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Hearst Magazines: Strong & Steady Leadership From Two Men Who Know How To Sail Through The Disruptive Waters Of Constant Change – The Mr. Magazine™ Interview With David Carey, President & Michael Clinton, President, Marketing, Publishing Director, Hearst Magazines…

December 4, 2017

“We like to make money. We think there is money in print and more print, and we like to make money and grow profits in digital. You can’t have one be primary and one be secondary. We have to be good at both. The businesses have some things in common, but also, a lot of things that are not in common with each other. And we have to be very skilled at running good, solidly-profitable businesses in all of the areas that we operate.” David Carey…

“The only thing that’s a given is constant change. I think that when you visit us five years from now, I believe we’ll look back on 2017 as a period of calm, by comparison to what comes next. I absolutely believe that. The rate of change only picks up from here. I think we’re pretty good at managing, but we can be even better at it. And that’s not just the magazine business, that’s everything. What’s the job? Are we in the magazine business or the media business, or are we in the managing change in a confident manner business? I think I’ll take the latter, in terms of our team at the top of the enterprise, but even the people who show up, who come in everyday, and contribute so much.” David Carey…

“I think that when you have a natural curiosity of the marketplace and you’ve always got your antenna up as to where is the zeitgeist or where is the consumer, such as the discovery of The Pioneer Woman. That really came out of a conversation that we had with a woman who is a major retailer and she surfaced that The Pioneer Woman was a phenomena and that it was a phenomena within the center of the country, and so we were very curious. We asked if we could meet Ree Drummond and she came to New York. We heard her story and told her how unbelievably incredible we thought it was and that we wanted to test a magazine. And as you know, it’s been a wildly successful experiment thus far. We’ve had an over 70 percent sell-through; we’ve gone back to press; there has been an enormous take rate on the subscriptions.” Michael Clinton…

“I would add too that this was the year that many people said would come at some point, meaning there would be some natural consolidation in the industry. And the Time Inc. stuff has been going on for several years, but I think that the anticipation of consolidation was always in the air. We acquired Rodale; Meredith, Time Inc.; Wenner sells off two properties. The consolidation has begun, in terms of the industry, which is a natural thing.” Michael Clinton…

David Carey, president, Hearst Magazines.

Michael Clinton, president, marketing, publishing director, Hearst Magazines.

When the future history books are written about magazines and magazine media, two names will be prominently listed between those covers: David Carey, president and Michael Clinton, president, marketing, publishing director, Hearst Magazines. The top leadership are so in sync, so coordinated when it comes to their thinking processes, the two can finish each other’s sentences and answer each other’s questions readily and correctly. But this comes as no surprise to Mr. Magazine™ as the entire team at Hearst is a natural and harmonious balance of skill and talent, from the tiptop, all the way down the chain, with no one at the organization more eagerly willing to bestow credit on everyone than David and Michael.

Hearst has been synonymous with risk-taking for generations. According to David, this is the nature of Hearst, part of its DNA. From the day Helen Gurley Brown walked through the doors of the then small company and announced that she had a fantastic idea of basing a magazine on her bestselling book “Sex and the Single Girl,” which became the catalyst for what we know today as Cosmopolitan, to present-day partnerships with brands like The Pioneer Woman and cable TV; and the more recent acquisition of Rodale; Hearst is a force to be reckoned with in the world of magazines and business media. And the continued success of those insightful past contributions and the new affiliations of today can be attributed to the stalwart and innovative leadership of the company’s current captains of the ship, David and Michael.

I spoke with both of them on a recent trip to New York, and the conversation was both lively and informative. Our conversation took place in David’s office on the 43rd floor of the Hearst Tower. Strength in leadership today has never been more vital with the constant changes taking place in the marketplace and in magazine media. And according to David, constant change is the only given going on today. And Mr. Magazine™ would have to agree. From the disruptions of the day to the consolidations that are sometimes surprising, yet apt to happen, the landscape is rapidly becoming a more cocooned environment, with the three top publishing companies coming to the forefront to lead the way into the future: Hearst, Meredith, and Condé Nast.

