November 6, 2006
News Analysis: Impremedia's Latest Moves

Impremedia recently has made several moves that have significant consequences for the Hispanic print and digital media landscape.

Ten days ago, Impremedia announced that its weekend entertainment magazine, La Vibra, is now distributed in the nation's top six Hispanic markets. La Vibra now has a circulation of 550,000 (a higher circulation than People en español). Last week Impremedia announced the acquisition of Vista magazine. What are the implications and what can be expected going forward? A Q&A Portada analysis.

Why is a newspaper company (Impremedia) buying a magazine (Vista)?
There are not many Hispanic newspapers in the market that are worth buying. Either their valuations are very high, or they lack the scale to really make a difference in terms of revenues for a large company like Impremedia. By buying Vista, which is inserted in 29 newspapers nationwide (see box at the bottom of this text), Impremedia can expand its footprint by much more than by buying a newspaper in a single market.

Through Vista and other platforms Impremedia now reaches more than 60% of the Hispanic population in the U.S.

What benefits does Vista offer to Impremedia?

Vista is one of the very few large circulation vehicles in the Hispanic print media market. It has a circulation of 1 million. This large circulation enables Vista to offer lower CPM's (Cost per thousand) than smaller Hispanic magazines can offer to advertisers. The typical Hispanic magazine rate card CPM is between $70-$90, while Vista's CPM's are between $30-$40. (This is one of the reasons for the increasing amount of Hispanic magazine inserts into newspapers including Casa y Hogar, Futbol Mundial, Fox Sports en Español and soon to be launched Kena magazine). Impremedia's advertising sales force of 140 (20 of them devoted to selling national advertising) will now be able to cross-sell Vista to other advertisers as well as Vista advertisers into Impremedia properties (including the Domingo Network, Impremedia's 750,000 circulation weekend free home delivery newspaper in Los Angeles, Chicago and New York).

Will anything change at Vista?

Vista will continue to be operated out of Miami with its publisher Gustavo Godoy at the helm. Impremedia has stated that it will retain all of Vista's employees. Going forward the number and names of the newspapers where Vista is inserted in may change. “Vista has done a wonderful job in attracting Walmart, Procter & Gamble, and other Consumer Packaged Good Companies. They also have done a great jobs for credit card companies, including a campaign for Visa. There is a lot Impremedia can learn from them,” John Paton, CEO of Impremedia tells Portada.

Does this mean that Impremedia's acquisition spree is over?

Not at all. “There are still key markets and key regions that we are excited about like Texas and South Florida,” Paton says. Impremedia investors, including private equity backers Clarity Partners LP (Los Angeles), BMO Halyard Partners (New York) and Acon Investments (Washington), want a return on investment and an exit strategy. This exit strategy could be an IPO or a sale to a large US newspaper company. In order to be interesting to a large U.S. Media company Impremedia needs to acquire an even larger scale; A media company that wants to claim to really target Hispanics nationwide has to have properties both in Texas and South Florida. Right now Portada estimates Impremedia's sales at between $80-$100 million. Impremedia does not disclose any financials, howewer Paton tells Portada that the company is profitable.

What about Impremedia's online strategy?

Impremedia recently started to brand itself as the “#1 Spanish Language Newspaper and Online Publisher.” Says Paton, “Online is a significant part of our future, we will be investing heavily in online patforms,” adding that Impremedia will be developing all of its websites including Vista's website. The Hispanic online advertising market is still small (approx. $140 million a year), however the largest portion of growth in this market comes from advertising to Spanish-dominant Hispanics who are increasingly getting online access, a subsector where Impremedia's print media properties are active in. Paton did not want to go into details about Impremedia's online media strategy, but it is clear that it is an important part of the company' strategy for 2007.

Vista Magazine Circulation (01-25-06)