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Future Tense: Bauer's Paul Dykzeul on the power of the portfolio, the dangers of PR and doing more with less

In an ongoing series, StopPress talks to a range of newsmakers to find out how those trying to shine lights into dark places are keeping their own lights on and whether commercial realities are leading to editorial compromise. Next up, Ben Fahy talks with Bauer Media's chief executive Paul Dykzeul.

September 8, 2015 | features

Paul Dykzeul

A few months back at the MPA conference, Bauer Media's chief executive Paul Dykzeul made mention of a visit to Conde Nast in New York, where he was told one of his favourite magazines, the New Yorker actually lost millions every year and was basically propped up by the cash cow that was—and is—the September issue of Vogue. His point was that the company felt it was a title worth subsidising because its high quality journalism served an important social and intellectual function—and keeping it going, in turn, reflected well on the company. And while the plaything of the media baron is increasingly rare these days, his concern is that the publicly owned media companies that dominate the market today simply don't think this way or value products like that. Bauer is a private company (famously private, in fact). So are its news and current affairs titles The ListenerNorth & South and Metro in a similar category? 

“That does not exist in this company,” says Dykzeul. “I wouldn't get away with it … The truth is that there are titles in the building that don't make anywhere near what the other titles do. It's not cross funding, but they play a different role in the company. They say something about what we as a company are and what we believe in. … The range of magazines that we do is wide and varied. And we treat them all independently.”

The Bauer family, which started its business in Germany in 1875 selling business cards and now has revenues totalling $2.6 billion, according to Forbes, doesn’t traditionally operate news and current affairs magazines in other markets, preferring instead TV guides and mass market titles focused on female audiences, as well as music and pop culture-focused media brands like Q, Kerrang and Empire. But “that doesn't mean they don't understand them,” Dykzeul says.

“There was a period when we were owned by the private equity guys. And they were saying ‘shut them all and just keep three’. They didn't get the portfolio, they didn't get cross media, they didn't get cross platform, they didn't get cross magazine. They didn't understand a lot of those concepts. But the Bauers are very good at that ... The acquisition [of the APN titles] is a really good example. Did we really need to buy another weekly women's magazine? It's been an inspirational thing for us.”

Word up

In a media world that seems to be increasingly visual—and, specifically, audio-visual—and at a time when obesity of the mind means we're flitting about without really paying full attention to anything, focused reading increasingly seems to be considered a luxury, something Bauer referenced—and then tried to change—with its Woman's Day 'Nobody Die' campaign via FCB

“We're like seagulls now, we swoop around and we go down and we pick up a little bit. We don't feed, we scavenge … I know I talk to my friends about changing reading habits and one of the most critical things that I pick up is the number of people who say I get halfway through a story and that's it.”

And while Dykzeul admits he may be showing his bias—and may be lumped into the old fart category—he still thinks reading is extremely important for understanding.

“I'm such a passionate reader. I've got a huge library, that's the great love of my life, apart from my wife of course. I honestly don't believe that you can grasp concepts, and you can’t get a really deep understanding of something unless you've read it.”

Those who love podcasts or documentaries might beg to differ (and reading is so broad it can encompass anything from Justin Bieber's tweets to highfalutin poetry). But he believes reading is crucial for opinion forming in children. And the danger of having them Google everything is that the thinking will be done for them.

“Reading teaches them to be inquisitive. It teaches them to wonder. It teaches them to imagine. It teaches them to really start to think 'why is it like that?' This is what worries me about the internet. The internet is so easily manipulated these days. I was reading a story recently about a teacher in America who got kids to do a 1,200 word essay on evolution. The American religious right have eventually taken the top position. There were 42 children in the class, and no one mentioned Darwin. Darwin's just been removed.” 

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Telling tales

Those who tell the stories supposedly rule the world, although, at present, it actually seems more accurate to say those who distribute and index the stories rule the world. Facebook, arguably the world’s biggest media company, doesn’t create any content. Neither does Google. But they’re raking it in on the back of their massive networks—and, in many cases, on the back of those creating content for that network. And many media owners, particularly legacy companies trying to adapt to the digital age, are struggling to keep up and being forced to reconfigure their businesses. 

So does a single salty tear run down his cheek as he looks back at the editorial resources that were available ten or 15 years ago?

“We don't have a lack of resources, but we've got fewer resources. You've got to be clever. There's no doubt that in those halcyon days we were all pretty bloody inefficient. Everyone had PAs, we were indulged in every way. We weren't running efficient businesses. Media has learned a lot of very painful lessons as a result of having to be a hell of a lot more efficient … I think you can argue that we were a bit lazy and the money just rolled in the door. It doesn't any more, but that doesn't mean that it's less enjoyable. I still enjoy it. I still love it.”

