Publisher Acquires Guitar Title, Strikes Dissonant Chord

On the surface, last week's acquisition of Guitar World and three GW-branded publications by Future Network USA didn't make a lot of sense. Future Network, after all, experienced both the highs (the ascent of Business 2.0 and the quick launch of several other titles) and lows (the collapse of most of those magazines and a $20 million loss in 2001) of the Internet boom, and had since retrenched as a publisher of smaller gaming and tech titles. A niche publication for guitar enthusiasts didn't seem the best fit for the company's US portfolio.

To hear FN USA president Jonathan Simpson-Bint tell it, however, the purchase of Guitar World and its ilk (from Harris Publications for a reported $16 million) is a natural step in the company's continued revival. "Guitar World is very similar in a lot of ways to our gaming and technology magazines," he explains. "It appeals to a narrow audience, but one that is incredibly passionate about the subject matter. [Its readers] have a deep need for information."

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With Future Network's British parent (Future Network plc) set to announce its interim financial results next week in London, Simpson-Bint can only say so much about the company's future plans for Guitar World and the three other acquired publications (the bimonthly Guitar World Acoustic, the soon-to-be-bimonthly Guitar World's Bass Guitar and the quarterly Guitar World Legends). It's clear from his tone, however, that he believes Future Network snapped up potentially lucrative properties at a bargain price.

"Guitar World is practically an institution," he gushes. "When Led Zeppelin released their DVD and live album this year, [guitarist] Jimmy Page only did one US interview, and that was with Guitar World. I think that's as strong an endorsement as you can get."

While the four titles don't boast a huge number of readers - Guitar World's circulation barely exceeds 200,000 - their relatively strong presence on newsstands might be reason enough to justify Simpson-Bint's enthusiasm. For instance, the average issue of Guitar World Legends, which focuses on either a single musician or genre, sells around 150,000 copies. "That's titanic," Simpson-Bint quips.

Not surprisingly, all four GW titles devote most of their ad pages to guitars, amps and related gear, with a new-album plug sprinkled in from time to time. In terms of attempting to expand the mag's range of advertisers to include non-endemic companies and categories - say, clothing or snacks - it's unlikely that Future Network will do so anytime soon. "It's difficult for any special-interest magazine to do that unless that particular interest is extremely hot," Simpson-Bint says.

With its gaming magazines, however, Future Network has a solid presence in perhaps one of the few special-interest categories that is truly surging. The company publishes PC Gamer, PSM: 100% Independent PlayStation 2 Magazine and Official Xbox magazine, each of which is the leading title for its particular game platform, according to the Audit Bureau of Circulation. Simpson-Bint credits their success as much to a favorable business climate as to the relationship the mags have with their readers. "Future Network places a huge emphasis on that," he says. "These magazines should be like a best friend who visits once a month and gets you excited again about your hobby."

Of course, that special-interest titles tend to be relatively recession-proof hasn't hurt their case, either. These magazines, for the most part, tend to be a core buy for advertisers within the segment, meaning that they generally retain most of their ad dollars through thick and thin. "People tend to hibernate during recessions, and magazines like ours are cheap ways of maintaining a level of interest," Simpson-Bint notes.

Despite the recent economic stumbles, Future Network's gaming titles have been able to expand their advertiser base. "Games is a real flashpoint right now," Simpson-Bint says, pointing to new advertisers in the snack food/drinks, clothing and entertainment categories. And while the mag's tech titles (MacAddict and Maximum PC) grew minimally if at all, the company was still able to generate its first-ever profitable year in 2002 ($7 million).

Though he admits that the first six months of 2003 "were very tough," Simpson-Bint believes Future Network is at last ideally situated to grow again. His one concern going forward (or at least the one he's able to discuss): the glut of entertainment options.

"Human attention remains at a huge premium," he says. "That's not just our biggest challenge. It's the biggest challenge every publisher and Internet site and television network is facing."

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