David, Michael and I spent a moment in time talking about these changes, and about the past and future of magazine media, Hearst in particular. About their mantra of Print Proud, Digital Smart that Mr. Magazine™ “borrowed” as the theme for the next ACT Experience, with their knowledge, of course. And when it comes to reflecting upon 2017 as it draws to a close, as David put it, if we chat again in five years, it may actually be determined that 2017 was known as a period of calm, at least by comparison to what might be coming next. The “calm before the storm,” as it were.

But if you’re about to sail dangerously choppy waters, there aren’t two captains with any steadier hands or more determined and integrated thought processes than David and Michael, so you’re in good shape. And now the Mr. Magazine™ in depth interview with David Carey and Michael Clinton.

But first the sound-bites:

David Carey, president, Hearst Magazines.

On whether they think stability and constants in leadership make media businesses and cultures within organizations stronger (David Carey): The businesses that focused on either the wrong things, or had cultures that couldn’t adapt for the future; of course, people always misinterpret Charles Darwin when it comes to that, and Darwin didn’t say it was the strongest that could survive, it was those who could adapt. And I think you’re seeing this play out. Time Inc. used to be the mightiest and largest company, but they’ve had several leadership teams in several years, against a backdrop of change. And the outcome was not so favorable. And we’ve had very stable leadership now for some time, both at the corporate level and the division level, as has Meredith. And I think we’re both flexing our muscles.

On how Hearst has managed not to have a problem with culture change within its organization (David Carey): This is the nature of Hearst, when Hearst was a small company, Helen Gurley Brown walked through our doors with this crazy notion of a magazine roughly based on her bestselling book” Sex and the Single Girl.” She had never edited a magazine in her life. They give her Cosmopolitan, so talk about taking risks. Here’s an existing business and she changes it into something that had no resemblance to what it looked like before she came along. And of course, that took off.

On how Hearst has managed not to have a problem with culture change within its organization (Michael Clinton): Also, we as a company have always been first-movers in things. I remember on the ground floor of this small building, our new media lab, and no one before had done that. And so, whether it’s putting your toe into the new media lab or into cable television at the time, or into today’s world, such as Snapchat or other venues, I think we’ve just always been and our culture has always been curious about how we can play into new, emerging businesses.

Michael Clinton, president, marketing, publishing director, Hearst Magazines.

On how Hearst uncovers the not-so-obvious when it comes to its “magic formula” for ideas (Michael Clinton): I think that when you have a natural curiosity of the marketplace and you’ve always got your antenna up as to where is the zeitgeist or where is the consumer, such as the discovery of The Pioneer Woman. That really came out of a conversation that we had with a woman who is a major retailer and she surfaced that The Pioneer Woman was a phenomena and that it was a phenomena within the center of the country, and so we were very curious. We asked if we could meet Ree Drummond and she came to New York. We heard her story and told her how unbelievably incredible we thought it was and that we wanted to test a magazine. And as you know, it’s been a wildly successful experiment thus far.

On how Hearst uncovers the not-so-obvious when it comes to its “magic formula” for ideas (David Carey): We’re proud to talk about our successes, and we don’t boast about our failures, but we do think about trying new things; if you don’t strike out sometimes, you’re not at bat enough. So, we do all sorts of things and most of them have worked, and the things that haven’t worked we’ve learned from. We can’t be afraid to do that.

On the purchase of Rodale and what’s next for those titles with Hearst (David Carey): We hope to close in January, 2018, and we’ll take ownership and start to connect the very best practices in both directions. They’ve done a number of remarkable things and we learn from that, and we’ve done things that we can use, and we’ll start to merge the enterprises in January, February and March. We have great integration teams as we lift the business and shift it to Hearst and integrate it into our operation.

On the purchase of Rodale and what’s next for those titles with Hearst (Michael Clinton): It’s a great tuck-in to our existing portfolio, plus it, as David said, dimensionalizes it in another way in the health and fitness space. We sort of do health and fitness sporadically throughout the different magazines, but this gives us a real foothold in the space. And so it was a beautifully strategic acquisition for us, in terms of not just the consumer base, but the advertising base.

On whether Hearst and Rodale will be a perfect marriage (Michael Clinton): Why not? We had perfect marriages with Hachette when we acquired it. I think what is important is that we’re a publishing company. So, a publishing company acquiring a publishing company has a really good understanding of the idiosyncrasies of our business. So, we’re strategic. I think a different conversation might be had if we were not a publishing company.

