Summit Notebook

Men’s magazines don’t work, says Lagardere

Men’s magazines don’t work and women only buy fashion magazines for the advertising, the finance chief of media giant Lagardere told Reuters journalists in Paris. Dominique d’Hinnin, CFO of the French group that publishes Elle and Paris Match, said the only two sections of the magazine market still growing were women’s fashion magazines and celebrity magazines, also read by women. “What doesn’t work is everything bought by men, so there is a global decline in circulation,” d’Hinnin said. “Maybe they don’t know how to read, maybe they are more tecchies than women — I let you draw your conclusions — or maybe they don’t expect the same thing from a magazine as women.” He said Lagardere had found that women, far from being irritated by magazine advertising, actually refused to buy magazines that didn’t contain plenty of ads. “Women’s magazines are one of the very few media consumers are buying because of advertising. You would not sell Elle or Marie Claire or Vogue or whatever if you had no advertising page in it. First, it would be very thin, and no woman would buy it because the reason why most women would buy such magazines is to see what is new — fashion, cosmetics, luxury goods — and they flip the pages and look at the advertising pictures. We made a test, you know, Elle in the U.S. is 400 pages thick and you have 50 pages of editorial content — 350 pages of advertising. If you remove the advertising pictures you don’t sell the magazine. It’s not like TV in this respect nor even like radio where advertising is something you have to have because you have no choice. With a magazine, it’s the opposite, at least women’s magazines, and that’s why the women’s magazine business is not really threatened today by the Internet, because you don’t get the same grade of pictures, you don’t get the same package.” He said cultural quirks, however, meant there were still exceptions to the rule, “mostly in Japan, where women buy fashion magazines for men. We have one of them, it’s quite strange. It’s a magazine about suits. You have 200 pages of grey suits. We never tried to export the concept.”

Martin Sorrell and garage anxiety

WPP Chief Executive Martin Sorrell is one of the world’s most powerful advertising chieftains, but he has a thing about garages.

Speaking at the Reuters Global Technology, Media and Telecoms Summit via videoconference from London on Tuesday, Sorrell expressed concern over new technology and ideas that young unknowns could be toiling on that could completely alter his business.

“I think it was (former Disney CEO) Michael Eisner who said: ‘Six or half-a-dozen PhD students in a shed in Silicon Valley is what worries me most.’ Well, what worries me is half-a-dozen students in a garage in China.”

Sorrell also dipped into a bit of numerology when he responded to a question about whether the world still needs four to six big advertising companies:

“There’s a sort of funny logic to the number four,” he said, noting the existence of four big accounting firms, four big consulting companies and ”four or five” major investment banks. “There is some sort of strange magic to four.”

Those PhD’s in the Chinese garage might be able to explain the magic behind the number four.

Other Sorrell revelations:

Neuf Cegetel wants to help consolidate French telco market

Neuf Cegetel, France’s leading alternative to France Telecom for broadband Internet access, doesn’t believe there’s room for as many as four networks in France in the long term and wants to continue to take an active part in consolidation, CEO Jacques Veyrat told Reuters journalists in Paris. “We have to consolidate the market. We know how to do that and we will continue to do that,” said Veyrat, who has just agreed to buy Deutsche Telekom’s French internet business, Club Internet. “I think four networks is too many and I think more consolidation is going to happen. I don’t believe in MVNOs as a solution in the long term.” Veyrat said he was keen to be part of fixed-mobile convergence and that there were three ways for Neuf to do this: by getting a licence — but not the UMTS licence that’s up for sale “because UMTS is too expensive for a legacy technology” — through integration with major shareholder SFR, “or do something else, whatever’s available”. Neuf is investing in delivering fibre to the home but Veyrat said it would be “a 20-year fight, street by street, home by home,” adding that he had the appetite for this. “I’m a civil engineer. I’ve been digging all my life. When I see a street, I want to dig.” Asked whether he was considering acquiring France’s main cable provider to speed up the roll-out, he declined to comment.

S.Korea NHN sees stronger Web, game sales

South Korea’s NHN, a 1999 start-up which quickly became the country’s top internet search portal with Naver.com, beating out Google and Yahoo, has received wide popularity and said it expects faster than expected growth for its revenue in internet search and games.

Expansions into other countires- NHN, which runs a game portal in Japan and a game venture in China, is now eying a share of the North American online gaming market. Its recently-launched U.S. game portal www.ijji.com hopes to win market share from leaders such as Pogo.com or Yahoo Games.

“Console games have dominated the U.S. market in the past, but now its becoming more an online game market. We’ve secured 3 million registered users in the U.S. during only nine months of trial service,” said CEO Chae Hwi-young, who initially started his career as a journalist in South Korea.

“We’re expecting a very exciting result from the U.S. business. If it takes off well, we can consider entering other english speaking regions.”

Shin Sat sees IPSTAR break even in 2008

Thailand’s only satellite operator, Shin Satellite, said on Monday it expected China and India markets to start generating significant revenues in 2008, enabling its IPSTAR satellite to break even at the end of next year.

“We’ll see some growth in the China sales in the second half. The biggest growth, the strongest growth will come early next year,” head of marketing Patompob Suwansiri said at the Reuters Global Technology, Media and Telecoms Summit in Seoul.

