Da! To the Good Life

Folio: The Magazine for Magazine Management, Sept 1, 2004 by Liz Borod

Byline: Liz Borod

More and more Russians are enjoying the good life. They're shopping, partying and traveling. And Western magazines are arriving on the scene to tell them how to do it. Glamour will launch a Russian edition on September 1, and Time Out St. Petersburg will launch in October. Forbes and the Robb Report both launched Russian editions in April. "The hot period has cooled down, but it's still warm," says John Cabell, CEO of Cue Ball, an international media consulting firm. (Disclosure: Primedia, Folio:'s parent company, is also a client.) Unlike other emerging markets, he adds, "you can actually make a decent amount of money in Russia."

After the U.S. and the U.K., Russia is the third most profitable country for Hearst publications, says George Green, president and CEO of Hearst Magazines International. Through a joint venture with Russian partner Independent Media, Hearst has Russian editions of Cosmo, Bazaar, Good Housekeeping and Popular Mechanics. The Russian Cosmo, which celebrated its 10 [superscript]th anniversary in May, has the largest paid circulation (610,000) of any women's monthly in all of Europe. In 1997, Hearst put out an 850-page issue (600 ad pages!) in honor of Moscow's 850 [superscript]th birthday. The company also runs two monthly stand-alone spin-offs: Cosmo Beauty and Cosmo Magic.

Like most Europeans, Russians rarely subscribe to magazines, but they stock up at the newsstand. The population of 143.7 million is highly literate and likes to read: As of 2002, there were 30,000 titles officially registered (12,726 consumer), according to the International Federation of the Periodical Press. Magazines experienced strong growth in advertising from 2001 to 2002 - a whopping 39 percent. And that's without pharmaceuticals, a staple for Western publishers. Drug companies are legally prohibited from advertising over-the-counter and prescription drugs in magazines.

"The Russian economy is better than ever," Green says. For the past five years, it has grown an average of 6.5 percent a year, according to the CIA World Factbook. And Russians are quick to spend. "There's no culture in Russia of saving or investing for the future," says Cabell, who also brokered the deal to launch Travel Leisure Russia in December 2003. "So, as soon as Russians have money, they spend it." Advertisers want to reach those free-spending readers, who now tune in to Sex and the City, where they see commercials for the new Russian Glamour. Conde Nast plans to spend $5 million to promote Glamour. According to Conde Nast International chairman, Jonathan Newhouse, that's "the most money ever spent in the history of the country" on a new launch. Glamour was preceded in Russia by sister mags Vogue and GQ, which are produced by wholly owned Conde Nast entities.

Breaking into this market is not for the faint of heart. International Data Group (IDG), which launched a Russian edition of PC World in 1988 and has since added three titles, switched from a 50-50 joint venture with local partner Open System Publishing to a licensing agreement. IDG didn't want to hold equity there, says David Hill, president and CEO of International Publishing Services. "Publishing in Russia is a bit like the Wild West."

There is disturbing truth to that hyperbole. In a country where the new business elite includes gang members and known criminals, it's easy to run into trouble. On July 9, the editor of Forbes Russia, Paul Klebnikov, was gunned down because of a feature that ran in the May issue listing 100 of the wealthiest Russians. It may have brought unwelcome attention in a climate where people prefer to keep their finances secret, according to the Committee to Protect Journalists, a nonprofit based in New York City.

The Forbes Russia tragedy is unlikely to deter other publishers who want to tap in to a growth market. "Going in now is fine, sooner rather than later, because the market will get saturated with important publications," Cabell advises.