Cover Story : Why Are Some Magazines Thriving?

Hoffman Media President and CEO Phyllis Hoffman talks about the success of Cooking With Paula Deen and the company's other titles. What's her secret?

When Phyllis Hoffman started her first magazine, Just Cross Stitch, in 1983, she knew a lot about needlework, but next to nothing about the magazine business.

"We didn't even know what direct mail was. We did not know what rate base was," she says. "We just were having a great time."

As it turns out, that lack of publishing knowledge may have been a good thing. While her background is in numbers (she is a trained CPA), Hoffman has never focused on the magazine numbers game. Instead, her approach has centered around knowing an audience and bringing an enthusiast's passion to the business of magazine publishing.

"Our success in publishing is basically, 'Would I want to read that magazine? Is it applicable to me? Does it benefit my life and where I am today?'" she says. "We don't bargain-basement our magazine [prices] … because if people love your magazines, they will pay for good editorial."

Not surprisingly, Hoffman believes years of living by cheap subscriptions—the Publishers Clearing House model—are at the root of the industry's current problems.

"We are not out to establish a rate base by giving stuff away to sell ads against," she says. "Our magazine numbers that we deliver to advertisers are real numbers, and they are premium numbers. They are paid, and there is nothing gimmicky about it. So if you buy an ad in one of our publications, your ad goes to readers that have paid for that magazine and are excited about it."

It's a philosophy that has guided Hoffman Media through the ups and downs of the business. Phyllis Hoffman also largely credits this philosophy with the success of the company's four-year-old Cooking With Paula Deen, which has been making news lately as one of a select list of magazines seeing ad-page and revenue growth (up for the first six months of 2009 compared to the same period a year earlier) in the midst of a disastrous year for media properties in general.

The Cooking With Paula Deen story, in fact, reflects much about why the company has been successful. Launched when chef and Savannah restaurateur Deen was an up-and-coming star on the Food Network, the magazine resonated with the publisher's core demographic of southern women and quickly carved out its own niche in the profitable world of lifestyle/cooking titles. The timing could not have been better; renewed interest in home cooking combined with the ongoing appeal of magazines tied to a personality (a la Martha Stewart) proved to be one of the winningest formulas of the decade.

"[Cooking With] Paula Deen and [Every Day With] Rachael Ray came out two weeks apart," recalls Hoffman. "That was the weirdest thing I've even seen because we thought we had a big surprise, and they thought they did. Of course, both of them are doing extremely well."

For Hoffman Media, good timing always has been combined with a keen sense of unmet demand. (When it launched, Just Cross Stitch "was the only one of its kind, and it grew like crazy," Hoffman says.) The company's early success in stitching—and an exclusive contract with the Walt Disney Company to do a "Disney in Stitches" program at theme parks—caught the attention of PJS Publications, then a division of Veronis Suhler, which bought Hoffman Media in 1993. Being part of a massive corporation meant a shift in strategy, and when plans were afoot to consolidate all of the parent company's stitching and quilting books in Denver, Hoffman decided, in 1998, to buy her properties back.

"My boys were seniors in high school, and I wasn't moving to Denver," she says. "That wasn't even in the cards."

Back in control of its destiny, Hoffman Media returned to what it did best—focusing on a loyal, regional demographic. The company decided to branch out into lifestyle magazines with the launch of Southern Lady. "We kept asking ourselves, as publishers, why doesn't someone write about the South—the places, restaurants, boutiques, things that women love—because the magazines that were then being published were centered around New England, New York and California," she says. "When we launched Southern Lady, that was our entre into lifestyle, entertaining and cooking, and from there, we have added magazines when it was the appropriate time in the appropriate category."

Southern Lady was followed by other lifestyle titles—Taste of the South, Tea Time, Sandra Lee Semi-Homemade, Cooking With Paula Deen and, most recently, Celebrate, focused on holidays and other important life events. In 2004, Hoffman did some acquiring of its own, purchasing fellow Alabama publisher Martha Pullen Co. and its Sew Beautiful magazine. Today, Hoffman Media consists of 10 magazines in addition to a book division, with revenues topping $42 million.

Hoffman believes her products are successful because they reflect an understanding of the needs, joys and desires of their audiences, such as the challenge of maintaining a traditional home amid the pressures of modern life. "You are selling a dream, but [the dream] also [has] to be achievable," she says.

Revenue in Balance
Having a balanced revenue stream of advertising, subscriptions and newsstand sales has helped the company through the downturn, as has the fact that its base of core advertisers from nonvolatile industries—such as cookware and food—has weathered the recession relatively well. The company also has been successful in rallying its loyal reader base around new revenue products such as live events.

"We're finding the event component with each brand is very strong, particularly with those [brands] that have been established for a while," Hoffman says.

The annual Southern Lady Celebration, held in a different location each fall, honors a Southern Woman of the Year—this year, Laurie Hickson-Smith, a designer on the TLC show "Trading Spaces"—as well as offering demonstrations, speakers, shopping and a chance to meet the magazine's editors. "The pages of Southern Lady actually come to life onstage with people who have been in the magazine," Hoffman says.

The company also hosts needlework and stitching schools and seminars, and sponsors events featuring Paula Deen and fellow Food Network star Sandra Lee.

Expansion into digital products has mainly come in relation to the craft and needlework publications, where the company is experimenting with downloadable instructional materials and patterns. Online social networking also has proven a natural extension of the type of enthusiast community spirit cultivated by Hoffman's magazines and events. The company is testing digital editions for those who prefer online magazines, though it expects to keep the primary focus on its print products for the time being.

"There is something still wonderful about sitting down with the beautiful pages of a magazine and just thumbing through it leisurely," Hoffman says. "We are trying, obviously, to be current, but traditional magazine publishing is where the bulk of our audiences are. They're tired of computers; they work at them all day. There's nothing restful about cranking one up when you get home."

Cautious Growth
Hoffman says staying in touch with trends and customer desires requires a certain approach to running the business, epitomized by an open office environment that encourages individual initiative and the trickling up of ideas from editors.

It also requires staying focused. "We've had a lot of opportunities to get outside of our box, but when we stay in that box with what we do best, that's where our strength is," Hoffman says. "With all the financial ups and downs we're seeing in the marketplace right now, we are very conservative in that regard. We build solid rather than just build."

This conservative approach feeds into Hoffman's view of the need to be as smart as one is aggressive when it comes to growth. When Cooking With Paula Deen was launched in 2005, an unexpected sales surge required the first issue to be printed three times. The company was able to quickly reassess priorities and resources to ensure there was no loss of momentum. "Because of the size of our company," Hoffman says, "we can be very nimble.

"Hoffman Media, in the future, is going to grow to its own water level, because we are very aggressive in our growth, but as a smaller company we also have to be very prudent. Growth can be hazardous to your health if it is not managed," she notes. "We almost saw that with [Cooking With Paula Deen].

"Where would I like to see Hoffman?" she continues. "Heck, we ought to just buy everybody in the country and be the biggest there is. But the bottom line is, we're the little engine that could, and we just keep right on going. We're a very strong, medium-sized publishing company, and that's a good place to be."

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