So why did I buy back my magazine? It's all about risk
Is William Cash mad to plough his fortune into print? Now is the time to invest, he argues
Monday 24 August 2009
Media analysts might think I'm mad. Just over two years after a seven-figure deal in which I sold a 67 per cent stake in
Spear's magazine, the wealth management consumer title I founded, I've bought the title back. The buyout has required me to mortgage my house to raise the capital to produce a title that costs £25 per issue and largely relies for revenue on advertising and events sponsorship – mainly from the badly bruised financial services and luxury goods sector.
We have to get out the autumn issue before the annual Spear's Wealth Management Awards at Christie's on 14 September – the Oscars for the financial services industry, if I say so myself. Lack of time to relocate has forced us to operate temporarily from my flat in Holland Park, west London. The editor's desk is my wife's Nicky Haslam kitchen table. The rest of my furniture has been put into temporary storage near Wolverhampton and 12 desks and computers have been installed for a fortnight's production slog.
So why am I taking such a risk at a time when traditional media is in a downward spiral, financial magazines such as Business Week are being sold off for £1 and even the mighty Condé Nast has had to pull the plug on its glossy business title Portfolio?
The answer to why I'm betting the farm on Spear's is that for media entrepreneurs there has never been a better time to be taking risks and investing money as today, when the whole media landscape is about to change. In the next two years, "premium" paid-for online content will become the normal business model for media brands. Those leading the way will be niche titles, exactly like Spear's, that provide invaluable specialist information readers cannot get elsewhere.
The idea behind Spear's is to turn ourselves into the Michelin guide of wealth management. This is a media sector that has been curiously ignored by the UK for many years but which now, with the credit crunch making many wealthy individuals desperate for independent and objective advice as to how to hang on to their cash, is suddenly booming.
The Financial Times launched FT Wealth as a supplement (two years after I founded Spear's) and top private banks such as JP Morgan and Pictet have come to us to publish glossy supplements about their wealth management services. These are read by our 30,000 readers of high net worth, as well as first-class passengers on British Airways.
Spear's has our Power Indexes in each quarterly issue, ranking and rating the top 100 individuals in each wealth management sector: asset managers, private client lawyers, private bankers, tax and trust advisers, accountants, security firms, art advisers and family offices. It is perfectly positioned to be a pioneer in the paid-for content revolution, as we know that high-net-worths (many of whom have lost all trust in their bankers and £550-per-hour advisers) will very happily pay £100 a year to have access to our lists of the top performers, saving themselves a fortune in so-called "beauty parades" and advisory fees.
Let's say a high-net-worth entrepreneur, based in Marbella, is worried about the motives of his daughter's new fiancé and wants him to sign a pre-nup fast. As a reader of Spear's he will already know pre-nups are now as good as binding in the UK.
Instead of having to fly back to London to interview various lawyers, he – as a premium subscriber – can go online to spearswms.com and immediately conduct a beauty parade of up to 20 pre-nup lawyers that we have ranked according to their performance and our own interviews, along with seeing a three-minute exclusive video (another form of revenue for us) of them web streamed on to our site. He doesn't have to leave his villa.
At the end of this year, we will compile the 1,000 or so names of the top wealth management performers across all sectors and publish a Debrett's-style directory for £100 as an invaluable resource for wealthy individuals and the private client industry. Naturally, most of those included will want to buy a copy, even if it is just to leave it lying around at home.
The credit crunch is an opportunity for brands that move away from advertising into other revenue streams – in our case events, subscriptions, paid-for content, conferences, debates and books. Had the golden age continued, we would just be taking the low-hung ad fruit and not building a real business driven by our exclusive database of 50,000 wealthy Britons – from rock stars to royalty, entrepreneurs to hedgies – that luxury brands and financial services are desperate to access.
When Gordon Brown declared war on banking secrecy at the G20 summit, his words sent my pulse soaring with excitement. By threatening to blacklist such traditional tax havens as Monaco, Switzerland and Liechtenstein, he instantly created a whole new commercial marketing opportunity for lesser known "offshore centres" such as Panama or the British Virgin Islands to market themselves (through advertising or special £50,000 supplements) as an alternative and safer off-shore banking location for the tax-conscious rich (our readers).
I started the magazine in 2005 partly because the FT, while brilliant in so many ways as the paper of record for the financial sector, was too mass-market to talk directly to a new, wealthy audience whose financial and personal needs were uniquely different. I realised we were on to something when we sent out the pilot issue of Spear's with the Annabel's magazine, read by the 10,000 members of that exclusive Mayfair club, and I got a call from a very wealthy but stressed member of Annabel's. "My housekeeper has mislaid my copy of your new wealth magazine," he said. "I was just reading a very interesting article about why not to get divorced in London. Can I send round my driver to pick up a new copy? Make that six, as I want my friends to read it too."
Half an hour later, a sleek Mercedes S-class pulled up outside the kebab shop above which we operated, and the chauffeur came to collect the copies. I have no idea if we saved the caller a fortune, but I like to think we did.
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