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“Business is tough,” Cathie Black admitted at WWD’s Media Summit, but the Hearst Magazines president said the economic recession affecting the publishing business doesn’t signal the death of print.
This story first appeared in the December 9, 2008 issue of WWD. Subscribe Today.
“Media is now poised in a critical window of time that opens on the double E’s and I don’t mean electrical engineering. I mean evolution, or to some extent, maybe extinction,” she stressed. “The future calls for some intelligent design.”
The publishing industry has faced incredible challenges not just from the broader economy, but from the need to adapt to a increasingly fragmented media landscape, where digital platforms (online, mobile and other “screens”) are taking more consumers’ attentions. Black said the future for print will include adapting content to where the consumer is increasingly spending more time. Those brands that seek new avenues of operations — be it the Web, mobile or new magazines — will survive the current economic retrenchment. “Print evolves because it’s not the product that’s changing, it’s the delivery truck,” said Black. “The product is branded content, and how it gets to the end user, now and in the future is really what we’re all focusing on.”
Black manages a portfolio of magazines that includes Redbook, Cosmopolitan, Esquire, Seventeen and House Beautiful. She is a publishing industry veteran, having run USA Today during the daily paper’s launch in the Eighties, and was publisher of New York magazine.
While Black oversees some of the largest magazines in the world, she said that on newsstands today, “there are too many magazines, too many duplicative magazines.” But she believes the stronger print brands, even in a recession, “can have an incredible success story.”
She pointed to the newsstand sales results of the November issue of Cosmopolitan, which sold 450,000 more copies than the issue in 2007. That sort of growth is rare in magazines these days, as most titles are seeing declines in single-copy sales. “Cosmo averages anywhere between 1.8 million and 1.9 million on the newsstand,” Black said. “Think about the power of that brand message. Nearly 2 million women plunk down $4 every single month and make a consumer decision. Add another million subscriptions to that and you’ve got a very broad reach vehicle.”
Black also pointed to the Cosmo brand’s expansion abroad: the Russian edition sells 1 million copies a month, which makes it the largest-selling women’s magazine in all of Europe. Hearst Magazines’ international business, which includes 58 editions of Cosmo, now drives 30 percent of company profits annually, growing at a double-digit clip for the last six years.
She also believes the stronger consumer product brands will emerge in this economy as long as they keep advertising (hopefully, for Black, in Hearst’s magazines). “All of the studies that we have on advertising, admitted probably from the [American Association of Advertising Agencies] and those who have a very vested interest in advertising successes, say every advertiser, every company that has advertised throughout recessions and depressions has come out stronger on the other end because they have taken, or stolen, market share. What’s happened right now is that a lot of our clients are just scared. They don’t know quite what to do,” she said.
Like most publishers in the U.S., Hearst this year has had to look for ways to trim costs or shutter unprofitable businesses. This fall, the company has also laid off employees across nearly all of its titles. It also folded O at Home back into its flagship, O, The Oprah Magazine, and closed Cosmogirl, a move which Black said “broke her heart.” Upon hearing William Lauder, Estée Lauder’s president and chief executive officer, declare to her that teens are only spending their time online, Black surmised, “The advertisers really walked away from the teen market.”
Nevertheless, Hearst is one of the few publishers launching magazines as of late. The company in October introduced The Food Network Magazine, a food title including recipes and content front the popular Food Network Channel. Black said Hearst is approaching the launch much differently than other companies that have introduced magazines with the pomp and circumstance of extensive — and expensive — publicity. “We’re not going to launch in an incredible, public way. I think the days of sinking tens and tens of millions of dollars into a magazine launch are going to be behind us.”
Black predicted The Food Network Magazine’s first issue will have about 65 percent sell through at the newsstand. The second issue comes out in early January; six issues will be published next year.
But as the economy forces publishers to look for ways to trim costs, Black spoke of several efficiencies the industry could adapt. For one, a publisher’s Internet operations can lure new readers to the magazines at a significantly lower cost. “When you think about the mailing of traditional subscribers: direct mail, testing list, fancy promotional pieces — if we can migrate a lot of that activity to the Web, that takes millions of expenses off of our bottom lines, and that’s a very positive thing.” Additionally, those readers tend to be “younger, very high demographics, and that’s good for the future of all magazines.”
Black also said magazine editors themselves have to reapproach how they do their jobs. “We have to transform a new generation of editors. Our editors a few years ago, I would suggest, were terrified about what the Web would do to their magazine. What would it do to their own job? What would it do to their own prestige? What would it really mean about their own future?”
Taking a page from Europe and Asia, Black said magazines in the U.S. will have to learn how to operate with fewer employees. “Our magazines can’t be as big from a staff standpoint from what they once were,” said Black. “Our staffs in Australia producing beautiful magazines are about a third the size of the staff of the U.S. operations. Group publishers are classic in Australia and the U.K.; it doesn’t seem to work as well here.”
Though business, as Black said, is tough, she remained positive. “We need to look at the new year with confidence, with optimism, but also with a lot of pragmatism,” she concluded.