From Russia With Love 2: The Burda Russia Story. The Mr. Magazine™ Interview with Jürgen Ulrich, CEO, Burda RussiaDecember 2, 2014
While miles and oceans may separate the USA and Russia, when it comes to magazine publishing and the media industry in general, the defining line is vague. Their troubles and triumphs are very similar to our own. On a recent trip I made to Moscow to give a keynote speech at the annual conference of the Press Distributors Association (PDA), that congruent fact was driven home to me clearly. From distribution, advertising challenges to the future of print; the USA and Russia amazingly are facing the same problems. See my first entry From Russia with Love.
In my interview with Jürgen Ulrich, we talked about the love between an audience and a brand, the enormity of the Burda brand itself in Russia, the very young distribution system in the country and the power of print. It was very familiar territory for me.
So, I hope you enjoy the Russian perspective from the magazine world as much as I did as you read my interview with Jürgen Ulrich, CEO, Burda Russia…
But first the sound-bites:
On whether Burda is the number one publisher in Russia: From a print run standpoint, I would say yes.
On whether he’s worried about the demise of print and the rise of digital: I would say no; I’m not even afraid of it from any other perspective, in fact, it’s good because technology is one thing that drives our portfolio.
On the biggest stumbling block facing magazine media in Russia: In Russia, I think we’re facing some different issues, in general. First of all, I would say it’s not an old industry in the country, from a magazine perspective. Of course, this means it’s a very young distribution system as well.
On his most pleasant surprise since coming to Burda Russia in 2011: The most pleasant surprise, I would say, is how much people really love our brands. It shows definitely that the industry is very much alive.
On the biggest stumbling block he’s already overcame: Probably the political situation, where we are fighting on the one side with a struggling economy and on the other side, having to change the business model more toward the future, so adding additional revenue streams to our business and in this case, it might mean digital or whatever it covers, an eco-mass.
On why magazines in Russia are so cheaply-priced: I think it’s a combination of everything. First of all, yes, it’s about income. If you see Moscow, Moscow is not average Russia.
On what keeps him up at night: (Laughs) What keeps me up at night? Everything that isn’t solved in the daytime. So you can imagine at the moment it’s a lot.
And now for the lightly edited Mr. Magazine™ conversation with Jürgen Ulrich, CEO of Burda Russia publishing company.
Samir Husni: You have 80 different titles. Burda Style – the magazine – is the largest women’s magazine around, but is Burda the number one publisher here?
Jürgen Ulrich: From a print run standpoint, I would say yes. Of course, you do have Cosmopolitan, which is in a totally different segment. We still have in the food segment a title which is, from a monthly print run, bigger than even Burda Style. It’s a user-generated content title which at that stage, I’d say we founded a new segment about six or seven years ago, so we’re still getting a lot of letters from the regions, so it’s not even email driven or digital; it’s really letters from the regions. It has an editorial team of two people and they create a monthly food title of about 100 to 150 pages.
So the segment is quite different, we’re covering a lot of communities, starting from food which is one of our core competencies and going to crafting, where we cover sewing, knitting and from an eco-system point of view, having a digital layout of our brand into new technologies.
In the home interior and design segment; we just acquired one of the famous Russian publishers, so we’re now with the brand Salon, and your home ideas are more or less present in the segment and upscale. So this is something that is totally new to Burda, because we’re a mass market and very successful here and I would say the biggest one in terms of covering that kind of audience.
I think the success stories, we understood from the beginning and we know distribution very well, which is basically the key for us to the point-of-sale and to the final consumer. And with that we’re adding a lot of additional new products and going already more niche, so we’re seeing this development of cost coming up.
Samir Husni: From 1987, were you the first international licensees?
Jürgen Ulrich: It was the first international brand. We started with new brands in 1995. You can see a lot of brands that really came into the market on concepts that were adapted from locals to the Russian market starting in 1995.
Samir Husni: As a CEO of a major publishing company; are you worried about the demise of print and the rise of digital instead?
