.9
-0.7
-4.9
-4.5
-9.6
-8.6
-3.5
-2.6
-1.6
-1.5
-1.4
-1.1
-1.1
18/21
579/620
Domestic
Demand
(%)
3.0
-0.4
0.1
-3.9
-2.8
-9.9
-11.0
-3.3
-4.4
-2.1
-1.9
-1.6
-0.9
-0.5
3/3
182/196
Average Wage
($)
73,118.21
72,705.88
72,853.57
74,096.15
74,775.51
75,146.74
73,081.66
76,003.51
75,883.95
77,060.49
77,328.83
77,411.76
77,627.12
78,034.45
78,556.70
8/21
163/620
Share of the
Economy
(%)
0.17
0.17
0.17
0.16
0.15
0.15
0.13
0.11
0.10
0.09
0.08
0.08
0.08
0.08
0.07
7/21
222/620
Key Ratios
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
Sector Rank
Economy Rank
IVA/Revenue
(%)
48.46
47.70
47.67
46.72
48.04
50.89
48.39
47.13
45.63
44.86
44.61
44.56
44.77
44.89
44.85
7/21
191/620
Imports/Demand Exports/Revenue
(%)
(%)
7.51
1.73
5.99
1.46
5.49
1.43
5.04
1.23
4.83
1.18
4.89
1.20
5.00
1.32
5.25
1.48
5.60
1.56
5.95
1.66
6.19
1.72
6.42
1.77
6.61
1.81
6.76
1.85
6.87
1.87
3/3
3/3
139/196
176/213
Figures are inflation-adjusted 2014 dollars. Rank refers to 2014 data.
Revenue per
Employee
($’000)
255.58
273.88
277.04
284.91
291.08
297.49
288.51
291.93
291.11
289.20
288.29
286.94
286.63
288.25
291.66
12/21
327/620
Wages/Revenue
(%)
28.61
26.55
26.30
26.01
25.69
25.26
25.33
26.04
26.07
26.65
26.82
26.98
27.08
27.07
26.93
8/21
182/620
Employees
per Est.
13.12
12.38
11.89
10.86
10.75
10.33
9.54
8.70
8.58
8.30
8.20
8.13
8.04
7.95
7.85
13/21
281/620
SOURCE: WWW.IBISWORLD.COM.AU
Magazine and Directory Publishing in AustraliaJuly 2013 32
WWW.IBISWORLD.COM.AU
Jargon & Glossary
Industry Jargon
CIRCULATIONNumber of copies sold per issue, or
distributed in the case of a free title.
CONSUMER MAGAZINESTitles aimed at the general
public that cover a broad range of topics.
IBISWorld Glossary
BARRIERS TO ENTRYHigh barriers to entry mean that
new companies struggle to enter an industry, while low
barriers mean it is easy for new companies to enter an
industry.
CAPITAL INTENSITYCompares the amount of money
spent on capital (plant, machinery and equipment) with
that spent on labour. IBISWorld uses the ratio of
depreciation to wages as a proxy for capital intensity.
High capital intensity is more than $0.333 of capital to
$1 of labour; medium is $0.125 to $0.333 of capital to
$1 of labour; low is less than $0.125 of capital for every
$1 of labour.
CONSTANT PRICESThe dollar figures in the Key
Statistics table, including forecasts, are adjusted for
inflation using the current year (i.e. year published) as
the base year. This removes the impact of changes in
the purchasing power of the dollar, leaving only the
‘real’ growth or decline in industry metrics. The inflation
adjustments in IBISWorld’s reports are made using the
Australian Bureau of Statistics’ implicit GDP price
deflator.
MAGAZINEA periodical that is published frequently.
READERSHIPThe number of people reading a
periodical, as opposed to the number of people buying
it.
INDUSTRY REVENUEThe total sales of industry goods
and services (exclusive of excise and sales tax); subsidies
on production; all other operating income from outside
the firm (such as commission income, repair and service
income, and rent, leasing and hiring income); and
capital work done by rental or lease. Receipts from
interest royalties, dividends and the sale of fixed
tangible assets are excluded.
INDUSTRY VALUE ADDED (IVA)The market value of
goods and services produced by the industry minus the
cost of goods and services used in production. IVA is
also described as the industry’s contribution to GDP, or
profit plus wages and depreciation.
INTERNATIONAL TRADEThe level of international
trade is determined by ratios of exports to revenue and
imports to domestic demand. For exports/revenue: low is
less than 5%; medium is 5% to 20%; and high is more
than 20%. Imports/domestic demand: low is less than
5%; medium is 5% to 35%; and high is more than
35%.
EMPLOYMENTThe number of permanent, part-time,
temporary and casual employees, working proprietors,
partners, managers and executives within the industry.
LIFE CYCLEAll industries go through periods of growth,
maturity and decline. IBISWorld determines an
industry’s life cycle by considering its growth rate
(measured by IVA) compared with GDP; the growth rate
of the number of establishments; the amount of change
the industry’s products are undergoing; the rate of
technological change; and the level of customer
acceptance of industry products and services.
ENTERPRISEA division that is separately managed and
keeps management accounts. Each enterprise consists
of one or more establishments that are under common
ownership or control.
NONEMPLOYING ESTABLISHMENTBusinesses with
no paid employment or payroll, also known as
nonemployers. These are mostly set up by self-employed
individuals.
ESTABLISHMENTThe smallest type of accounting unit
within an enterprise, an establishment is a single
physical location where business is conducted or where
services or industrial operations are performed. Multiple
establishments under common control make up an
enterprise.
PROFITIBISWorld uses earnings before interest and tax
(EBIT) as an indicator of a company’s profitability. It is
calculated as revenue minus expenses, excluding
interest and tax.
DOMESTIC DEMANDSpending on industry goods and
services within Australia, regardless of their country of
origin. It is derived by adding imports to industry
revenue, and then subtracting exports.
EXPORTSTotal value of industry goods and services sold
by Australian companies to customers abroad.
IMPORTSTotal value of industry goods and services
brought in from foreign countries to be sold in Australia.
INDUSTRY CONCENTRATIONAn indicator of the
dominance of the top four players in an industry.
Concentration is considered high if the top players
account for more than 70% of industry revenue.
Medium is 40% to 70% of industry revenue. Low is less
than 40%.
VOLATILITYThe level of volatility is determined by
averaging the absolute change in revenue in each of the
past five years. Volatility levels: very high is more than
±20%; high volatility is ±10% to ±20%; moderate
volatility is ±3% to ±10%; and low volatility is less than
±3%.
WAGESThe gross total wages and salaries of all
employees in the industry. Benefits and on-costs are
included in this figure.
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