On whether Hearst and Rodale will be a perfect marriage (David Carey): And we’ve published these magazines (titles) in international markets for many years; we’ve had the joint venture in the U.K. now for more than a decade, with Men’s Health, Women’s Health and Runner’s World. We’ve published Men’s Health and Women’s Health in the Netherlands and in China and Japan. So, we’ve known these brands and their potential, and in that particular way we had, not an inside track, but we had an intimate understanding of what these titles can do. So, that gave us a great appreciation.

On how they would feel if when the future history books are written, much of it is about Hearst (David Carey): We love the business and it’s good to be good at something, right?

On how they would feel if when the future history books are written, much of it is about Hearst (Michael Clinton): This is my fortieth year in the business, so I think that for those of us who have spent our careers in this business, we’ve chosen to be in this business. We just had psychologist, Angela Duckworth speak and she’s written a great book called “Grit: The Power of Passion and Perseverance,” and it’s about how that passion and perseverance wins the day. And I think that we can say that we both have passion for this business and I believe that says a lot.

On how they turned passion into monetary skills (David Carey): Well, it’s not just us. We have a very efficient leadership team and we have a team where everyone has really unique skills. And that’s always nice. I think the other thing about this company is that the leadership team is small and we have this big global business. And so, the politics at Hearst are the lowest of any big organization, because there’s a certain culture here where people roll up their sleeves and they get it done; we pass things back and forth and that’s a very important piece.

On how they turned passion into monetary skills (Michael Clinton): When you have a lot of layers and levels, there’s a lot of maneuvering and turf wars and protectionism, but I think we’re so efficient in our organization and we go right into the operators, so it’s just a very different model.

On how they would characterize magazine media in 2017 (David Carey): Well, I think you have to go backward. I recently watched a Ken Burns’ Vietnam PBS series; one of the episodes from 1968, which I think was called “Things Fall Apart,” and for the sixties, sometimes things were so great, and then you’re watching this episode and you had political unrest, the Democratic Convention in Chicago. You had all of the anti-war movements and the media questioning what we were doing in Vietnam. You had the sexual revolution coming in right on top of all of this and you felt every day was unpredictable. And that’s kind of 2017.

On how they would characterize magazine media in 2017 (Michael Clinton): I would add too that this was the year that many people said would come at some point, meaning there would be some natural consolidation in the industry. And the Time Inc. stuff has been going on for several years, but I think that the anticipation of consolidation was always in the air. We acquired Rodale; Meredith, Time Inc.; Wenner sells off two properties. The consolidation has begun, in terms of the industry, which is a natural thing.

On being Print Proud, Digital Smart (David Carey): We like to make money. We think there is money in print and more print, and we like to make money and grow profits in digital. You can’t have one be primary and one be secondary. We have to be good at both. The businesses have some things in common, but also, a lot of things that are not in common with each other. And we have to be very skilled at running good, solidly-profitable businesses in all of the areas that we operate.

On what’s next for Hearst in 2018 (David Carey): Hopefully, a new product and continuing that tradition. But you know, we’re heads down right now on the road to a Rodale integration. This is a company that likes to plan its work and work its plans. We know that for the first four or five months, we have to get a smooth integration of this business, and more partnerships. The more things change out there, the more that people seek us out to create new businesses. Some we’re discussing; some, that news will come more.

On any landmines they see that need to be avoided (Michael Clinton): I think there’s a lot of confusion, and I’m speaking from the ad-revenue side now. There is a lot of confusion in the marketplace about where people should be spending their money. There was a huge digital hangover and this was a very apparent theme at the ANA meeting in October. There seems to have been a very big retrenchment. Overall, there are a lot of landmines in what is the digital ecosystem going to look like. And that plays well for us, because of all the things that we’ve said; trusted brands, safe environment, first-party data.

On any landmines they see that need to be avoided (David Carey): I think there is a growing number of people that are so upended by all the political noise that it drives them back to comfortable lifestyle media. There is a lot of crazy stuff, and if you read every single word, every single day, it can terrify you. A number of people in the last month or so have told me that putting their phones down and getting out of the maelstrom of the news cycle to enjoy our products, such as Food Network magazine, HGTV, and Harper’s Bazaar, is great.

