Magazine Leaders Take Jabs, Forge Ahead Into Uncertainty
C-level executives are like politicians: when asked a question, they rarely answer what they were asked. The only way to combat this is to have a persistent interviewer. At the closing event of the Magazine Publishers Association conference last week The New York Times' David Carr played the ideal foil to some of the magazine industry's biggest whales, including executives from Hearst, Conde Nast, Rodale, Time and Meredith. At any given point, Carr had the crowd laughing or the panelists squirming. In either case, it was entertaining.
Plenty of good points were made. Here are some highlights:
Who do you compete with?
As Joe Ripp CEO of Time Inc. said it's not head-to-head like it used to be. Magazines no longer compete with other magazines as much as they compete with other forms of distraction, and clients aren't interested in hearing about how one magazine compares to another. Now they ask, "How can we make sure that we continue to attract the audience we've attracted for years and continue to delight them?"
As Maria Rodale chairman and CEO of Rodale Inc. put it, "Our job is not to look at our friendly competitors, but to ask, "Where are our customers and what do they want?'"
Several times Ripp suggested the idea of the big publishers collaborating on technology platforms. Hmmm, what might that look like?
As I was browsing some of the tablet magazines on display in the exhibit room, I was reminded of how frustrating it is that each tablet magazine functions differently enough that they need instructions. That seems like a good place to start when it comes to collaboration, but don't hold your breath: The balkanized tablet technology sector will ensure readers have to relearn how to ride a bike every time they want to leave home.
Is the future really on tablets?
Carr incessantly pushed the panelists to describe the future as they saw it. "The incoming cohort of consumers -- it's a fact of life that their prism to the world is [iPhone-sized]," said Carr. "One thing that doesn't fit that well there is a business model."
David Carey, president of Hearst Magazines, said his company has worked on driving paid subscriptions to tablet. And Bob Sauerberg, President of Condé Nast praised Apple for creating a "high-fidelity environment" that "reduces friction" in the IOS 7. Rodale emphasized the need for publishers to experiment. "It's a huge opportunity for innovation, creativity and testing things. You have to be willing to experiment and be fearless."
Nothing too groundbreaking here. Luckily, Carr didn't let them have the last word. "Tablet revenue is so tiny. It's not a meaningful part of your business."
Bob Sacks also pushed the point, asking from the audience when publishers expect digital subscription to be 50% of their business. Carey said Hearst has set a goal of 10% by 2016. Currently they're around 3% and hoping to grow a few points a year. "For every percent of people that switch to digital, we save 5 million bucks," added Carey.
Are Magazines The New TV? (And Other Reasons Publishers Can Sleep At Night)
Carey said he's confident that the market still responds to new products. Exhibit A: the Esquire Channel, which launched in last month. The channel has exposed the Esquire brand to people that haven't engaged with the magazine in some time, said Carey. The partnership between Hearst and NBC was an easy marketing move. NBC could pick a brand name off the shelf and spend years adding value to it, or it could use something with a built-in cache. It's a testament to the power many magazine brands have but don't take advantage of, says Carey.
Ripp chimed in that Time Inc. actually created HBO but the magazine didn't reap the rewards. "Synergy at Time Warner is an elusive term," Ripp quipped, mentioning he is looking forward to the spin off of Time Inc. and it may be a chance to pursue television programming again. "Spinning off will be the best thing we ever did."
When Carr pressured the execs that they might be sleepless because the deteriorating newsstand sales, Carey quickly argued that the consumer side of the business has never been so strong -- it's advertising that's hurting. "If you wake up because of the newsstand, you can go to sleep based on how strong the consumer side is."
Should You Fear the Speed Boats?
Carr also questioned the group on whether they have the skills -- and the guts -- to move quickly in the digital age? He cited Vice Media as one example of a company that has quickly come along to eat the dinner of the magazine giants under their noses.
Sauerberg said Conde Nast made the wise decision to integrate digital and print across all brands. And though they struggled at first, it was the right move. "We had to start getting this in place and think about how we were going to change the composition of our workforce. There's no simple way to wave a wand and have digital literacy go through this large organization."
Carey noted that Hearst has brought in Troy Young to overhaul Hearst Digital. "What we like about nimble startups is the sense of impatience...Troy's job is to accelerate everything."
While Ripp was candid: "Because our companies got so large, we couldn't move as quickly."
I was particularly grabbed by a comment by David Carey that he likes "speedboats" like Vice because they force Heasrt to take more risks. "Vice pushes us to go out further out on the limb. We like the models set by these speedboats."
To offer a bit of context, Vice Media was recently valued at $1.4 billion. For some reason I'm reminded of the scene where King Kong is atop The Empire State Building. One or two itty-bitty airplanes didn't take him down, but eventually a swarm proved too much. But then again, that was just a movie.
Denis Wilson is editor-in-chief of Book Business and Publishing Executive. In this role, he analyzes and reports on the fundamental changes affecting the publishing industry and aims to serve content-driven businesses with practical and strategic insight. As a writer, Denis’ work has been published by Fast Company, Rolling Stone, Fortune, and The New York Times.