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Norman Pearlstine, 72, is executive vice president and chief content officer of Time Inc., where he is charged with the development of new content experiences, consumer products and lines of business across the company’s titles. In this role, which he has held since October, he also oversees the company’s editorial policies and standards.
Pearlstine’s journalism career includes serving as Time Inc.’s editor in chief from 1995 to 2005 and working at The Wall Street Journal in several prestigious roles, such as managing editor, executive editor and founding managing editor of The Asian Wall Street Journal and founding editor and publisher of The Wall Street Journal/Europe. Pearlstine was also Forbes magazine’s executive editor, launched SmartMoney, and, most recently, from 2008 to 2013, he served as Bloomberg LLP’s chief content officer.
WWD: Time Inc. recently formed a native advertising unit led by Sports Illustrated Group creative director Chris Hercik. Could you talk about that and its importance to the company’s future?
Norman Pearlstine: We did. Native advertising covers an awful lot of stuff. In many ways, it’s just an extension of what in print had been called for years an advertorial. We’ve had a unit in place that Chris Schraft runs called Time Inc. Content Solutions that has been playing in this place, mostly in print, but increasingly digitally. It’s not totally new, but what is new is that under Mark Ford, who took the position as head of corporate advertising, we are putting a unit together that Chris Hercik will work on. I think that the balancing act is that you would like to find appropriate ways to have editorial talent working with Mark and his team to come up with content solutions for advertisers and, at the same time, you have to be obviously mindful of potential conflicts if you are not careful in how you structure these things. The Time Inc. Content Solutions model is one to follow in that it’s got some very experienced journalists working on those products but they don’t engage in magazines on editorial where they’d be covering the people that they are writing about.
WWD: So, journalists for the publications are working on native content?
N.P.: Chris is really the exception to that. He happens to be the creative director at Sports Illustrated, a magazine that doesn’t cover the people whom we’re working on. He’s a brilliant creative director with a wonderful commercial mind. The place we’ll have to be careful is if there are packages that he’s working on would somehow involve Sports Illustrated. He’s going to have to recuse himself from doing anything at the magazine itself that would raise conflict. It’s my job to ensure that it doesn’t happen.
WWD: Is native changing the culture of journalism?
N.P.: There are two things at work. One is, there is the separation between edit and advertising, particularly as it goes to the business side, and whether that’s changing, and church and state, as how it’s practiced at Time Inc. It was very different from anyplace else I can think of in that editors reported up to an editor instead of to a business head, not to a publisher, not to an ad sales person, but to a business head. That’s actually the way networks and [24-hour] news organizations and competitors in magazines worked for a long time. The issues for journalism and journalists, we see obvious places where presentation is very different in a digital space from traditional print. If you go to a New York Times homepage, you cannot get to a story about the Ukraine without a click-off on a banner ad or a slide show. They’re not alone in that — you think you’re clicking on a video about a news event and you have a 30-second ad that you have to watch before you can get to it.
The technology is not only the way we change stories, but also changing the relationship to the consumer. If our brands are going to be in print and on mobile handsets and in video and events, we have to acknowledge that the playing fields are going to be different than a print-only product or a print product with extensions to it.
I think what it does is put a higher premium on transparency. Yes, there may be some convergence to what you see on a screen that’s different from the way you will experience a magazine in your hand, but there are lots of ways you can signal differences. Where native advertising and these other things get tricky is when the consumer can’t tell the difference between edit and advertising. We should want our advertising to be compelling. We want advertising that works. If we can help an advertiser refine a message so it works for our consumers, we should be doing that, but at the same time, you never want to do it by confusing the customer about what the experience is. If we fail in that regard, we do our brand and our customers a disservice.
WWD: At a recent talk I covered, you said: “We have yet to come up with a business model that can support much of the journalism that is important.” Do you still stand by that?
N.P.: It’s moving fast. We have several titles now where our non-print revenue is growing faster than our print revenue is declining. That wasn’t true a while ago and we’re beginning to get some traction with our digital revenue. I think we’re getting more efficient and effective in the way we structure ourselves to continue to do great journalism in taking advantage of technology. Just as there’s some technologies that jeopardize revenue for traditional products, there are also technologies that can significantly lower costs. I think we’re getting better at that. I don’t think anybody has cracked the code at this point, but I’m much more optimistic about the future than I probably was, as I see some of the things that are moving in, and as I step back and realize how fast stuff is going.