On what each would have tattooed upon their brains that would be there forever and no one could ever forget about them (David Carey): I’ll answer for Michael: endless creativity eternal optimism, and boundless energy.

On what each would have tattooed upon their brains that would be there forever and no one could ever forget about them (Michael Clinton): David would be: steady hand. What an organization wants in a leader is someone who is unflappable and has a steady hand; who has a rational point of view and doesn’t get wrapped up in the noise. And keeps the ship steering well, and I think David has enormous talent in that space, because there is a lot of chaos in our industry and our world.

On what keeps them up at night (Michael Clinton): (Laughs) My five-month-old puppy.

On what keeps them up at night (David Carey): The silence in our home while all the kids are gone.

And now the lightly edited transcript of the Mr. Magazine™ interview with David Carey, president & Michael Clinton, president, marketing, publishing director, Hearst Magazines.

Surrounded by two magazine media industry giants, David Carey (r) and Michael Clinton.

Samir Husni: Let us start with the easy question, how do you describe the magazine and magazine media business today?

David Carey: The businesses that focused on either the wrong things, or had cultures that couldn’t adapt for the future; of course, people always misinterpret Charles Darwin when it comes to that, and Darwin didn’t say it was the strongest that could survive, it was those who could adapt. And I think you’re seeing this play out. Time Inc. used to be the mightiest and largest company, but they’ve had several leadership teams in several years, against a backdrop of change. And the outcome was not so favorable.

And we’ve had very stable leadership now for some time, both at the corporate level and the division level, as has Meredith. And I think we’re both flexing our muscles. We feel so fortunate that we work for a large private enterprise that likes to invest in its core businesses; that is open to taking risks; and has a team of people, not just on this corporate floor, but throughout the whole organization that naturally grow, change and evolve at the fastest rate in the business. And that’s what gives us a strong and confident position as a media business. Not just the magazine business; the TV business; the cable business; the digital business; and everything is going through such change. And I think we have the best seat in the house.

Samir Husni: It seems many blame the lack of change on the culture, that it was the culture in the organization that was the toughest thing to change. How has Hearst managed not to have that problem?

David Carey: This is the nature of Hearst, when Hearst was a small company, Helen Gurley Brown walked through our doors with this crazy notion of a magazine roughly based on her bestselling book” Sex and the Single Girl.” She had never edited a magazine in her life. They give her Cosmopolitan, so talk about taking risks. Here’s an existing business and she changes it into something that had no resemblance to what it looked like before she came along. And of course, that took off.

And then Frank Bennack had the great wisdom and vision to invest in the cable business, forming a partnership with Capital Cities initially to launch A&E. Then we got the chance to buy 20 percent of ESPN, and those were small businesses that became big businesses. And those helped fund our entry into business media and buying 80 percent of Fitch Ratings and medical and transportation data businesses and those became more successful. And that got reinvested back into the magazine company through the acquisition of Lagardère; the creation of our ventures with Food Network, as well as our two tests from last year.

So, the overall corporation is one that just feels comfortable with that. I think the media businesses that have stuck to a couple of verticals now regret that. And Michael and I are the beneficiaries of it and it’s our job to advance it, but the corporation long before we arrived had this remarkable dexterity to look at a lot of different businesses and see that a tapestry of both information and media businesses was the best possible position for success. So, it’s kind of embedded in what we do.

We talk about our partnerships all of the time, such as Airbnb and The Pioneer Woman, but these partnership strategies have been in place for decades and we’re just the latest advocates of it. But this has been honed by generations of executives with our company.

Michael Clinton: Also, we as a company have always been first-movers in things. I remember on the ground floor of this small building, our new media lab, and no one before had done that. And so, whether it’s putting your toe into the new media lab or into cable television at the time, or into today’s world, such as Snapchat or other venues, I think we’ve just always been and our culture has always been curious about how we can play into new, emerging businesses. Some are successful; some aren’t. Some we retrench from and some we move forward on, but I think that’s part of the fluidity of the cultural mentality.

