The Scandinavian publishing challenge

Folio: The Magazine for Magazine Management, August, 1986 by Robert J. Abramson

The Scandinavian publishing challenge

All around the world there are magazine publishing empires that are dominant in the countries where they operate. In the United States, there is Time-Life, Hearst, McGraw-Hill and Conde Nast. In Italy, there is Mondadoir. In the United Kingdom, there's IPC. And in Germany, Bertelsmann and Springer.

In the Nordic countries the giant has long been Bonnier--and for the size of the countries involved, it is probably more dominant in its territory than any of the others.

What is the story behind Bonnier? Who runs it? What makes it tick? During my frequent visits to Stockholm, the seat of the Bonnier empire, I often visit with Lukas Bonnier, the chairman of the Bonnier Magazine Group, and Carl Johan Bonnier, director of the Semic Group, the youth arm of Bonnier. On my last visit, I put some questions to Lukas Bonnier. Here is the interview.

RJA: Bonnier is one of Sweden's dominant companies--not just in publishing, but also in building, printing presses and in printing. Have you looked outside Scandinavia to develop your markets further?

LB: The hardware side of the group has been active in many countries all over the world for many years, with its own factories in at least 20 countries outside Sweden. But it has been difficult to find a way of exporting out publishing activities.

In the fifties, my eldest brother Albert, who is truly the man who built the Bonnier Group as we know it today, tried to do foreign editions of some of our magazines--starting such editions in Columbia, Brazil and France, for example. But it soon became painfully obvious that it was very difficult to transport Swedish tastes and Swedish entertainment onto foreign soil. About 15 years ago I tried a different way by trying to find clever, reliable and professional magazine publishing partners outside of Sweden, and this has turned out to be a more successful way of exporting our magazine know-how.

RJA: And what about the magazine publishing business in Sweden?

LB: I succeeded my brother Albert as president of Bonnier Magazines in 1957 and stayed on that job for 23 years, taking over as chairman of the Magazine Group around 1980. During that time, we added quite a few new type magazines to the old standby general consumer weeklies. There is now a growing business-news magazine division at Bonnier, there are special interest consumer monthlies, and there is the Semic comic book division, which is now publishing in seven other countries. There is also an electronic publishing group, and there is the Bonnier Magazine Group International, which is responsible for all magazine publishing activities outside Sweden.

RJA: What is the annual turnover of the entire Bonnier Group and how much of that can be attributed to publishing activities?

LB: The entire group has a yearly turnover of just about four billion Swedish crowns [about $520,000,000 at present conversion rates]. And the publishing activities--that is, books, films and magazines--still constitute the largest part. The magazine group itself, which is still the largest entity within the entire group, has a turnover of 1.8 billion Swedish crowns [$233,770,000]. In all three sections--books, films and magazines --ours are the largest companies in Sweden. Of course, so are the newspapers, but they are not considered to be within the group, as they are not 100 percent family owned.

RJA: How much of this revenue is attributable to "foreign' publishing income?

LB: Within the magazine group, we are already receiving almost half of our profits from foreign magazine publishing, and our aim is definitely to expand and develop our position on the international market. One of the reasons for this is that we are dominant within the media world of our country and we do not think we should become any bigger within our own borders.

RJA: What is your number-one target area for foreign expansion?

LB: Our first priority is the United States, and we are constantly looking for suitable partnerships there.

RJA: Considering Bonnier's areas of expertise, where do you plan to concentrate this effort?

LB: As our own experience is basically in the consumer field, we are looking primarily for special interest consumer magazines and general business and financial information magazines for our growth targets outside Sweden. This will naturally also include regional and local business papers, the filed in which we have been quite successful on a national scale both in Sweden and Denmark.

Another good reason for needing room to expand abroad is the fact that Sweden has a population of eight million people--a very small market indeed compared to the big language markets: the English, Spanish, German or French.

RJA: That's a major point. You deal primarily with relatively short runs. How do you manage to turn out a quality product with a low cover price and a short run and still make a profit?

LB: The cost for making the first copy of a magazine is the same all over the world and if you have only eight million people to sell to, the runs, as you point out, are not very large.