WWD: What did you learn from the roadshow process for the spin-off of Time Inc.?
N.P.: It was fascinating. For me, part of the migration from being a division of Time Warner to becoming a publicly held company with a broad shareholder base is sort of what the expectations are for us as a company. Internally, [chairman and chief executive officer] Joe Ripp, [executive vice president and chief financial officer] Jeff Bairstow and I made close to a hundred presentations during a six-week period. We solidified a message and a plan that was responsive to the questions, but also in addition to learning when not to trip over each others’ lines, we came together in terms of a real sense of what the path forward has to be that probably was not as fully formed as before we began the roadshow. You learn a lot from your customers, and when your customers are also your owners, you learn even more. You have some shareholders and debt holders who want to make sure we have sufficient cash flow to pay back our debts and invest. There’s also a shareholder base developing that understands that the print products remain strong — we have profitable magazines — and our operating margin is certainly respectable. We are not shy about acknowledging the headwinds that any company that is as dependent on print revenue as we are has to face. We have to move quickly to become a far more diversified company that finds revenues by developing these brands across multiple platforms and creating new brands that grow out of a better understanding of this huge customer base that we have. We deliver 33 million subscriptions a month and we have very big numbers in terms of products that might work across platforms. It’s not just a digital transformation story — that’s part of it — but it’s also what other adjacencies are there. Can you do more with video? Can you do more with events?
WWD: Has technology rendered the newsweekly irrelevant? To put it bluntly, are newsweeklies dead?
N.P.: Oy. Well, there are newsweeklies that are dead. Some may still be walking, but they’re dead. Look, I think Time, The Economist and Bloomberg Businessweek are three different products providing complementary content that replicates each other, but each of them serves a smart audience, has the potential to be global and in many ways goes after the same advertisers. It’s a different group from say, Time, Newsweek and U.S. News. One of the things about Time that continues to amaze me is the convening power, as evidenced from the Time Most Influential issue, coupled with the power of the Time cover when we hit it right. When we hit on a subject, we get extraordinary response from it. We’re doing a better job now with social media, so that we are getting the credit for our own stories, as opposed to some money-losing aggregator who summarizes the story and manages to get the traffic. We’re pleased with the improvement we’re getting there.
I think the growth in time.com’s audience over the last year is one of the things that give me a sense of real encouragement. There’s no doubt that a print weekly — we have four of them, so I shouldn’t just be talking about Time — has to adjust to the marketplace. But that’s been true for a long time. People launched in 1974. Forty years ago it was seen as a replacement for Life. “How could Life survive in the age of television?” was the question everyone was asking when they shut it down. Today you look at things like Entertainment Weekly and the kind of work that Matt Bean is doing both in print and digital to really be the place for the conversation about Comic-Con, about the Upfronts, about the new season and so forth. You can’t just reprise the news. You have to have journalism that makes a point and you have to be in sync with your audience. When I think about Sports Illustrated, when I think about People, Entertainment Weekly, Time — all four of them have editors who are very much in touch with their readers and that’s a comfort to me.
WWD: Let’s talk about Fortune. You recently brought in a new editor to replace Andy Serwer. Was his dismissal linked to the need to be a digitally savvy editor or was there something more behind the shuffle?
N.P.: Andy’s pretty savvy. Look, Andy is a fabulous editor. I wasn’t here when he got the [Fortune] job in 2006. During that time, he put out some phenomenal issues. He built a conference business. As you know, he didn’t control his Web site until May 30 of this year. The fact that Fortune has a lot of catching up to do in the digital space is not the fault of Andy Serwer. Andy Serwer didn’t have fortune.com, you had to burrow into CNNMoney to find it. I remember when he was — we didn’t call them bloggers then — but he was writing a daily market wrap-up for fortune.com when I was editor in chief that was a must-read. He’s a phenomenal talent. What I did feel — it’s not true for every magazine — but eight years [as editor] is a long time.