Samir Husni: As far as a “magic formula,” someone told me once that if it’s obvious; it’s too late. How do you see the not-so-obvious and how do you follow up with that?

Michael Clinton: I think that when you have a natural curiosity of the marketplace and you’ve always got your antenna up as to where is the zeitgeist or where is the consumer, such as the discovery of The Pioneer Woman. That really came out of a conversation that we had with a woman who is a major retailer and she surfaced that The Pioneer Woman was a phenomena and that it was a phenomena within the center of the country, and so we were very curious. We asked if we could meet Ree Drummond and she came to New York. We heard her story and told her how unbelievably incredible we thought it was and that we wanted to test a magazine. And as you know, it’s been a wildly successful experiment thus far. We’ve had an over 70 percent sell-through; we’ve gone back to press; there has been an enormous take rate on the subscriptions.

So, I think having a natural curiosity about what’s new, what’s next, but not just in the trendy stuff, in all parts of the cultures. We live on an island and we live in the bubble, so being curious about what’s going on across that river; we’re very relentless about that. And The Pioneer Woman is a great example of that.

David Carey: We’re proud to talk about our successes, and we don’t boast about our failures, but we do think about trying new things; if you don’t strike out sometimes, you’re not at bat enough. So, we do all sorts of things and most of them have worked, and the things that haven’t worked we’ve learned from. We can’t be afraid to do that.

Some companies are afraid to fail; now, the way we approach this is we publish two issues or four issues, so we kind of moderate the investment. We don’t go out and say this is going to be the biggest thing the world has ever seen; we let the marketplace test it and to pace what we do.

And the importance of things like Airbnb is we now have other big digital organizations, big technology companies, engage with us. They see the wisdom of creating physical media to reinforce their brands. So, every door opens a new door.

I wasn’t here during the dark days of 2008, when Food Network was launched, Michael, Cathie (Black) and Ellen (Levine) were, and it turned out to be, as you know, a remarkable success; number one in the category, dominant in every way. And that led to HGTV; that led to The Pioneer Woman; now Discovery acquires Scripps, so if you just stay at it and you’re open-minded, you never know what path you can take as these businesses evolve from one step to the next step and beyond. And we love that process.

Samir Husni: Last time we chatted, you told me that Hearst Magazines had doubled in size since you came onboard, and now you’ve acquired Rodale.

David Carey: Rodale is about 20 to 25 percent of our U.S. business, and is the equivalent of adding a little less than 10 percent of our global business, in terms of the overall international company.

Samir Husni: What’s next for Rodale titles with Hearst?

David Carey: We hope to close in January, 2018, and we’ll take ownership and start to connect the very best practices in both directions. They’ve done a number of remarkable things and we learn from that, and we’ve done things that we can use, and we’ll start to merge the enterprises in January, February and March. We have great integration teams as we lift the business and shift it to Hearst and integrate it into our operation.

The work streams are intense, because there’s everything from how do you pay people to benefits’ plans to keeping the lights on to billing advertisers to the technology systems. We recently had a long meeting and we feel so fortunate that our folks are just really good at this, because there are a hundred different work streams underway.

We have great admiration for the Rodale brands and for the categories they serve. This kind of “Wellthy” movement, which is their word, as you spell it out WELL-THY, is one that we very much believe in, not only in the U.S., but around the world.

And I think for Rodale, throughout the whole media business, as you’re seeing evidenced with AT&T and Time Warner, and so on, scale matters more than ever. So, it’s our hope that those brands connected to a larger scale enterprise will become more successful than they have been most recently.

Michael Clinton: It’s a great tuck-in to our existing portfolio, plus it, as David said, dimensionalizes it in another way in the health and fitness space. We sort of do health and fitness sporadically throughout the different magazines, but this gives us a real foothold in the space. And so it was a beautifully strategic acquisition for us, in terms of not just the consumer base, but the advertising base.

Samir Husni: It feels like the perfect wedding. Is it going to be the perfect marriage?

Michael Clinton: Why not? We had a great marriage with Hachette when we acquired it. I think what is important is that we’re a publishing company. So, a publishing company acquiring a publishing company has a really good understanding of the idiosyncrasies of our business. So, we’re strategic. I think a different conversation might be had if we were not a publishing company.

