Entering the ‘Other’ World (Beyond Print)
What makes Federle a little more confident than his competitors in meeting digital demands is that Fortune is a subsidiary of Time Warner. “I can easily tap into venues like CNN,” he says. “For instance, we have writer Andy Serwer present a morning webcast called ‘In the Money’ for CNN. Overall, there is clearly a desire for integrated packaging—meaning print with a strong online component and other delivery, and we can easily do all of that.”
While Lipson of Metrocorp focuses mainly on print, he is investing in an online presence and producing television shows and events, including home entertainment and a cooking show on CN8 and CBS. “We know that the Internet would attract a younger group, but we are comfortable in our skin and in our mission,” he says. “We appeal to those making a good living, and as people achieve expendable income, they will come to us.”
While publishers wade into the deeper end of digital delivery, they are still dependent on ancillary profits to help keep afloat.
For Lipson, additional revenue comes from sponsorships of events as well as the TV shows. “We also publish annuals like Best of Philly, which brings [in] good profits for us.”
Federle reports that Fortune breaks up its revenue streams into revenue categories including print ads, subscription, consumer, online and others such as conferences, reprints and data products.
“Our data products include issues like the ‘Fortune 500’ list and ‘America’s Most Admired’ lists,” says Federle. “In total, our extra revenue streams represent about 6 percent of our top-line revenue. In terms of our bottom line, it is a much bigger percentage.”
He adds that Fortune will be posting a lot more online for added profit. In fact, during the first week in January, a new joint site was launched, called CNN/Money.com. It is powered by Fortune Small Business, Money, Business 2.0 and CNN. “This [Web site] will allow us a site of scale that will give us many more opportunities to package very big deals across the money group,” says Federle. “We are talking about 20 million influential and affluent users. Already we are seeing robust sales into our Web site among the financial advertising category.” (See page 34 for more on the new site.)