“Pent-up demand in China is tremendous. We have the cheapest bandwidth.” said Suwansiri, a graduate from New Zealand’s University of Canterbury. 

He said the company has collaborated with governments of emerging countries, such as Myanmar, to provide their residents in places with no telecoms infrastructure with phones, internet and television services. Regions such as Tibet and northern China would also need such support since many people are still living without connection with the outside world, he told Reuters.

Diller: When a no-comment just won’t do

IAC/InterActiveCorp CEO Barry Diller couldn’t wait to disclose the size of the company’s new marketing campaign to tout his Ask.com search engine and other new products at the Reuters Global Technology, Media and Telecoms Summit in New York — despite the best efforts of his own lieutenant.

“We’ve got a number of different ways that we’re going to use to tell people about Ask, its tools, why it should be used, why you should be thinking about making a change from Google … We’ve started a major television campaign that has just begun in the last — “

” — week,” Ask CEO Jim Lanzone piped up.

That’s where it gets interesting. Listen to the interplay between the two as Diller insists on disclosing the size of Ask’s 2007 marketing budget.

Viacom CEO: MTV and BET not like Imus

In the wake of shock jock Don Imus’ forced firing over racially and sexually charged comment, Viacom’s cable music networks — MTV, VH1 and especially BET — have been targets of scrutiny.

At the Reuters Global Technology, Media and Telecoms Summit in New York, Viacom chief executive Philippe Dauman responded to those critics by saying that while shows on Viacom’s networks are “not perfect”, he stands behind their shows, which he says are tailored to consumers desire.

“We are very proud of the programming we have on our networks. We are not perfect. To the extent that issues and culture develop over time, we certainly follow where consumers want to be.”

Critics have long charged that BET and MTV air sexually and racially charged — and often offensive — programs. Dauman counters by saying that he is “particularly proud of the direction that BET is going,” launching many new original programs, several family-oriented.

But he adds that some of the worst video that some have claimed were seen in BET never aired on the network.

“A lot of the discussion in this area is uninformed.”

* In the wake of merger and acquisition chatter in the media world, he doesn’t see any “large transactions” by Viacom, and said the company does not need to make any of the splashy acquisitions that some (unnamed) companies feel a “desperation” toward. * MTV will remain “a core brand” for a long time to come, as it stretches across multiple platforms, including the Internet, and mobile devices.

TI CEO: Texting Around the House

Texas Instruments President and CEO Rich Templeton is a big believer in cell phone text messaging – he has to be to keep up with his family. The company is the biggest maker of chips to power mobile phones, and his family is a big buyer, it seems. 

“In my house everybody texts,” he said at a Reuters Summit in New York. “That’s how i find out what’s going on – when texts arrive from the kids.”

Templeton also uses his kids as a test force for technology. “Take a look at what they do, and, most importantly, take a look at what they expect they should be able to do.”

Skyblog

The unprecedented outpouring of teenage angst on the web isn’t just a way for teenagers to make hundreds of new friends but provides a unique opportunity for advertisers to exploit them, Pierre Bellanger, CEO of French free blogging service Skyblog, told Reuters journalists in Paris. ”Never, so many diaries, so many articles, so many printed words, were online from a generation expressing itself. So you have to know that scientists, sociologists are exploring that mass of data because it has a sociological content of extraordinary value. And it has also an extraordinary value for advertisers. Because what we have spoken of is very profitable,” said Belanger, who runs Europe’s biggest blog. He said Skyblog’s extraordinary growth had happened despite being French-language. “When you look at the data you have very few sites with our growth, with one of the worst languages to speak on the internet, which is French… it’s like being — before Lonely Planet — with Hungarian tourist guides. So it’s strange.” Bellanger said he didn’t believe bloggers would mind if Skyblog linked up with a partner, as it wants to do — even a company like Microsoft. “I don’t think anyone cares, truly, about corporate ownership — I would say 99.9 percent of the audience. Like with MySpace for example. People were saying ‘Oh la la’ — in French — ‘it is the end of the world as we know it!’ But no, nothing happened. What I would say is important is that the brands of the 90s are no longer the brands of the new generation.”

Nokia solves market share dilemma

Just where did the market share go in the first quarter? Nokia CFO Rick Simonson attempts to solve the mystery during the New York-leg of Reuters’ Global Technology, Media and Telecoms Summit in New York on Monday.

His theory? Just wait a quarter.

“People had a mistaken notion that when Motorola announced a large decrease in market share, why wasnt market share taken by Nokia, Samsung, Sony Ericsson. The problem was it went into the channel and it takes time to work its way through. Those players with a superior product portfolio should take a lot of market share. Were pretty confident in saying that we will have (increased) market share in q2 versus q1.”

“Theres no reason why we cant have 36 (percent) or more market share and not achieve higher profitability.”

On Apple’s upcoming iPhone: –”The iPhone is interesting … It’s very much a validation of what were doing, a multimedia device that people will pay for N73 is a great example of that. The N95 is already out there doing many of the things people are talking about. – “U.S. consumers have not had a lot of choice to pick up higher-end feature-rich devices. –”Theyll bring some things to the table that people are responsive to. Theyre excellent in design. We can’t trivialize that.”