If you go and talk to people who came to us from Hachette, you would find that they would say they found a beautiful home; a home that understood them and understood their business, and that it was a very smooth and successful transition. So, I don’t see why this should be any different.

David Carey: And we’ve published these magazines (titles) in international markets for many years; we’ve had the joint venture in the U.K. now for more than a decade, with Men’s Health, Women’s Health and Runner’s World. We’ve published Men’s Health and Women’s Health in the Netherlands and in China and Japan. So, we’ve known these brands and their potential, and in that particular way we had, not an inside track, but we had an intimate understanding of what these titles can do. So, that gave us a great appreciation.

Rodale is important to us, because we couldn’t imagine another acquisition that had the type of natural fit with Hearst, which you identified as well. So, that’s why to us right when the announcement went out in June that it was for sale, we felt this was important. We’ll of course hope to expand our company through acquisitions into the future, but this one really felt as hand-in-glove as we could have imagined.

Samir Husni: When the future magazine history books about the 21st century are written, somehow there are a lot of similarities between now and what happened in the 1920s with Henry Luce and DeWitt Wallace, but this time it took place at Hearst, with David Carey and Michael Clinton. Do you feel that’s a huge responsibility or does it feel natural and like something that just happened?

David Carey: We love the business and it’s good to be good at something, right?

Michael Clinton: We’ve both been in it a long time. I’ve been in it for 40 years.

David Carey: And I’ve been in it for 33 years.

Michael Clinton: This is my fortieth year in the business, so I think that for those of us who have spent our careers in this business, we’ve chosen to be in this business. We just had psychologist, Angela Duckworth speak and she’s written a great book called “Grit: The Power of Passion and Perseverance,” and it’s about how that passion and perseverance wins the day. And I think that we can say that we both have passion for this business and I believe that says a lot. And we’ve obviously had many options and opportunities to do other things.

Samir Husni: But the difference is a lot of people have passion, but they don’t have the business skills to monetize that passion. How did you do that?

David Carey: Well, it’s not just us. We have a very efficient leadership team and we have a team where everyone has really unique skills. And that’s always nice. I think the other thing about this company is that the leadership team is small; it’s Michael, Joanna (Coles), Troy (Young), Debi (Chirichella), and myself, and we have this big global business. And so, the politics at Hearst are the lowest of any big organization, because there’s a certain culture here where people roll up their sleeves and they get it done; we pass things back and forth and that’s a very important piece.

And I think with some of the other companies you’ve seen, the politics are really kind of eating the companies from within a bit, not the publication; but you’ve seen Jack Griffin, a really able manager get thrown out, just all those sorts of crazy things that got in the way. And those were worrisome signs. We haven’t had any of that.

Michael Clinton: When you have a lot of layers and levels, layers and levels, there’s a lot of maneuvering and turf wars and protectionism, but I think we’re so efficient in our organization and we go right into the operators, so it’s just a very different model.

David Carey: If you think of the structures of other companies, there’s no other company that is global and private and has the access to capital that we do and likes to experiment. Those are unique Hearst DNA elements and it’s our job to leverage that.

We’re doing acquisitions in other markets around the world; we’re testing things all over and learning from everything that we do, that we don’t think our competition has it. No one else has their international business integrated in with the domestic business.

So, we get to do things relative to investments and strategies and acquisitions that we get to play for the long term. We’re grateful that Mr. Hearst created a trust that opens the company and that has enabled our division and other divisions to be entrepreneurial, even within the confines of a very large corporation.

Samir Husni: If you were to characterize 2017 in magazine media, what would you say?

David Carey: Well, I think you have to go backward. I recently watched a Ken Burns’ Vietnam PBS series; one of the episodes from 1968, which I think was called “Things Fall Apart,” and for the sixties, sometimes things were so great, and then you’re watching this episode and you had political unrest, the Democratic Convention in Chicago. You had all of the anti-war movements and the media questioning what we were doing in Vietnam. You had the sexual revolution coming in right on top of all of this and you felt every day was unpredictable. And that’s kind of 2017.

We have political unrest, that news plays out every day. Then you have media sector changes, not just magazines, everything about media. Then you have the magazine industry. And so, it’s change upon change upon change. And I think that what it teaches executives and corporations is the need to be strong and confident through this. We have employees and others who may ask does the world feel a little bouncy, even at the national level, let alone the industry level. It’s our job to lead them through this process.

