Hearst closure of Dutch ‘Red’ – and cash cow thinking

Heart Magazines Nederlands has decided to stop the women's lifestyle glossy magazine Red from the June 2014 edition

Heart Magazines Nederlands has decided to stop publishing the women’s lifestyle glossy magazine Red from the June 2014 edition

Big consumer groups such as Unilever have occasional culls of their brands – in 1999, it sold off two-thirds of its products! The theory is that you focus your money and management on the strongest brands and get rid of the smaller ones. In the jargon invented as part of the Boston matrix, companies should milk the cash generated by their ‘cash cows’, to spend on their ‘stars’ and ‘question marks’, while closing down the ‘dogs’.

The decision by Heart Magazines Nederlands to close women’s monthly lifestyle magazine Red is an example of that sort of thinking. It also demonstrates the global strategy of the US parent company.

The June 2014 edition will be the last, with the Dutch press reporting that Hearst saw a lack of interest among advertisers for the glossy monthly. So, Red had become a ‘dog’. However, the Dutch subsidiary also publishes Elle, undoubtedly a global ‘star’, and the closure frees up resources for that title. More importantly, Hearst Magazines Netherlands is launching a Dutch edition of Harper’s Bazaar at the end of August. This ‘question mark’ is where the money will go.

Harper’s Bazaar was bought by Hearst in 1913 and is a core star title for the US publisher. In contrast, Red is an English licensed glossy, which was launched 10 years ago by Hachette in the Netherlands. The original Red was invented by Emap and Hachette Filipacchi as a joint venture in 1989. It coined the term ‘middle youth’ for its target market, with a focus on fashion, beauty, jewellery, interiors, food and travel, for women aged over 30.

In 2011, US group Hearst bought Hachette Filipacchi from French media group Lagardere. As a result, it changed the near century-old name of its UK offshoot, the National Magazine Company, to Hearst UK and closed veteran title She. Similarly, the Hachette name was changed to Hearst across the world. Another victim of magazine globalisation was in 2006 when Harper’s & Queen dropped the second half of its name – which had come about when Harper’s took over the 110-year-old Queen in 1970 – to match the Harper’s Bazaar name elsewhere.

At the heart of the thinking is the ability to sell the same name to international advertisers more easily.

The Dutch Red was selling 62,167 copies an issue in 2013, and was read by 174,000 readers (NOM). In the UK, Red‘s sales are a healthy 203,354, well ahead of both Elle (172,079) and Harper’s Bazaar (111,071). So in Hearst’s global strategy it is a cash cow – though that may mean it can be starved of investment and may eventually become a dog as other titles suck out its cash. While UK editions of Red can be bought on Amazon in the US – for an eye-watering $11 – Hearst is unlikely to launch it there.

Hearst editions of Red elsewhere need to keep looking over their shoulders.

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