The interview: Mike Soutar, founder of Shortlist Media

His Stylist and Shortlist magazines generate a turnover of £11m. He secured £4m investment in one month. Who is Mike Soutar?

“To start off this was all accidental really,” Mike Soutar tells me in his honeyed Scottish tones.

We’re sitting in Shortlist Media HQ on Emerald Street (a familiar name to those of us signed up to the eponymous Stylist newsletter). The walls are covered in giant screen prints of Shortlist and Stylist covers, music flows through the light airy office and trendy twenty-somethings trot up and down the warehouse style staircases.

You see, Soutar had never intended on creating his own media empire when he left his position at publishing giants IPC Media.  He had already worked with some of the biggest names in UK publishing. After going straight into work aged 17 (he skipped university after failing to get into the ones he wanted), Soutar had become editor of Smash Hits, aged 23. His CV reads like any media mogul’s should, complete with stints at DC Thompson and EMAP before IPC.

After leaving IPC in 2006, he set up a consultancy called Crash Test Media with the intention of creating disruptive new media concepts and helping companies to reinvent existing brands.

But out of Crash Test Media sprung Shortlist Media, an entity which secured £4m investment in only a month, has spawned two hugely successful magazines, turned over £11m in the last financial year and distributes roughly 1 million copies of its titles every week. A happy accident, it would seem.

“When we worked on Crash Test Media, we used our down time to be our own nursery, and nurture interesting left-field ideas,” he explains. My eye is drawn to a huge screen print of notoriously disruptive photographer David Bailey hanging over Soutar’s head. No coincidence, I imagine.

Shortlist Media and its first title, Shortlist, were born out of two specific ideas.

“We were interested in the power of free. Consumer audiences had grown up with the internet and the expectation that they could and should have high quality entertainment for free. We wanted to see how the ‘Metro business model’ would work with consumer magazines.”

“At the same time,” he continues, “we were fascinated by the decline of the men’s market. Men’s magazines were hurtling downhill and our hypothesis was that the titles had alienated their market by focusing on down market, adolescent young men.” He’s referring to that seamless combination of sex and sport, I assume, thinking back to the likes of FHM, Nuts and Zoo.

Moving away from that style (despite having worked closely with FHM and Nuts in the past), Soutar set out to create a magazine that this generation of modern, professional men would be proud to have tucked under their arms.

How Shortlist almost didn’t happen

With a strong vision of what he wanted to achieve, Soutar and his team set out to create a prototype. Having created a compelling business case and “stress testing the model to destruction,” the team started to look for investment in March 2007.

Within a mere month, they had £4m in the bank from a range of investors that included movie-star Matthew Vaughn, founder of French Connection Stephen Marx, movie director Matthew Bond, Pierre Le Grange of hedge fund GLG, and DC Thompson, the Dundee-based publishing company that gave Soutar one of his first jobs.

“I’m a Dundee boy and DC is probably the biggest firm in my hometown – having them invest in my business was wonderful,” he smiles.

That was early 2007; you all know how the story goes after that.

“If we had been six months later I don’t think we could have done it. By September 2007 when we launched, everybody knew there was a recession coming. Everyone had started to pull back on investments.”

Had he waited that bit longer, securing cash from advertisers would have been an uphill struggle too. “It would have been difficult to get to the centre of advertisers’ schedules. During a recession, investments in the core titles stay and discretionary spend and the subsidiary brands just fall off the schedules as advertisers cut from the bottom.”

The birth of free consumer magazines

 Speaking of advertising, I wonder how difficult it was to convince advertisers of the virtues of placing ads in free titles. There has long been a battle between the reader buy-in magazine sales guarantee, versus the mass distribution of free copy. How can publishers guarantee attentive eyes on pages if the reader got the mag for free?

“We knew we were going to face scepticism from advertisers questioning the engagement of people with something they aren’t paying for, but there’s no compelling logic for that argument,” he says.

“For ABC1 audiences in their twenties and thirties, money is not an issue. It doesn’t matter to them if they pay nothing or £3.00 – what they invest is their time and focus. We were able to prove that very quickly for advertisers who started to see measurable response on their spend.”

A very precise targeting strategy backed up Soutar’s theory: a double whammy to ensure the magazine reached the right people.