There’s always opportunities, even when crazy, crazy disruption is happening. There are always companies that are winners. And companies are allowed to win, but they can also commit suicide. It’s all allowed. And we’re always thinking about how we can make our company a winner. I kind of joke, that chaos is going to be our friend and it is going to propel us forward not hold us back.

Michael Clinton: I would add too that this was the year that many people said would come at some point, meaning there would be some natural consolidation in the industry. And the Time Inc. stuff has been going on for several years, but I think that the anticipation of consolidation was always in the air. We acquired Rodale; Meredith, Time Inc.; Wenner sells off two properties. The consolidation has begun, in terms of the industry, which is a natural thing.

I was making the analogy recently; you may not remember Burdine’s and Kaufmann’s and Rich’s, and all of these regional department stores that existed. They all sort of consolidated. Then you had Macy’s, National, etc.

Pick an industry; airline industry; retail industry; just pick one and consolidation is ultimately something that happens in the business cycle. And I think in the media cycle with magazines, that was a natural thing that was going to happen. It started this year and I think it will make the companies that are committed as we are, stronger and have better products – stronger products, better marketplace dynamics. And it will help the industry be stronger, as opposed to fragmented.

David Carey: And we’ve seen the digital business go through different cycles for 20-plus years, and so the tone of the last few months, which had some of the shiniest objects, some of these companies potentially having futures that seemed a little less certain, are also a net benefit for companies like Hearst or Condé Nast or Meredith, in that, from a talent standpoint, that’s not so easy. Not everything is going to turn into Instagram; 12 employees, a billion dollars.

And these companies, which have for many years been bad businesses, but put a lot of spin on the ball; I sometimes reference my favorite movie “Toy Story.” Buzz and Woody, and you have the skeptical Woody who says, “Buzz, that’s not flying, that’s falling with style.” One of those great lines from Pixar.

Some of these pure play digital businesses, and some will succeed and have fantastic futures, but some have simply been “falling with style.” And I think the news that will be flowing in for the next six to 12 months are going to be those companies that never really had much of a real business, but put a lot of spin on the ball. And at the same time, it will be companies like ours, who have become far more skilled at digital, growing audiences, monetizing, producing video; those skills have matured here and elsewhere, and that’ll be good for us.

The pendulum is going to swing a bit in companies of trust and credibility. There’s been a lot of discussion on ad fraud and digital. Companies like ours would never do that. We replay 50 years into the future for reputation, not 50 hours. And so, there are a lot of elements, in terms of what will surely be the downfall of many ad-supported, independent, venture-backed, digital businesses, but that’s going to be a very important silver lining for the big publishers next year.

Michael Clinton: I just had this discussion recently with the CEO of a media agency. It was the number one issue, ad fraud, in terms of where the monies are going and making sure that it’s real people and all of the above.

Samir Husni: One of the things that I learned from the two of you and actually stole for the theme of my next ACT Experience in April, 2018 is the phrase: Print Proud, Digital Smart, based on an interview I did with Michael. I gave you credit, Michael. (Laughs)

Michael Clinton: (Laughs).

Samir Husni: Hearst has never ignored print, but you also invested in digital. In fact, you invested in print when others were ignoring print…

Michael Clinton: Or running away from print.

David Carey: We like to make money. We think there is money in print and more print, and we a like to make money and grow profits in digital. You can’t have one be primary and one be secondary. We have to be good at both. The businesses have some things in common, but also, a lot of things that are not in common with each other. And we have to be very skilled at running good, solidly-profitable businesses in all of the areas that we operate.

Samir Husni: What’s next? What can we expect from Hearst in 2018?

David Carey: Hopefully, a new product and continuing that tradition. But you know, we’re heads down right now on the road to a Rodale integration. This is a company that likes to plan its work and work its plans. We know that for the first four or five months, we have to get a smooth integration of this business, and more partnerships. The more things change out there, the more that people seek us out to create new businesses. Some we’re discussing; some, that news will come more.

And hopefully, there will be more opportunities for, not just the leadership teams, but for the rank and file. The people here who really make it happen.