When that word ‘efficiency’ is bandied about in media it’s often a corporate euphemism for staff cuts. In New Zealand, NZME, Fairfax, MediaWorks and TVNZ have all been riding the seemingly never-ending restructure roller coaster in recent years. And it often seems to turn into a vicious cycle: more editorial costs get chopped, the product suffers, people stop reading/watching, more editorial costs get chopped and on it goes. 

“Certainly in the time that I've been here we've trimmed back," he says. "But the trimming back has not largely been in the editorial team. We've said ‘okay you have an editorial assistant on a magazine, why can't an editorial assistant be across two magazines?’ You save one body. 'You've got a fashion editor, why can't we have a travel editor working across a travel hub?’ Those are the kinds of efficiencies that you can bring.”

Pretty much all media companies—and many other companies in other industries—are now being forced to try and do more with fewer people. Current affairs magazines like North & South and The Listener are resource hungry (he says Metro is still doing good journalism, but Bauer now considers it more of a city guide than a current affairs magazine). But even though he says people are one of the biggest costs in a media organisation, the real efficiencies have come about from negotiating hard on things like print, paper and photocopiers.

“That's what we're very good at. Because we've got a bit of size and scale you can do those deals. For example, with the print contract, we got better quality printing at a lower price because we did a really good deal with a terrific company. That arguably may have saved 100 people in another organisation.”

Bauer also asked its freelancers sign a new contract earlier this year to replace the handshake deals that had existed before. Dykzeul says it didn't decrease the rates it paid to writers and photographers, it just said that if it commissioned something, “it's ours, and we can use it across different platforms”.  

One contributor we spoke with said some were concerned that, like Bauer’s controversial contracts in the UK, contributors thought they could be held liable in the event of legal action. Others were concerned about the lack of definition between a submission vs. a commission in the contract, even though editors affirmed that a pitch for a story would be considered a submission. 

“If someone comes to us and says 'I have an idea for a story about Ports of Auckland and I've taken these photos', we pay for the one-use right of that. It is their story, it is their copyright, they own it. If we want to reuse it, or if we want to put it online, we’ve got to negotiate with them. If we say ‘can you do a story for us?’ we agree it's ours, and that's all it is. It's no more complicated.”

With Bauer’s drive for efficiency meaning it is increasingly sharing resources internationally (it might work for food, home and fashion, but sometimes it can go awry in other categories) and aiming to repackage its content into one shots and online hubs, Dykzeul says it made sense for the company and it was the contributor's prerogative not to sign the contract. Dykzeul says it held meetings with journalists and photographers to explain the contract and show them that there was "no bloody great sinister plan to make money out of them" and that it would back its contributors in court if it came to it. And he says a lot of them signed it straight away and, in the end, the vast majority signed.

Spreading truth, destroying lies

With lifestyle, food, fashion or special interest titles, editorial and advertising are generally able to co-exist fairly comfortably. But those two things have historically maintained their distance in news and current affairs so as to protect editorial integrity. With the rise of native advertising and the concessions being made by some publishers, the barriers between church and state do seem to be eroding, but it's a very hard balance to strike and the more it swings towards commerce—and the more desperate publishers become for revenue—Dykzeul says the less likely media companies are to fund the important, difficult stories that need to be told.

“There's a point where you go ‘I would love to do a story on Patagonian Toothfish, but I know that if I do that I'm going to earn the absolute ire of the fishing industry. Do I really want to have that fight?’ That is where we are heading into dangerous space. We've got more public relations people in New Zealand now than we've got journalists … I read recently that the American military has 30,000 public relations people on its books. And that worries me enormously.” 

A few years back I attended a talk by investigative journalist Seymour Hersh, who discovered the cover-up of the My Lai massacres in Vietnam and wrote about the mistreatment of detainees in Abu Ghraib, and he said the formula he abided by as a journalist was fairly simple: governments, corporations and their comms people are in the business of protecting information and journalists are in the business of finding it. But Dykzeul thinks the game is now rigged in favour of the information protectors through sheer weight of numbers. 

“I think we are being manipulated more than ever in history. I'm probably going to piss off a lot of PR people here, but the way a lot of them pitch their business is by saying you don't have to pay for media because we can get it for nothing. There's a lot of truth in that. The number of times you pick up the Herald and you see a PR release. We do it sometimes too and it annoys the hell out of me.”