Jürgen Ulrich: I would say no; I’m not even afraid of it from any other perspective, in fact, it’s good because technology is one thing that drives our portfolio. And the printing business itself, it’s also technology-driven. Burda, as a company in Germany, ran their own printing house, and there is now one in India as well, so there is still a huge demand for print and it’s technology-driven.
If you do it in the right way, I think this will help to further publish additional new products, going more into niche and offering different solutions as well to all kinds of clients or advertisers. I think it’s a good thing, if you handle it right.
Samir Husni: I’m one of those people who believe that print will be with us as long as there are humans. (Laughs)
Jürgen Ulrich: (Laughs)
Samir Husni: What do you think is the major stumbling block facing the magazine industry here in Russia?
Jürgen Ulrich: In Russia, I think we’re facing some different issues, in general. First of all, I would say it’s not an old industry in the country, from a magazine perspective. Of course, this means it’s a very young distribution system as well, which for the size of the country runs totally different from the States and from Germany. So we have quite some issues getting the magazines to the consumer.
The other thing is the general development of the media industry; the speed is quite different from other countries. Granted, the industry is very young, but the speed of new technology is as fast-growing as everywhere, so we’re facing this in a combination. We need to hurry here as well and of course; it’s an emerging market, which has its ups and downs, more regular than in other well-known countries.
Samir Husni: In those last three years as Burda Russia CEO; what has been your most pleasant surprise?
Jürgen Ulrich: The most pleasant surprise, I would say, is how much people really love our brands. It shows definitely that the industry is very much alive. If we can handle distribution and get the product in the hands of people, they really do love our brands. It’s nothing like print is dying at all.
Samir Husni: And the biggest stumbling block you’ve already overcame?
Jürgen Ulrich: Probably the political situation, where we are fighting on the one side with a struggling economy and on the other side, having to change the business model more toward the future, so adding additional revenue streams to our business and in this case, it might mean digital or whatever it covers, an eco-mass. Is it an event business as well?
And more or less analyzing the opportunities of each brand and this in combination with our need to speed up is very important. We just started this year implementing a new asset management system; call it a media or digital asset management system. With fewer resources we can increase our output to be more efficient, to publish our content to different kinds of channels at the same time.
So, it’s a lot of things as well as the staff is struggling a bit, because they have new things to learn, but they catch on very quickly. It’s not so easy for everyone, but I think we’re doing quite well.
We’re switching to Censhare, a German system, which is, from our perspective, a very good platform toward developing new revenue streams. So not focusing on only print, but going much further into retail. Our staff considered it to be much more toward retail. So connecting consumers as the reasoning behind every single thing we do. Looking into the audience and understanding their needs.
If you look at our portfolio we have advisory, education, different kinds of emotional products. So understanding the needs and driving consumers to buy the products of our advertisers.
Samir Husni: I was walking and looking at the newsstands here in Moscow and discovered that magazines are cheap. Is it the economy or the marketplace, or just standard prices?
Jürgen Ulrich: I think it’s a combination of everything. First of all, yes, it’s about income. If you see Moscow, Moscow is not average Russia. You have the regions where the pocket money for items of lifestyle is definitely less than Moscow. From that perspective, it’s a different thing.
And of course, from a mass market perspective, if you look at the kiosk, you find more mass market titles than really high-end titles.
Samir Husni: And what’s the split between subscription and newsstand? Is it mainly newsstand?
Jürgen Ulrich: For us, if you look at our portfolio, it’s mainly newsstand-driven. Adding now some segments like the interior segment of course, we go further into news segments, where it’s more advertising-driven. Everything depends on the audience ultimately. Where the money is being spent and where are the needs? Those are questions that we’re looking into.
Samir Husni: And the split between revenue from advertising and revenue from circulation?
Jürgen Ulrich: In this case, you could say close to 50/50. It depends on which segment you’re looking at.
Samir Husni: My typical last question; what keeps you up at night?
Jürgen Ulrich: (Laughs) What keeps me up at night? Everything that isn’t solved in the daytime. So you can imagine at the moment it’s a lot.
We have to hurry with a lot of things in order to switch our business model and get it organized. But on the other hand, I trust in my team. I have a very good team.
Samir Husni: Thank you.