David Carey to Samir Husni: This IS What Keeps Me UP at Night! The Mr. Magazine™ Interview with the President of Hearst MagazinesJanuary 22, 2012
David Carey is the eternal optimist. The president of Hearst Magazines has his fingers on the pulse of the magazine industry. His prescription for an industry’s cure was outlined in his New Year’s letter to Hearst employees in which he stressed the need and importance of both the ink on paper and the pixels on the screen new magazine media business model.
I had the opportunity to visit with Mr. Carey last week in his office on the 43rd Floor of the Hearst Tower on 8th Ave. in New York City. After a brief chat on the status of industry in general and Hearst in particular, David was generous enough to share with me on tape some of his ideas and practices regarding the magazine industry now and in the future. I asked David what keeps him up at night and his answer surprised me as I am sure will surprise some of you, if not all of you interview readers and watchers everywhere.
Watch the edited video interview with David Carey below, followed by the typical Mr. Magazine Interviews™ soundbites and the transcript of the interview.
On the mix between established titles and new ones: There is always room to both revitalize an existing product and as well as to especially create new ones.
On the reasons behind enhancing their print magazines: We do want to be best in class in all of our titles.
On the creation of a “backlist” single copy business: About 30 percent of our single copy sales are for issues that are no longer available for sale on ink and paper.
On the tablets’ threat: We don’t see that all these new devices have any significant cannibalization on the print form; they tend to bring in incremental new readers.
On costs and spending: We have to really focus on pulling out all of the unnecessary costs that are invisible to the end-users.
On what keeps him up at night: We have to compete against a swarm of entrepreneurs.
The lightly edited transcript of the interview:
Samir Husni: You’re the eternal optimist. I mean, every time I read anything you’ve written, anything you’ve talked about, you have always seen the industry’s cup as more than full, or half full. After being the president of Hearst Magazine for eighteen months, do you still believe the industry’s cup is more than half full?
David Carey: Absolutely; in the U.S., but especially around the world. In the U.S., we were just chatting a moment ago for those that just joined us, about the success of HGTV and this is our latest magazine test. So you read every day in the newspaper about housing woes and all the issues in the housing market, but here is a product, HGTV, all around home and garden television, that’s an enormous positive response by consumers, to a fresh new product that found white space that otherwise was difficult to find. So there is always room to both revitalize an existing product and as well as to especially create new ones. It’s not without their risks. But if you have a good brand, a good promotion planned, it is still within success. And all of the new devices, in a world where there won’t just be a tablet in every home, but there will be five tablets, and nooks, and kindles and so on, that people have opportunities to consume our content with so much greater frequency and you think about having dinner with a friend and they mention a great article in Esquire, and then you have to remember the newsstand, or the bookstore, the airport to buy it, and you might forget, now you go home and open up one of your devices and you buy it, and it shows up a minute later. So in terms of technology, it takes all of the friction out of the consumer experience and allows people, when they hear about something, to immediately be able to activate. And what a great thing for us, not only for our current products, but also as a big magazine publisher, we sit on these vast archives of content and it’s been hard for us to create new products and make money from. And one of the interesting stats that we’ve learned about our tablet business today is about 30 percent of our single copy sales are for issues that are no longer available for sale on ink and paper; so if you want the July issue of Cosmo and you can’t find it easily, you can still buy it, it’s still valid, still relevant, and it still pays off. And so we get an opportunity to create a backlist for content in a way that’s always driven the book industry, which has front list and back list titles. We’ve only been in the front list business, so we have all these new opportunities that have been created literally in the last 12 months.
Samir Husni: In your letter to the employees at the beginning of the year, you emphasized the focus that Hearst Magazines is going to be growing in both print and digital, and your latest enhancement of print is the February issue of Harper’s Bazaar where you upsized the magazine, something that you have been doing for the last few months with the rest of the magazines. Do you see any major change that’s going to take place, in terms of whether print will become rarer in the future, digital will be everywhere, the tablets will take the place… Why are you still investing in print?
David Carey: We don’t see that all these new devices have any significant cannibalization on the print form; they tend to bring in incremental new readers. So that’s a real positive. We are investing in a number of our editions because we do want to be best in class in all of our titles. We do know that as far as advertising, we want to be, ideally, one, two, maybe three, in terms of a category, you don’t want to be four or five. The old Jack Welch rule, about number one or number two or go home is certainly in place. So if there are places where we feel that we should not chop and we should be more competitive, we’re going to make an investment in them and sometimes it’s in the number of edit pages, sometimes it’s in the paper stock, or sometimes it’s in the photography. Then at the same time, I’ll be honest, we’re being very aggressive and looking for efficiencies that consumers don’t see. A lot of our work we’re off-shoring, in terms of production process, so the notion of what the consumers touch and feel has to be better than ever. But we have to really focus on pulling out all of the unnecessary costs that are invisible to the end-users.
Samir Husni: One final question: What keeps David up at night?
David Carey: Wow! Well, in our case, we are so fortunate to work at Hearst…this great company at this moment in time, but I do know that everyday in scores of the proverbial garages, in Silicon Alley and Silicon Valley, you have entrepreneurs who wake up wanting to take down News Corp, Advance, Time Warner, and Hearst, and they do so fearlessly, and they do so by not following normal rules and orthodoxies of what can and can’t be done. So the only thing that I really worry about is we have to compete not against the other big multi-nationals, I think we know how to do that, we have to compete against a swarm of entrepreneurs; so how can we have a company of enormous scale, but have that scale aid us and not get in the way. That’s what we think of everyday, how to be large and nimble, blessed with so much talent with the ability to move fast. If we can achieve that then that’s a significant accomplishment.
Samir Husni: Thank you.