Spanish Magazine Publisher Bets Against the Crisis

MADRID — Andrés Rodríguez, the publisher and founder of SpainMedia, has the most at stake in the debut this month of a Spanish-language edition of Forbes, the U.S. business magazine, in crisis-hit Spain.

For Forbes Inc., the New York-based publisher of Forbes Magazine and his partner in the Spanish licensing venture, “their only risk is if the magazine really proves a failure, because that could hurt their image,” Mr. Rodríguez said Thursday during an interview in his office, inside what had been an abandoned printing-equipment plant. “I’m also betting my image, as well as my money and my work.”

SpainMedia is swimming against a tide that has driven many other Spanish media entrepreneurs out of business amid a recession and credit squeeze. Since the start of the financial crisis, dozens of Spanish publications have shut down and more than 8,000 journalists have lost their jobs, according to the Federation of Spanish Journalist Associations.

In this climate, SpainMedia is adding its incarnation of Forbes to a roster that includes Spanish editions of three other well-known periodicals: Esquire and Harper’s Bazaar — both owned by Hearst — and Robb Report, which is owned by CurtCo Media Labs in Malibu, California. SpainMedia also publishes its own travel magazine, Orizon.

Mr. Rodríguez’s outlook on the future of magazines in Spain goes beyond being merely optimistic. “I’m a publisher who believes that paper as a product is more alive than ever,” he said.

He also sees the sector returning to its “golden era” of 50 years ago when advertising mushroomed and magazines set the benchmark for photojournalism.

“Magazines have their own language and we need to return to the origins of that language,” he added. “It’s also about walking into a bar and sending a very clear message by the way you’re holding the magazine under your arm – and that’s an experience that anything digital will never give you.”

Yet no matter how much Mr. Rodríguez values paper, the transition from print to digital magazines “is now happening, even if it is slower than for daily newspapers,” according to the journalist Pedro Cifuentes, director of a master’s degree program in digital journalism at the IE Business School in Madrid. Mr. Cifuentes said early estimates suggested that circulation for digital magazines had risen 15 percent in Spain last year, compared with a 5 percent decline in printed copies, in line with what happened in markets like Britain. Meanwhile, advertising has fallen about 40 percent overall since the start of the global economic crisis in 2008.

Forbes already published 26 other licensed editions of its magazine, including several in East European countries like Poland and Romania. Spain is the first foray by the family-controlled Forbes into Western Europe.

Asked about the timing of its Spanish entry, Miguel Forbes, a family member who is in charge of the publisher’s worldwide development, said by telephone recently that “the time to launch is when a market is in the process of recovery.”

The Spanish edition of Forbes, a monthly released March 6, had a print run of 65,000 copies. Neither Mr. Forbes nor Mr. Rodríguez would disclose financial details about their venture, which involves SpainMedia paying a licensing fee to Forbes based on its magazine sales and advertising revenues.

“Andrés has shown that he’s able to put out very strong titles with a very lean staff,” Mr. Forbes said of Mr. Rodríguez. “A lot of publishers have a big staff, but it’s hard to make money when you have a large headcount.”

SpainMedia, which has annual sales of about €10 million, or $13 million, operates out of the former printing facility, which Mr. Rodríguez bought two years ago “in the midst of the property collapse” and then renovated. The company has only 30 employees, with an average age of 28. Half the staff members are journalists.

Raw Data: Deciphering the Decline in Spanish Mobile Accounts

BERLIN — It would take the unimaginable — a major power outage, a natural disaster or a sudden, permanent loss of income — for many people to abandon their mobile phones.

That is what appears to be happening in Spain in the midst of its economic crisis. But in the country’s telecom sector, as in a Salvador Dalí painting, there may be more than meets the eye.

The Spanish regulator, Comisión del Mercado de las Telecomunicaciones, said last week that 486,183 mobile phone accounts were deactivated by Spanish operators in October alone, the ninth straight month of contraction that has seen two million prepaid accounts, or 9.4 percent of the current total, taken off networks since February.

The biggest reason for the industry’s difficulties is the most obvious: Spain’s economic slowdown, highlighted by its 26.2 percent unemployment rate in October, including a jobless rate of nearly 50 percent among cellphone-conscious young consumers.

Rosalind Craven, who analyzes West European mobile operators at International Data Corp. in London, said the nine months of contracting figures reported by Telefónica’s Movistar and Vodafone Spain, the two largest mobile operators, reflected the economic challenges facing consumers.

“Because it has been going on for so long, this indicates that the reason is indeed the country’s economic distress,” she said. “People in Spain have less money and are looking to save where they can.”

From January through October, Movistar, the market leader, has deactivated 2.3 million mobile accounts. Vodafone Spain, the No.2, shut off 1.3 million accounts, according to the telecommunications commission. Conversely, Orange Spain, the No.3, has gained 124,420 customers and Yoigo, owned by TeliaSonera of Sweden, has added 412,580. Virtual operators, which are low-cost resellers, have added 1.1 million customers.

But three other developments unrelated to Spain’s slowing economy may be exaggerating signs of a telecom sector meltdown.

The first was the decision by Movistar and Vodafone this year to stop subsidizing new handsets. The cost-cutting move caused many customers to switch to Orange, Yoigo and virtual operators like Simyo, which continued to provide subsidies. Both Movistar and Vodafone have since partially reinstated subsidies.

The other influence was a decision by Telefónica and Vodafone to focus on their most lucrative clients — contract customers who pay on average about €25, or $33, each month, more than double what prepaid customers pay. Telefónica, for example, has signed up one million customers since October to a new plan called Movistar Fusión, a package of mobile, fixed and Internet flat-rate service starting at €49.99 a month.

A third, less obvious reason, may be the counting methods used by the operators, which during economic downturns have been known to purge inactive accounts more aggressively from subscriber lists. Such cullings bolster the average monthly revenue per user, the main bellwether used by investors to value operators.

Representatives for Telefónica and Vodafone declined to say if they were aggressively purging their lists. Ms. Craven, the I.D.C. analyst, said operators in Greece conducted a mass purge in 2009 as that country’s economic crisis began to worsen.

Operators generally declare accounts to be inactive when they are unused for three or six months. In good economic times, bigger customer rolls help operators claim greater market share. In bad times, the bigger lists dilute scarce earnings.

Spaniards do not appear to be abandoning their “móviles.” Cellphone penetration in Spain was 116 percent in October, and many people carry more than one SIM card. The inactive accounts being shut down, said Agustín Diaz-Pinés, an analyst at the Organization for Economic Cooperation and Development in Paris, are likely to be extra SIM accounts.

“Undoubtedly the economic downturn plays a role here, but I don’t think many people are dropping their mobile subscriptions,” he said. “They may rather be canceling duplications, for example, the prepaid line you never use.”