Hubert Burda Media Blazes a Digital Trail

The German publisher of the magazine, Hubert Burda Media, takes a similarly practical approach to its own business. While there is plenty of fashionable talk in the publishing industry about the digital future, Burda has already stitched together a strong Internet arm.

Burda, which publishes more than 250 magazines worldwide, including the German editions of Elle, InStyle and Playboy, reported last week that its sales had surged 12.6 percent last year. And while the company is still best known for print publications like the German newsweekly Focus and the celebrity magazine Bunte, digital sources account for fully half its revenue.

Unlike many publishers that have tried to build digital units on the back of existing brands, Burda has looked to new businesses, many which were started from scratch or added through acquisitions, and some of which are far removed from the company’s traditional line of work. Those include social networking, Internet dating, travel reviews and even cat food — sold online, of course.

“We think differently about our value proposition,” Paul-Bernhard Kallen, chief executive of Burda, said during an interview at a technology conference the company convened in Munich last week. “You can’t take your existing properties online, but you can take a way of thinking online.”

That way of thinking was set out by the company’s namesake, who ran Burda from the late 1980s, when he prevailed in a power struggle against two brothers, until 2010, when he retired at the age of 69. Hubert Burda has handed over day-to-day control to Mr. Kallen, a former McKinsey Co. consultant and chief financial officer, and has handed stakes in the business to two of his children, who are in their 20s, but keeps a watchful eye over the business.

Mr. Burda is a regular at the World Economic Forum in Davos, Switzerland, was trained as an art historian and is married to one of the best-known actresses in Germany, Maria Furtwängler. He brought his eclectic interests and cosmopolitan flair to a family-owned printing business that was long based in the provincial town of Offenburg, in southwestern Germany.

Offenburg is far from the catwalks of Milan or Paris, and magazines like Burda Style, formerly known in Germany as Burda Moden, are steeped in the stolid, thrifty values of small-town Germany. Burda may have its roots in knitting, but Hubert Burda did not stick to it. He was an early believer in the Internet, investing in Europe Online, a European version of America Online, in the early 1990s. That venture failed, but subsequent Burda Internet investments have done better.

“They created business models and did pioneering stuff that others didn’t think of,” said Steffen Burkhardt, a media researcher at the University of Hamburg. “They understood that in order to generate revenue for their journalism, they needed to have something to sell.”

Like other publishers, Burda operates Web sites linked to its print titles. But in Burda’s portfolio, those play a secondary role. The real money is in new sites that often do, indeed, have something to sell.

Take Zooplus, a Web site about pets. Zooplus lets people post pictures of their puppies or seek advice about a vet. It also lets them buy dog food or cat litter — and Germans have been doing so in droves. In 2011, Zooplus generated €245 million in sales, a sizable chunk of Burda’s €2.2 billion in total revenue.

“We are not shy about e-commerce,” Mr. Kallen said. “Our theory is, follow the consumer to the point of sale.”

Other Burda Internet businesses have a similarly commercial orientation. They include HolidayCheck, a competitor to TripAdvisor; Chip, a German gadget review site; and ElitePartner, an online dating service. Last year, Burda took a majority interest in Xing, a social network for professionals that has more members than LinkedIn does in Austria, Germany and Switzerland.

Article source: http://www.nytimes.com/2013/01/28/business/media/hubert-burda-media-blazes-a-digital-trail.html?partner=rss&emc=rss