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Mags See ’Net Future

PARIS — The Internet bubble may have deflated, but it hasn’t gone away and still will impact the way media is delivered in the future.<br><br>At least that was the consensus among industry executives at the two-day 34th World Magazine...

PARIS — The Internet bubble may have deflated, but it hasn’t gone away and still will impact the way media is delivered in the future.

This story first appeared in the May 30, 2003 issue of WWD.  Subscribe Today.

At least that was the consensus among industry executives at the two-day 34th World Magazine Conference, attended by some 900 media executives from around the world. The continuing potential of the Internet was the subject of a panel discussion here Tuesday moderated by Axel Ganz, president of Prisma Press and president of the international magazine division at Gruner + Jahr, part of the Bertelsmann media conglomerate. Victor Ganzi, president and chief executive of The Hearst Corporation, Arnaud Lagardere, chief executive of France’s Lagardere media group, and Germany’s Bernd Kundrun, chief executive of Gruner + Jahr, participated in the debate.

“We are probably at the end of the beginning of the first phase [of the Internet],” said Ganzi. “Yet, at the same time, we shouldn’t think the Internet won’t be an important piece of what we do.”

The problems the Internet posed for publishers are well documented, including its failure to produce substantial ad revenue and subscription fees. Nonetheless, its possibilities as a distribution platform have yet to be fully explored.

Ganzi suggested that ’Net publications must provide content that its sister print publications or television shows don’t provide. “You need new content,” he said. “You can’t put up existing content.”

At Hearst, the Internet has become a tool for brand extension. Ganzi cited O: The Oprah Magazine as a successful template, because of its support by Oprah’s TV show and Web site. “This is integration,” he said, adding that Hearst has begun rolling out Cosmo TV, linked to its Cosmopolitan magazines and Web sites, in Spain and Latin America. He said Hearst also was considering launching Cosmo TV in the U.S.

Kundrun admitted that Bertelsmann initially believed the convergence of medias would signal the death knell of print. Bertelsmann was one publisher that rushed headlong into the new technology with an aggressive expansion strategy formulated by former chairman and ceo Thomas Middelhoff, who was replaced last year in a management shakeup, partly brought on by losses in its Internet division.

“But most people still prefer to read newspapers and magazines in the print form,” Kundrun said. “Internet has supplemented, not supplanted, traditional medias.”

Nonetheless, Kundrun said there are exceptions, most notably music, which consumers have rampantly downloaded — mostly in pirate form. “I think music and video will be important products on the Internet,” he said.

Arnaud Lagardere called the Internet a “bridge between content and strong brands.” Yet he said the ’Net would not determine which companies “win in the next five to 10 years. The companies that will dominate will have their own content and great brands. Publishers with the ability to address communities and segmented audiences [will have the upper hand].”

Although Lagardere underscored that Internet applications have hardly run their course, and that broadband technology will most likely shake up the sector in the near future, he believes print will never die.

“I think we’re talking too much about the Internet,” said Lagardere. “I think we need to concentrate on what we do best, which is magazines.”

“Convergence as one imagined didn’t pan out,” summed up Ganz. “New technology didn’t create products. To make products, one needs consumer demand. Convergence has created more desire to create synergies and new content. TV and Internet are opportunities [to grow brands], but it’s only the right content and quality that will attract new consumers.”