Reed Elsevier: the name behind Midem and Variety.

For the thousands of delegates attending MIP-TV this year, it is highly unlikely that the name Reed Elsevier immediately comes to mind as they traipse the myriad staircases of the Palais des Festivals. But the Anglo-Dutch publishing giant has closer connections to MIP-TV than they realize. For Reed Elsevier owns (among other things) the Reed Midem Organization, which manages MIP-TV, Europe's biggest TV market.

MIP-TV is one of several trade fairs organized by the group. But a closer examination of the company's corporate affairs indicates that it is seeking to use its assets to become a dominant player in the electronic media market.

A child of one of the first media mergers in the 1990s, the company was formed in 1993 when U.K. business-to-business and professional publisher Reed International and its Dutch counterpart Elsevier merged their assets. The larger company has since embarked on an expansion spree, becoming a formidable owner of media-related trade markets,TV business and consumer publications and a highly successful on-line information service. Turnover exceeded [pounds]3 billion in 1995, with pre-tax profits reaching [pounds]736 million, a 19 percent rise from 1994.

Despite the group's current good fortune, it is still unclear what its ultimate goal is. For while most media giants are turning their attention to broadcast, Reed Elsevier remains print-bound.

The following Reed Elsevier subsidiaries are the ones media executives are keeping an eye on: Lexis-Nexis, the world's biggest on-line information service; Reed Exhibition Companies, which runs MIP-TV; Cahners Publishing Company (U.K.); Reed Business Publishing (U.K.); and IPC Magazines, a consumer publications company.

Reed Exhibition Companies, which includes Reed Midem, did very well for Reed Elsevier last year: operating profits jumped 15 percent. Paris-based Reed Midem contributed significantly to this success with its European audiovisual trade markets MIP-TV, MIPCOM and MIP Asia.

In 1995, more than 10,000 delegates from 2,245 companies in 107 countries came to do business at MIP-TV in Cannes, France.The event's highly regarded status was demonstrated by the presence of the European Commission, interactive music TV venture The Box and NetHold subsidiary Pronet, all first-time exhibitors. An offshoot of the TV markets is MIPCOM Junior.

Reed Midem is also responsible for Midera, an annual market for the international record industry traditionally held in January, which saw more than 10,000 participants from 79 countries in 1995. It is now joined by Midera Asia, which will be held in Hong Kong this May.

A more recent addition was MILIA, which is targeted at international content providers and new media companies. Then there are MAPIC and MIPIM, held for the international real estate business and the property market respectively.

But a closer look at the magazine baskets inside the Palais reveals that Reed Elsevier is also seeking to control the information received by buyers and distributors attending the TV markets.

Through Cahners Publishing Co., a U.S. division with more than 80 specialty, trade publications on its books, Reed Elsevier owns both Daily Variety and Variety magazine; Washington, D.C.-based Broadcasting and Cable; and the U.K.-based Moving Pictures International. In addition to these, there are the market dailies published by Reed Midem. Reportedly, Reed has mandated that Midem should increase its revenues at the rate of 20 percent a year. Since trade shows can account for only half of that, the pressure is put on its market dailies.

How Variety, Moving Pictures International and Broadcasting and Cable are faring is difficult to say. What is clear is that Cahners' financial performance in 1995 was not as impressive as that of the exhibitions division.

The company's financial statement read: "Operating profit at Cahners was up seven percent. Contributors to growth were a modest advertising volume improvement." The 1994 report pointed out that "market advertisement volume showed little improvement" for Cahners. However, the lackluster performance was offset by success in IPC Magazines, the U.K. consumer publications operation that has also cornered the U.K's TV listings guide sector. In addition to the long-established TV Times, a weekly with more than 4 million readers, IPC has also launched the downmarket What's on TV. IPC also publishes TV & Satellite Week, which is targeted specifically at cable and satellite viewers. Their popularity helped boost IPC's operating profit by 19 percent over 1994.

But the jewel in Reed Elsevier's crown, ironically, has very little to do with TV. Reed Elsevier acquired Lexis-Nexis, formerly known as Mead Data Central, for $1.5 billion in December 1994. This on-line information service is used by all kinds of professionals, including journalists.

At first, analysts considered the purchase foolhardy because consumers are increasingly using the Internet as a source of information and because The New York Times had removed its database from the service. But the service proved extremely profitable. According to media analysts, Lexis-Nexis helped boost Reed Elsevier's pre-tax profits by [pounds]24 million.

However, electronic publishing still represents about 16 percent of Reed Elsevier's total turnover. And although the company has stepped up its investment in digital distribution (i.e., CD-ROM versions of its publications), industry observers point out that publications are increasingly being distributed on-line. Should Reed Elsevier decide to follow suit, the company may find its annual turnover dwindling in size since on-line versions of publications are cheaper.

Perhaps this is why the group informed analysts that 1996 would be a spending spree year. With about $5 billion in its coffers, the object of desire is expected to be another business-to-business publishing venture. Should that be the case, Reed Elsevier will need to decide quickly whether to go after a paper-based publishing business or an on-line service. As for the former, a guaranteed market already exists - but for how long? As for the latter, on-line distribution is said to be the future of publishing. But will it always make money?