Hearst Magazines President David Carey to Samir Husni: Our Business Is One Part Innovation and One Part Aggressive Management. The Mr. Magazine™ InterviewDecember 8, 2014
“In fact, our new magazines plus digital, now account for 32% of the profits of our U.S. companies. These are businesses that 5 years ago either did not exist or were in a loss position.” David Carey
Just moments before he heads to a Hearst Board of Directors meeting, David Carey, president of Hearst Magazines, took few minutes to chat with me about the year that passed and the year to come. David has always been a strong believer the power and reach of print and digital as well as in the power of new magazines. He doesn’t see any of the aforementioned changing in 2015. David’s positivity is absolutely contagious.
How can it not be? After all, the last three new print titles launched by Hearst and their partners, together with the digital initiatives, is responsible for 32% of the profits at Hearst Magazines now.
So, between Hearst’s print and digital innovations and the aggressive acquisitions the company is making, David believes that Hearst is looking stronger than ever as it approaches a new year and a new season of engaging with its audience.
So sit back and enjoy the Mr. Magazine™ conversation with the president of Hearst Magazines, David Carey.
But first, the sound-bites:
On Hearst and his thoughts about 2014: I think 2014 was a very complex year. The bankruptcy of Source Interlink threw a big wrench into the middle of everyone’s single-copy strategies.
On why he believes so strongly in new launches: Our new magazines plus digital, now account for 32% of the profits of our U.S. companies. These are businesses that 5 years ago either did not exist or were in a loss position.
On his reaction to people who say digital is the future and there is no room for print: Our corporate mantra here is unbound, which indicates our belief in both our print and digital products. You have to be good at both, so we would strongly disagree that there is no future in print.
On the biggest stumbling block facing the industry in the coming year: The biggest opportunity for us and all media, I think, is we have to make sure our content is really engaging consumers. This is true if you’re a television producer or a magazine or newspaper publisher.
On the benefits of acquisitions: The managers that we pick up through these acquisitions are remarkable. So not only do you get the businesses and the underlying profits, you also get managers you can empower to help drive your next level of growth.
And now the lightly edited transcription of the Mr. Magazine™ interview with David Carey, President, Hearst magazines…
Samir Husni: As a leader in magazine media, how do you sum up 2014 and what are your predictions for the new year?
David Carey: I think 2014 was a very complex year. The bankruptcy of Source Interlink threw a big wrench into the middle of everyone’s single-copy strategies. The market is now recovering, thank goodness, but it made for a longer year than we would have liked.
The same rules and thinking that has been in place for some time is still valid: A. The industry needs to continue to rethink its orthodoxies; how does it organize its teams; how does it produce its content; how do print and digital expressions work together and how do you structure your investment in content?
We’ve been doing a lot of that here at Hearst and I was pleased with my year.
Samir Husni: Hearst is one of the few major companies that has launched and continues to launch print magazines, while others are still gambling that the future is digital. You launched Dr. Oz The Good Life, HGTV magazine, and the Food Network magazine; why do you still believe so strongly in print?
David Carey: And more to come; Trending New York and others that we are thinking about for the next year. We believe very strongly that both consumers and advertisers welcome new magazines. We have found that just like people enjoy seeing new TV shows, new books, films; new everything, people also like to see new magazines.
We do these mostly with partners, so that helps us because we start with an established brand name. And we’ve found that we can get support for these businesses very quickly.
Let’s take Dr. Oz, for example, which maybe a year ago had virtually no subscriptions at that point and now has about 530,000 subscriptions. And the first few issues sold over 300,000 copies at newsstand.
That’s indicative of all the opportunities, so we’ll continue to bring new products to market on a schedule of at least once every 24 months.
Samir Husni: One of the things that I’ve heard recently is that some are placing all their bets on digital, there is no future for print. How do you react to a statement like that?
David Carey: Our corporate mantra here is unbound, which indicates our belief in both our print and digital products. You have to be good at both, so we would strongly disagree that there is no future in print. But we know that in order to succeed, you’re also going to have to be a highly-skilled digital publisher and a very innovative print publisher. You can’t just do one; you have to do both.
Samir Husni: What do you see for the industry as a whole, not just Hearst, as the biggest stumbling block to be faced in 2015?
David Carey: The newsstand ecosystem will have calmed down in 2015, so that’ll be a plus. The biggest opportunity for us and all media, I think, is we have to make sure our content is really engaging consumers. This is true if you’re a television producer or a magazine or newspaper publisher.
Consumers today, by virtue of the amount of time they spend with a little device connected to their hand at all times, people spend 2-3 hours a day on the mobile web, even if you’re producing websites or magazines; you have to make sure that your content will pull people away from other things and engage with you. In this, it’s an absolute battle for readers’ attention and every media form under the sun is facing that same problem of getting people’s attention away from that short-form device focus and have them engage with their content.
Samir Husni: As you walk into the board meeting and one of the members asks you, “David, what will be your Tweet on New Year’s Eve?
David Carey: My Tweet on New Year’s Eve would be – my deepest thanks to my team for a year of creativity, strong management to their business and optimism.
Samir Husni: And for the rest of the world?
David Carey: This is a business that’s one part innovation and one part aggressive management of the business. We saw our web audiences explode and our digital businesses are now a key piece of our profit, very much so. We were losing money in digital in 2010, but today those profits are quite strong and very meaningful.
In fact, our new magazines plus digital, now account for 32% of the profits of our U.S. companies. These are businesses that 5 years ago either did not exist or were in a loss position.
So, I can only say to that – thank goodness we took those risks and thank goodness these teams executed so well because our U.S. companies would be far less profitable if we had not gone down those paths.
Five years ago those numbers from that same set of properties would have been a bracketed number and now it’s a pretty big number. And that means we keep at it, in terms of new products. We’ll keep at the process and our goal is that all of them work, some may not along the way, but that’s OK too.
Samir Husni: I also noticed that you’re buying back a lot of your franchises overseas; I heard in Moscow that Hearst is coming to buy Cosmo again and they did it in Amsterdam; is that a new strategy for the company as a whole, to reacquire your franchises from overseas?
David Carey: We’ve been on that path for a bit. We bought Cosmo in Italy, Amsterdam and we have some other markets planned. It’s not an exclusive strategy except that when those moments come up, we will act upon them. I think especially on the digital front that it helps when we can coordinate all the digital activities under an owned platform.
But we have partners around the world and we’re proud of them. This is more led by our partners and the moves they make and they might be restructuring their businesses. Just to be clear, we’re not pushing anybody out; it’s more a function of if they’re going to restructure their businesses anyway, we’re offering an alternative.
One last thing, since we’re talking about acquisitions, we also get fantastic diversification of management. The managers that we pick up through these acquisitions are remarkable. So not only do you get the businesses and the underlying profits, you also get managers you can empower to help drive your next level of growth. We think not only about new launches, but future acquisitions as well. It’s all important.
Samir Husni: Thank you.