“We are very focused in terms of where we distribute. We do so by hand in 13 cities up and down the UK and we’ve done deals with specific retailers, hotels and gyms, so we know we are reaching professional, commuting audiences.

“If you’re not in full time employment it is very unlikely that you will come across either Stylist or Shortlist,” he adds.

Sixty per cent of the 1 million copies of Shortlist and its younger compadre Stylist (launched in 2009) are distributed by hand, and 40 per cent through the aforementioned partnerships.

It’s a method that seems to be working. Marks & Spencer recently ran an ad for a pair of brogues in the fashion pages of Shortlist on the usual Thursday. According to Soutar, by Saturday they had sold out in all sizes, in all stores, and online. “In-house [M&S] dubbed the shoe ‘the Shortlist’.”

The covers of Shortlist and Stylist magazines

The covers of Shortlist and Stylist magazines

Shortlist and Stylist: Phoenixes from the media flames

The media industry is crossing uncharted and rather treacherous territory at the moment. Newspaper staff up and down the country have been subject to savage culls as the age-old commercial model of selling papers slowly grinds to a halt.

As we reported in January, the latest figures showed considerable drops in circulation across all national newspapers, adding to the list of loss-making titles.

Among the turmoil, the circulation of both Shortlist and Stylist has increased consecutively over the past three to four years.

Men’s title Shortlist was profitable after year three and Stylist after two. The company turned over £11m in 2010. Despite Shortlist’s profitability, it incurred losses that year due to the launch of Stylist. When the company’s next round of figures is released, however, Soutar expects a different outcome.

“The next round of figures will reflect significant profits as well as investment on the digital side of the business,” he tells me confidently.

The future for Shortlist Media: What will Mike Soutar’s next move be?

Investment in the digital side of the business won’t be a surprise for the 75,000 subscribers to Stylist’s spin-off newsletter Emerald Street, but this facet of the publication is something that has grown hugely for the company over the past year.

“A year and a half ago we weren’t very good at digital,” Soutar concedes. “We only had one person working with the digital offering. Now we have 14. Our capabilities, our performance and our confidence have been transformed.”

Last month Shortlist.com had 750,000 unique users, a huge leap up from 100,000 a year ago. Stylist.co.uk is hovering around the not too shabby 350,000 mark.

The digital side is clearly faring well, but I have to wonder about whether we will see a “third day” offering from Shortlist Media. Rumour has it the company almost bought free magazine Sport when it came up a few years ago.

“There are always mumblings about another title,” Soutar laughs. “It’s true to say that we are pretty much constantly testing and researching because we have ambitions to launch things.

“We were in discussions to buy Sport, but it came down to a choice between acquiring Sport or launching Stylist. In retrospect we could have done both, but it would have been too much risk for the business. When you’re planning to expand, every launch and acquisition is a calculated risk – if it wasn’t we’d be doing it all the time!”

How about international expansion? “Without going into too much detail, we have been very close on a couple of occasions to signing a deal to work with partners abroad,” he says.

“We are not a big enough company to make a move wholly on our own so it is all about finding the right partner. I said it this time last year - and I was wrong - but I’ll say it again: you will definitely see an overseas launch over the coming year.”

Disrupting the norm in media

With this kind of success under his belt, you might expect to find a rather more conceited person sitting behind the desk, but you don’t.

“I’ve always built on my mistakes. I’ve seen really great people working on something that goes downhill just because the market has moved away from it, and they’ve gotten really depressed. On the other side I’ve seen things fly and people walk around being incredibly arrogant because they think it was down to them,” he says.

Soutar’s experience in the industry has helped him create an extremely agile, insurgent start-up that isn’t afraid to take risks.

“I think it’s brilliant: these are free magazines, which means they are free from the conventions and rules that constrain paid-for titles. We are able to play with covers - we do amazing things on covers - and themes.

“Lisa Smosarski (Stylist’s editor) decided to take the enormous risk of creating an issue where every single piece of content was provided by the readers. It was a massive leap of faith and it delivered. She organised it and ran a campaign that galvanised our creative audience.

“No-body has ever done that kind of thing before. It doesn’t exist elsewhere.”

Who knows if Soutar and his media empire will have the revolutionary power of David Bailey, the great photographer hanging over his head. Soutar is certainly giving it his best shot. In an industry dogged with bad news, closures and job loses, stories like this are a welcome glimmer in the gloom.

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