And while he believes newspapers are in a much worse position than magazines because their “commercial model is profoundly broken”, he does worry about what will replace them if good journalism can’t be funded.

“You close your eyes for a moment and imagine that the only news you could get is from TVNZ. How dumb would we all be?”

He says this isn’t a case of him believing ‘Bauer is a wonderful company’ compared to all the others. It's about being able to get an in-depth, nuanced view on an issue. And it's something that he holds personally “very, very dear” because he believes its news and current affairs magazines “are critical and perform a really important role, not only in the New Zealand media space, but also in society”. He says it's pretty hard to sustain three current affairs magazines in one country, let alone in one company (in Australia, he says there are no magazines like The Listener) and the fact that it can, he says, is largely down the quality of our newspapers.  

“It's bloody important. Someone's got to be questioning politicians, business leaders and industry.”

And whether it’s the subjects of the stories or the advertisers paying to be alongside those stories, he says maintaining those high journalistic standards has led to plenty of run-ins over the years. But he says such robust responses to good journalism steel his resolve to do more of it. As the famous (albeit often misattributed) quote goes: “News is something somebody doesn't want printed; all else is advertising.”

“I hate to count over my years in the media the number of times that I've been threatened. I can tell you categorically I've never been frightened … That's a part of media, people make threats. And they're usually made in the heat of the moment." 

Dykzeul proudly says he’s been on both sides of the two biggest defamation cases in New Zealand. The win came against David Lange after a column in North & South by Jo Atkinson in 1995. That led to a change in the law after it argued that journalists had qualified privilege and politicians should be subjected to more scrutiny than normal members of the public. As for the loss, journalist Toni McRae took ACP to court for a Felicity Ferret gossip column that appeared in Metro in 1994 and they lost. 

“It's a very funny story I hesitate to tell, but one day I'll write about it in a book. I could have settled it for ... I think it was about $18,000, and it cost me close to a million.” 

So how far does Bauer push its writers and what protections do they have in place for them?

“We say all the things about being sensible. Journalists today are much more conscious of what they can and can't say. They know where the boundaries are. The policy here is if you think there's a problem, talk to counsel. There is no limitation on that. We don't say to them you've got 12 photocopies a week to use ... Also, you want to get it right. You don't want to defame someone unnecessarily. You don't want to get your facts wrong, and if you do get it wrong, fix it.” 

On the current

Dykzeul says two things collided to create the current challenges for magazines—and other 'traditional' media. The first was the GFC, which he thinks broke a lot of media habits, and the other was digital starting to play “a much, much, much more significant role in people’s lives”. And while many news and current affairs titles here and around the world are finding the going very tough, and mass market weekly magazines in general are being most affected by the array of free content now available on the internet, he says magazines are still performing very well in New Zealand in comparison to other developed markets—and particularly Australia. 

“The foundation stone is still the print business. And it's still a very, very good business. This is still a very profitable business.”   

He wouldn't discuss any of those numbers. And while he knows Bauer has to transition to digital, which it is doing now through the launch of its hubs (homestolove.co.nz soft launched recently and foodtolove.co.nz launches next week) and standalone websites, he says that it “isn't a business that is in such a mess of transition that the people in the business are not valuable anymore”.

“That's a sad message being delivered around the place. I'd be mortified if I was in some of these companies where people are saying ‘well, you know guys, things are moving on, and you're the dinosaurs’. Aren't they making all the money? I don't treat our people like that. Yes it is changing. Yes we've got to move in a different direction ... But I say 'you can be part of that, you all have a role to play'.”

But like the vast majority of legacy news publishers, the hard truth is that digital is a long way from making up for lost print revenue. He says it has been careful not to give away content from journalism-focused brands like The Listener (which came to Bauer with a paywall attached) and North & South. But, once again, he says one of the ways it is continuing to fund journalism is to look for efficiencies, because increasing reader revenue is unlikely in this market context. 

“[The Listener paywall] was done very badly, incredibly poorly. It was a disaster. It just didn't work, and it was never going to work. That doesn't mean it won't ever work. But we basically got rid of it. We've essentially said ‘look this is not going to work so we're not going to push it. We're just going to park it and we'll extract ourselves progressively from it’. What we've done is we've improved the printing. We've improved the paper. And we're selling a lot more ads. When we took it over it had an average of two ads an issue. We're way above that number. We've improved the yield we're getting. That's how we do those things. The reality is I never for one moment thought that we would wind up selling a whole lot more copies... We haven't worked out exactly what we're going to do, but it's not critical to us." 