Samir Husni: Any landmines you see that you need to avoid?

Michael Clinton: I think there’s a lot of confusion, and I’m speaking from the ad-revenue side now. There is a lot of confusion in the marketplace about where people should be spending their money. There was a huge digital hangover and this was a very apparent theme at the ANA meeting in October. There seems to have been a very big retrenchment.

Overall, there are a lot of landmines in what is the digital ecosystem going to look like. And that plays well for us, because of all the things that we’ve said; trusted brands, safe environment, first-party data. I’m sure you saw the magazine industry ad campaign that was out there and it leans into that discussion.

So, we view that we have a moment in time to really flex our muscles in this confusion, because I think marketers are really beginning to say, we need to really think hard about where we’re placing our money, and maybe we should step back before we step forward. And we’re well-placed there, so the landmine is the overall ecosystem, but the opportunity is that we have the stuff to lean forward into it.

David Carey: I think there is a growing number of people that are so upended by all the political noise that it drives them back to comfortable lifestyle media. There is a lot of crazy stuff, and if you read every single word, every single day, it can terrify you. A number of people in the last month or so have told me that putting their phones down and getting out of the maelstrom of the news cycle to enjoy our products, such as Food Network magazine, HGTV, and Harper’s Bazaar, is great.

I do think that we’re a year into great political change. And it seems everyone may be feeling a little seasick, but that should be good for all types of media.

Samir Husni: If you could have one thing tattooed upon your brain that no one would ever forget about you, what would it be?

David Carey: I’ll answer for Michael: endless creativity, eternal optimism, and boundless energy.

Samir Husni: (Laughs) Would you like to answer for David?

Michael Clinton: Yes, I think David would be: steady hand. What an organization wants in a leader is someone who is unflappable and has a steady hand; who has a rational point of view and doesn’t get wrapped up in the noise. And keeps the ship steering well, and I think David has enormous talent in that space, because there is a lot of chaos in our industry and our world.

David Carey: (Laughs) See, we can finish each other’s answers. This is going to be a great moment for us, and that doesn’t mean that every day is super-easy, because that would be naive to say that.

Sometimes when we speak to young people, college students will come in or we’ll speak to groups of them, and they’ll remark that the media business seems kind of crazy and I’ll usually say, you just have to pick a business, because I’m not sure where the calm waters are. The automotive business, where they’re worried about autonomous driving, which would upend everything. Retail or the hotel business, where you now have people who own apartments and homes all around you, that are your competitors. If you want to be a teacher potentially, but education has its own shifts as well.

So, the only thing that’s a given is constant change. I think that when you visit us five years from now, I believe we’ll look back on 2017 as a period of calm, by comparison to what comes next. I absolutely believe that. The rate of change only picks up from here. I think we’re pretty good at managing, but we can be even better at it. And that’s not just the magazine business, that’s everything. What’s the job? Are we in the magazine business or the media business, or are we in the managing change in a confident manner business? I think I’ll take the latter, in terms of our team at the top of the enterprise, but even the people who show up, who come in everyday, and contribute so much.

We just have to constantly evolve every single day. And when you get it right, it’s so satisfying. Sometimes you don’t get it right, of course, those days are more frustrating, but we get it right a lot. And it’s our job to continue that streak.

We see a zillion opportunities, in terms of what we do, how we do it, and where we do it. We work long days, so we’re limited by 10 or 11 hours a day. Part of our style is do something right, execute it well, and move on to the next one. We’re capacity-constrained in that way, but we have all sorts of ideas about what comes next for us.

Apple already has the iPhone 11 designed in their minds, and it’s our job to do the same thing. Kick around things internally, tweak things; it’s our job to keep that fresh pipeline of new products and new ideas, new ways of doing business, flowing. We opened a video studio next door, we own the commercial space, and the building next to us is 26,000 sq. ft.. We have six or seven video bays producing content every hour of every day, with more and more to come.

Samir Husni: Okay, Michael, what keeps you up at night?

Michael Clinton: (Laughs) My five-month-old puppy.

Samir Husni: (Laughs) David, what keeps you up?

David Carey: The silence in our home while all the kids are gone.

Samir Husni: (Laughs) Thank you both.

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