In the last 20 years, you know Andy has done it longer than any of his predecessors. There are two things that I’d say are different. There was a time when you’d step down from a job like that and you’d typically come up to the 34th floor in a corporate kind of position while seeing if something else might develop. When Jim Gaines stepped down as the editor of Time at the end of 1995, he came up to 34 and he sat down the hall from me. When Rick Stengel left Time and was replaced by Nancy Gibbs, he was sitting next to Martha Nelson. Jim Kelly left Time before that and came up as John Huey’s deputy. One of the things that is just different is that as a publicly held company, we’re running a lot leaner than we ever have in the past. When I was editor in chief, I had two full-time deputies and I don’t have any deputies now. Ten years ago, if you left Fortune after eight years, you’d find a corporate-level job and deserve it. That kind of thing is no longer possible for us. I view our management to some degree as a pyramid with a flagpole on top. You get to a certain point where there’s not much upward mobility.
WWD: Do editors have a shelf life then?
N.P.: There’s nothing magical about how long an editor ought to hold a job. There have been exceptions. Mark Mulvoy was editor of Sports Illustrated for 14 years. Jim Seymour was editor of Entertainment Weekly for 12. In general, I think eight, nine years is a long time. These are grinding jobs to remain fresh and so on. If you think about where Fortune is now, having just gotten back its Web site, there is a major transformation that we need to do. It’s a multiyear project and I think there’s a great argument to be had for bringing in a new editor with fresh eyes. I don’t think Andy would have imagined himself staying in the job another four years or so. In our conversations, there was kind of a presumption that would not be the case, so when a talent like Alan Murray was available, it made sense to move at this time.
WWD: Can editors reinvent themselves?
N.P.: I hope so because I’ve been masquerading as someone who can do that for a long time. It’s in my interest to certainly believe that editors can reinvent themselves. If Andy came and had a great idea for something he wanted to do, of course we’d take a look at it. There was no desire to purge Andy from Time Inc. It was just a realization that we didn’t have the kind of corporate structure around here. This is a collaborative management team that doesn’t have a lot of layers. There’s a de-layering across the industry — if you look at what has gone on at Condé Nast.
WWD: Do you think there can be a successful news blog or is the blogosphere oversaturated and has less relevance than it had before?
N.P.: I think there’s huge room for a personality who can create a following, and that personality can be a person or a company. I don’t know the economics of Andrew Sullivan, but I’m amazed by the quality of the stuff he puts out. It is as he says, “Balanced and biased,” it’s not unbiased, but it’s a pretty compelling read. Can he make it big enough that it’s a compelling business? I don’t know. I think there’s still room for compelling voices to build up and get a great following.
WWD: What is Time Inc. looking to invest in next? Are they primarily digital entities or will the company look at print?
N.P.: It is hard to say much beyond the obvious fact that we have many investment opportunities. You should look to our recent investment in 120 Sports and our acquisitions of Cozi and, before that, American Express Publishing. These moves suggest that we are focused on better serving existing and new customers in existing and new markets and that we are especially interested in opportunities in video, digital and print, where our brands and our core business competence, very much including marketing, can accelerate growth.
WWD: What are the big stories that Time Inc. should cover?
N.P.: Everything’s a big story. I was struck by the power of Steve Brill’s health care piece in Time last year. I think about things like that and education and pediatric health — you can imagine it being an important story for Time, for Essence, for People, for Real Simple. On the other hand, for InStyle, the big story may be a revolution in beauty treatment. We need to value and honor those stories as well. I wouldn’t want to solely look at the Ukraine and Gaza — those are big stories, too — but we have the obligation and the luxury to follow [founder Henry] Luce’s [thinking] that the entire world is fascinating and we want to cover all of it.
WWD: What are you reading these days?
N.P.: My reading has changed a bit. I’ve always had an interest in geopolitics and macroeconomics. If a story breaks in the subcontinent, I’ll read Dawn out of Pakistan. I’ll read Mint, the English-language business title out of Delhi. I’m not relying on someone who has a bureau in Delhi. You can go right to the source. In terms of more traditional things, I read The Nation, I read all of our titles, obviously. I tend to read the big news organizations at night — Washington Post, Wall Street Journal, New York Times. Then there are certain trades. I’ve always loved entertainment, so I’m reading The Hollywood Reporter. Women’s Wear, I like. I tend to be more interested in the trend pieces than who got a licensing deal for sunglasses, but that’s not surprising.