In other areas, he has changed his tune over time with regards to giving away free content, with Metro often publishing stories from the print version online after the issue comes off sale, Home launching a website and, following Australia's lead, the launch of its content hubs around fashion, food and home. 

"The other areas where we're creating these vertical pillars like food, and the home area, we'd be naïve to think that somehow producing magazines with food content in them, like Australian Woman's Weekly, Woman's Day, Taste, etc. that somehow we're going to absolutely swim against the tide and charge people for this. That's been a revelation for me as well because that was always my great fear. I felt strongly about that. I don't feel as strongly about that now, and I'm allowed a change of mind.”

He says he’s encouraged by what Bauer and other local publishers are doing online at the moment and he says they’re starting to make some reasonable money (it’s thought Bauer has done a big deal with Countdown and other advertisers for the upcoming launch of its food hub).

“I keep clinging to that. I think that we will find ways of making money … If you write a terrific story for Home magazine, and it does well in the magazine, it will wind up online. I see no difference. It's just another delivery mechanism. It's like saying ‘okay I'm going to sell my magazines in Countdown, but I'm also going to sell them in New World. That's how I see it." 

Dykzeul says the perception that it has been slow to hit the digital space is fair. But he says there is a very valid reason for that.

“I know that a lot of people thought that I was a luddite on that issue, but the truth was there wasn't much we could do about it because of our relationship with Channel Nine [and MSN]. So there is an element of us playing a bit of catch up football here.”

That's happening now, with some big investments in digital. And there are already some success stories. He points to its Trader Group as an "absolutely extraordinary digital business" that doesn't often get mentioned.

“We've got programmers here that are doing programming now for the UK. It's a very interesting business. If I thought that I was managing a hospice, I wouldn't do it. We're not keeping the patient warm here.”

But he still harbours some concerns and he believes there is a blinkered view of digital and far too much wastage.

“When you hear clients say things like 'we've been instructed to spend 50 percent of our money on digital', to me that is a very strange thing to do … I think there is an extraordinary amount wasted. I think you really do fall into that trap of winding up everywhere and nowhere. It's too much of a scatter gun in lots of ways. I think if I was a client I'd be really asking those hard questions."  

Media matters

Every time I’ve talked with Dykzeul, he’s been extremely upbeat about working in the media. The numbers don’t lie, of course, and there are plenty of challenges facing the magazine industry, although Bauer has done well by investing in research capabilities and targeting TV advertisers to show how much more efficient advertising in magazines can be. But one of his ambitions is to get more media executives together to talk about the positives of working in this business.

He thinks there's a real lack of passion among media executives, and, just like the modern agency, a lack of characters. 

"People in the media should, in my opinion, hold our heads a bit higher. We should be more proud of what we do than we are. We're a bit apologetic. The Rupert Murdoch thing has affected us all a bit. But we do play a critical role in society.”

Many argue that media can also play a damaging role in society. Fearmongering, sensationalist news coverage, celebrity worship, body image issues, privacy violations from the paparazzi (Dan and Honor Carter recently complained after photos of their son Marco appeared in Woman’s Day). And many believe the sugar rush of big sales—or, in the online realm, lots of clicks—eventually leads to more of the same. It’s a difficult balance, because it's obviously content that a lot of people enjoy. And, as Fairfax’s Simon Tong believes, it is possible to have a mix of light and shade. But too much of the fluff can harm a news brand. And the perception of the media is, in general, already one of distrust.

Rupert, a play about the rise of Rupert Murdoch that included characters Dykzeul had actually worked with in the past, showed a newspaper man who gave the people exactly what they wanted—tabloid fodder—and didn’t tend to let the truth get in the way of a good story. And this, Dykzeul says, is what media barons have always done well. 

“They might not be the slightest bit interested in it, but they know exactly what it is the audience wants ... The Romans started graffiti [and, according to MediaWatch, olive oil companies even sponsored gladiators, so that impulse has been around for a while too]. People want to delve into other people's lives. It's a bit of voyeurism and escapism. To have some self-righteous prick sitting there saying Woman's Day is a pile of shit, for them, maybe it is, but there are hundreds of thousands of women out there who really enjoy reading those kinds of magazines … I really believe, passionately, that it doesn't matter what you read as long as you're reading something. Don't be judgmental about what other people are reading ... Why do people read Lucky Break? You look at it, and you may raise an eyebrow, but every single week 19,000 people go out and buy a copy. Why do we need to be judgmental about that? If someone wants to sit and watch Dancing With The Stars and that helps them relax and enjoy the evening, fine. I wouldn't but that doesn't mean you shouldn't.”

