The acquisition was for an undisclosed sum, which has been widely reported as being a nominal figure of £1.
Vivat will continue to trade as normal and the publication of Reader’s Digest will continue without interruption and its high editorial standards will be maintained, says Mike Luckwell. Reader’s Digest will be operated in parallel with two other companies Mike owns: Simply Media TV Ltd and Screen One (CI) Ltd. to form a small group.
Three years ago Mike stepped in to do a Corporate Turnaround of Simply Media. Within a few months Simply was trading profitably. Screen One was established to handle Consumer Sales whereas Simply handles TV and Movie DVD Rights Acquisition and Trade Sales. The Corporate Strategy was changed to focus tightly on the provision of Goods and Services to the over 50’s. The part of Simply that interested him most was the division that sold a carefully tailored selection of products, mainly DVDs, to the over 50’s via Internet and Mail Order. This division had a large, active, database on which growth could be based. Since then Mike has acquired and consolidated the databases, and most of the business of, two ‘Distressed’ companies catering to the over 50’s: Music & Memories and Webb Ivory. Database Management Systems is a cornerstone of the group being built up.
Reader’s Digest is the first major brand name Mike has acquired to bolster, and broaden, the group’s activities. With RD comes the largest database acquired so far, over one and a half million Names, to bring the group’s total to 2.7 million Names. Currently only 9% of these are recent buyers of the group’s goods and services so there is significant potential to further develop and utilise those large databases. RD also brings with it Financial Services Marketing which is an important new strand which will be cross fertilised across the other companies within the group.
Major steps have been taken to develop the website side of the business and establish a strong IT team. According to the company, 70% of people over 50 use the Internet. This may have been stimulated by parents and grandparents wanting to use Facebook to know what their family are doing and keep in touch with them; but many quickly broadened their horizons and began to ‘surf’ and enjoyed the experience. Some of the over 50s initially feared giving their credit card details over the Internet but Media coverage, and familiarity, is overcoming that and the over 50s already represent 12.5% of all sales made on the Internet; a 25% increase in the last two years.
The Mail Order sector, DVD Sales, Catalogues and Magazines are all generally perceived as being in decline, yet the sales of Simply and Screen One have risen consistently for the last three years. RD too is targeted to undergo growth stimulated by synergistic expansion of the group as a whole. A move to Digital customer acquisition and Digital delivery however form an important part of the strategy for future growth.
The over 50’s represent a huge, largely untapped, and much ignored, sector. The vast majority of people in advertising are young and look down on this demographic, says Mike Luckwell. They just don’t want to cater to it and have a derogatory, or denigrating, approach to it and indeed little knowledge of, or interest in it. Only around 10% of the total advertising spend in the UK per annum is used on campaigns targeting the senior market, despite the fact that over 50s hold 80% of the nation’s wealth and have a 30% higher disposable income that the under 50’s.
There are now over 22 million people in the UK over 50. This represents over a third of the population.
Many companies using a traditional approach to making sales, and providing services, to the over 50’s have seen a steep decline. Some companies have not moved quickly enough to accommodate the behavioural changes taking place in that demographic. This has created opportunities. Mike’s view is that many companies need to be re-modelled to cater for the ‘Frisky over 50’s’ group which is getting younger in attitude and behaviour every year. He is currently actively looking to purchase companies in ‘Distressed Situations’.
Mike says: “SAGA cleverly focused on Holidays and the Financial Sector for the over 50s but now has a finger in many pies. Today it has annual sales running into hundreds of millions and that merits a bit of competition since it’s tough to name another big, analogous, success story. This acquisition of RD is important to the growth of what is at present still a small group with sales of only £20m or so in the coming year but … watch this space.”
