Soutar was editor of the Emap magazine For Him when it was re-branded as FHM and sales soared from 35,000 to more than 500,000 over the following three years.
The Nuts effect
As editorial director of IPC, Soutar was a key figure in the launch of Nuts, the young men’s weekly that majored on pin-ups and football, sparked a circulation war with Zoo and took men’s magazines resolutely down-market.
“Nuts and Zoo were so successful that it knocked the existing men’s market out of its normal orbit. I have always believed that all magazine markets have a nice balanced ecology that requires publishers to hold their nerve when something happens at one end of the market,” insists Soutar.
Many publishers did not hold the line and instead “became tainted” with a much more adolescent, down-market view of the world.
“What Nuts and Zoo did was to drag the whole market with the exception of some up-scale titles like GQ and Men’s Health. Everything else chased the sales so the middle market disappeared entirely,” Soutar believes.
As a result FHM, for instance, began a circulation slide which has recently taken it below 200,000.
The Freemium model
The magazine executive appreciates the irony in the situation. The carnage, coming at the same time as the success of more specialist titles such as Top Gear, helped to create the space for a weekly free magazine such as ShortList.
The magazine markets itself as being “for men with more than one thing on their minds”.
The man behind the tag is ShortList editorial director Phil Hilton who worked closely with Soutar on the development and launch of Nuts as the magazine’s editor.
They call ShortList, and sister publication Stylist, launched a year ago, “Freemiums” – free premium publications.
“You give it to people for free and you charge advertisers for the privilege of the kind of reach and the quality environment and the quality of audience. It’s free not cheap, so it’s Freemium,” says Soutar.
He believes that when you launch a new magazine you have to describe what it is and what its values are.
In the case of ShortList, that means there is “no profanity, no nudity and there is no gutter journalism”.
By any standards ShortList has been a success story.
More than 507,000 copies are distributed every week across twelve UK cities. In the past year, despite recessionary pressures, the start-up publisher has achieved an underlying profit of more than £1 million on revenues of £11 million. Revenues are expected to reach £15 million in its current financial year.
“The free model works. The proof of the pudding is profitability. ShortList is profitable on an annualised basis,” said Soutar who has recently expanded into larger premises from the cramped building where they launched the magazine three years ago.
Until the move, they had to hold their weekly executive meetings in a nearby café.
In his final years at IPC, Soutar had his own editorial “sandpit” where new ideas were developed and four weeklies were launched in three years – Nuts, Pick Me Up, TV Easy and Look.
With no more launches in immediate prospect, Soutar offered to carry out the same role for IPC but outside the company. No agreement was reached so Soutar and his business partner Tim Ewington set up as consultants before launching ShortList.
“We felt there was a real powerful need for a men’s magazine you could be proud of and also there just wasn’t an intelligent men’s weekly. It didn’t exist,” says Soutar.
The French-owned Sport magazine had already paved the way and the existence of everything from Metro to City-AM had raised the profile of free publications with advertisers.
ShortList created a 500-strong team of merchandisers all over the country and also distributes through rail and airline groups.
Soutar says they also have a “secret network” of 20,000 urban workplaces where the magazine is distributed – places such as the staff canteen of merchant bank Goldman Sachs.
Sister title
Stylist was launched for career-minded women in October 2009 and is run through the same distribution network, though with the extra work ShortList is now able to sign up its merchandisers to exclusive deals.
“Both magazines get an extraordinary response from their readers, but I have to say Stylist is top drawer. Its readers are prosperous and have so little time in their lives and so much media choice but they get very, very passionate about Stylist,” says Soutar.
He would like to have another magazine to distribute on a third day of the week but missed out on the opportunity to buy the UK edition of Sport when it hit hard times just over a year ago.
“It came available at exactly the same time as we were bringing Stylist to the market. I had to make a judgment at the end of the day on the level of risk I was prepared for the company to go through,” says Soutar who with the benefit of hindsight is very aware of missing an opportunity.
If he had known how well Stylist would go, the company could have bought Sport but the ShortList executive insists the right decision was made at the time.
Instead it went to Belfast-based broadcaster UTV, owners of Talksport, and the magazine has quickly moved into profit.
In the nick of time
He may have missed out on Sport but most of the time Soutar counts his blessings and acknowledges how lucky he and his partner Ewington, ShortList’s strategy and development director, have been in their timing.
They managed to nail down most of their investment money in spring 2007, a matter of months before the meltdown in the global financial economy.
The investors include Pierre Le Grange of hedge fund GLG, publishers DC Thompson – Soutar started his career there as the 17-year-old beauty editor of Secrets magazine - Stephen Marx founder of French Connection, movie director Matthew Bond and the Morris brothers, owners of the Islington Design Centre.
Sir David Arculus, his chairman at IPC, chairs the company and is also an investor.
Then the recession effectively made it very difficult for anyone else to launch and ShortList has effectively enjoyed a free run without any direct competition – at least until now.
The established publishers were contracting just as ShortList, which now has a staff of around 85, was expanding.
“Not that we did it, but the rope ladder got pulled up behind us. That’s fortune. You can’t lay claim to that,” says Soutar.
Throughout its three years, the ShortList advertising graph has been continuously upwards, albeit it from both a low base and low expectations.
ShortList is having record months at the moment, according to Soutar, partly because the market is coming back and partly because of the company’s own momentum.
“M & S has gone from somebody who had never booked a page in either ShortList or Stylist to being one of our biggest advertisers,” says Soutar.
The publishing executive felt an important corner had finally been turned in September when Stylist published a special fashion issue to tie in with London Fashion Week.
“I can’t believe this is a free magazine,” was his reaction when he saw it.
Plans for the future
As to the future, the search for “a third day” publication will probably go on although there are no immediate plans to launch one.
The main development thrust is trying to find a way to take the ShortList concept to other countries.
“We are very interested in overseas expansion that will either come through joint ventures or licensing. We are exploring both of those. Really it’s about launching in the right marketplace, with the right people with the right deal,” the ShortList chief executive explains.
The company is also looking at digital services that have innovative technology or functionality and have the access to a prosperous audience in the UK.
He remains sceptical about the iPad, mainly because of the lack of data on Apple users.
“It’s difficult to sell that,” says Soutar who not only remains committed to the free model but has his own personal cautionary tale about the business potential of the iPad.
“The Times was always the newspaper I bought. I now have it on the iPad, so instead of paying £1 a day I now pay 30p. I am getting a great deal and News International executives are able to say: you see people will pay for content.”
Soutar is keen to avoid business like that, but believes when a large number of such tablets come out on Android he could easily start wanting to be on that platform.
When he talks about what has been achieved so far, Soutar’s eyes sparkle.
They took what was almost an academic hypothesis that free weekly magazines could work.
“Then you fill that with passion and belief and then you work your socks off and then this thing that started off being cold and logical becomes this living, amazing thing,” he explains over a coffee.
However amazing it may be, there will inevitably come a time when ShortList’s investors will want an exit and there could easily be a change of ownership, a floatation or a sale.
Until then, Mike Soutar says he plans to live in the moment and do the best work he possibly can to grow the company – something that should give him the widest possible choices.
“I have never had as much fun. I have no desire to see this particular journey end,” he emphasises.