He admits it has probably gone too far at times in the celebrity space, both in terms of mentioning advertisers in editorial and with some of the stories it has run.

“We have probably pushed the boat a bit too hard … We've implied that someone is on the verge of tears and in fact that's probably not the case. Someone's interviewed their typewriter.”

It's generally accepted that there's a degree of creative license and truth stretching at play in such titles. But he believes you can get punished for that. 

“I think that's where the danger is. I genuinely in my heart of hearts believe that the minute someone says ‘oh Jesus’, that's the next time they go to the checkout and they go ‘do I really need this?'"

So does Dykzeul have a leg to stand on when he criticises the quality of newspapers or news on TV while at the same time publishing gossip and celebrity-focused magazines? Isn’t that slightly hypocritical?

“I think that it probably is.”

But he says it’s all about knowing what you are. TV news is not “the fountain of all knowledge” it purports to be, neither is it, as the mourners of Campbell Live seemed to believe, the last bastion of investigative journalism. And Woman’s Day is not The Spectator, which Dykzeul reads on his commute to Waiheke, despite the danger of being perceived as "a snobby prick". 

“I think there is absolutely nothing wrong with having a business which is producing a magazine like Woman's Day or Woman's Weekly, Trade a Boat, The Listener and North & South. I'm extremely proud of it. In the same way that I'm extremely proud of the team at Property Press. It’s an extraordinary business and it does not produce one editorial page.”

TV networks can get away with running their serious news and current affairs alongside shows like, for example, Cats Make You Laugh Out Loud, which, given its success in Australia, will presumably end up here soon and is undoubtedly a looming sign of the apocalypse. Major magazine companies can too because there are a number of brands operating under one umbrella. But because mainstream news brands have been forced to look for scale online, he says they often find themselves being forced to run everything from serious stories to celebrity tweets under one masthead. And that can be damaging for credibility. 

 "I'm extremely competitive. The truth is I still look at the Herald every morning. I do. And I think the Weekend Herald is terrific … But I genuinely do wish that the newspapers had thought a bit harder about entering the free content space as quickly as they did. I think that every senior newspaper executive would acknowledge that that was something they wish they had thought a bit harder about as well. The truth is it's too late ... If I was the Herald, I would be working much, much harder at the weekend newspapers. I think we're going to see three-day a week newspapers. I think that would probably be a fairly brave move, but I think it probably would a reasonably sensible move. Then supplement the difference through the web space. I suspect that's probably where it will all wind up.”

Down south, the Allied Press-owned Oamaru Mail has recently done that and gone weekly (and free). And a number of papers overseas have also focused on their weekend editions. 

 

Good fit

While Woman's Day and some of the other titles are loaded with display ads, the current affairs titles aren't. Advertorials are a common sight in the pages of Metro and North & South. But he has concerns about the rise of native advertising and the attempts to “disguise and deceive”.

“You're rewarded by your readers, because they are paying for what they're getting. The minute you disrespect them, they won't reward you any more. I feel very strongly about that. Now clients, agencies, etc. will cajole, threaten, push you into this space. There's a point where if you think it's going to damage the integrity of your brand you do so at your peril. These readers are smarter than perhaps the industry over the years have given them credit for. They can see through it.”

He says there’s an argument that says a younger audience is more forgiving in that space, but younger people aren’t really reading magazines (even though Buzzfeed just announced it’s planning one in Australia, and the likes of Airbnb, Grantland, Pitchfork and Rookie are lovin' the paper too).

So is writing about food, home or fashion considered journalism? It’s generally not speaking truth to power. But he calls it service journalism because “if you're thinking about building a new home you suddenly become more interested in that”. 

Because magazines are often closely aligned to people’s interests, whether it’s Kim Kardashian's latest selfie or the plight of the Patagonian Toothfish, he still sees magazines as an indulgence. Other printed products are too. As an example, he points to research on cookbooks that shows people never make more than 3 or 4 recipes out of each one, yet they keep buying them.

“It's an experience. It's an adventure. I think that's what magazines do. I think what they do is they take you into this next world. That luxurious sense of flicking through a magazine. Taking in all its parts, having a dip in there ... I think we read magazines in a very different way to the way a newspaper or a book. We dip in and out, and that's why I think they do have a good future.”

And in those areas of real passionate interest—which he says includes good journalism—he thinks "people will be prepared to pay". And Bauer will continue to pay to produce it.     

  • If you would like to suggest someone else to talk to for Future Tense or would like to submit an opinion piece on the topic, email editor@stoppress.co.nz

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