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Active Interest Media’s President & CEO, Andy Clurman, To Samir “Mr. Magazine™” Husni: “We’re Going To Market With The Service Business, More Than The Product Business.” The Mr. Magazine Interview…

January 2, 2020

Mr. Magazine™ Presents… Conversations With Magazine and Magazine Media Leaders…

Diversifying and expanding their business and their audiences is something that Andy Clurman, president & CEO of Active Interest Media (AIM), sees as a New Year’s fact more than a New Year’s resolution when it comes to the company. I spoke with Andy recently for this Mr. Magazine™ series with the movers and shakers of the magazine world and Andy was adamant:

“For the most part anything that is competing in the broader universe for audience and ad dollars really should be well on their way to the strategy and reality of a diversified model or I think you’re going to see a continued attrition of brands and businesses that didn’t make that leap.”

Andy’s word for 2020 would have to be diversify. And in today’s media realms, that would seem to be good strategy for the goals AIM is trying to achieve in this New Year. So, Mr. Magazine™ now invites you to sit back and enjoy this latest conversation as we continue the series with the magazine and magazine media executives that make the industry world go-round.

But first the sound-bites:

On his assessment of the future of magazines and magazine media: I think we’ve officially answered the post-magazine era as a one-dimensional business. And anybody who hasn’t moved to really diversify and not just expand their audience to multiplatform, but figured out how to build other revenue streams off those multiplatform extensions… I mean, I’m sure there are some things on a regional or local level that are probably vibrant and healthy as standalone magazines. There are some niche categories, special interest categories that are still viable and sustainable as a single magazine, but for the most part anything that is competing in the broader universe for audience and ad dollars really should be well on their way to the strategy and reality of a diversified model or I think you’re going to see a continued attrition of brands and businesses that didn’t make that leap.

On three accomplishments Active Interest Media had for 2019: The three biggest were, and part of an overall mantra we’ve had, trying to convert our relationship with the audience, subscribers and marketers from one that’s more transactional to one that’s more of a membership model, which is not a radical idea, but we’ve actually had a lot of traction in building out membership programs. We’ve launched six of them and we have four more in the queue across different brand groups. And they have different combinations of benefits and services. And in these early days we’re seeing some good traction in turning a $15-$19 a year subscriber into a $50 to $200 a year member.

On his biggest challenge for 2019: I think the biggest challenge continues to be the downward pressure on all things advertising revenue. And sometimes that’s in the form of print, sometimes that’s sponsorships, but that world continues to get on the margin, not universally, but on the margin, it continues to disappoint and get tougher. The antidote for that is what I was talking about first, we’ve really accelerated our new product/new service development and launch. If I’m frustrated or disappointed about anything, it’s just the time it takes to ideate, innovate and execute on new products/new services and get them to scale up in the marketplace.

On why he thinks more people aren’t racing to imitate AIM’s success and way of doing things: One reason is we have a physical plant and a production machine, a factory that produces. The principle set of products that this factory produced overtime was magazines that had a very specific set of deadlines, production cycles and supply chains and organizations that were built around them. And the concept of product development or acquisitions or things that would be the components to transforming and diversifying the business, except for maybe the largest companies that have strategic planning departments.

On teaching a course on innovation in Virtual and Augmented Reality, Apps and Licensing, at the University of Colorado (Boulder) and whether he’s given up on teaching students how to innovate in print: No, in fact that is this semester’s assignment, because one of the reasons I agreed to do this is I thought I could learn from them, and while I have millennial children, I don’t have them captive in a classroom for a whole semester, so it’s a way for me to go to school on what these kids are thinking, where they’re heading; where they see media heading, and I think we can learn from them as much as they can learn from us.

On whether he believes social media is friend or foe to magazine media today: I would say that unless you are really some kind of Luddite and you don’t see any virtue at all in the benefits of digital media, it has been a friend to magazine media. It’s allowed us to radically expand our audiences and our reach across all kinds of borders and generations. It’s given us sales and marketing channels that we didn’t have in an analog world. I think the greatest competition and challenge has been mostly limited to the advertising line.

On anything up and coming that he can talk about: We’ve put a lot of time, energy and effort into these memberships, which, as I said, all have very different assets embedded in them, different marketing plans, different audiences. Now that we’ve spent the year designing them, testing them, researching them, 2020 is going to be the year to really launch and scale them. And we think that can be a game changer for us in terms of how we relate to and serve our audiences. We’re also going to be expanding on this theme of going to market with the service business, more than the product business.

On anything he’d like to add: I don’t think historically magazine media companies have been fixated on their “text stack.” But with all the emerging automated marketing and CRM, and different kinds of platforms that you need, we’re trying to figure out where to place our bets, both in time and financially, around what is the optimal text stack to accomplish all the things that we want to do. Because we now have a business that used to have… if you look at it as a product business, if we used to have 10 skus, we now have hundreds of skus.

On what keeps him up at night: I remain concerned about the brain drain, or prospective brain drain, in our industry in keeping the best and brightest motivated and excited about the work we’re all doing. And that people are coming to us and bringing their talents. And where they see this as something that’s not just gratifying and where they can live out part of their passion, but something that allows them to build a career here and really commit themselves. In Boulder, we have an abundance of things to gratify people from a lifestyle standpoint, as we do in other parts of the country, but we’re really looking for people who are both passionate and committed to the business as well.

And now the lightly edited transcript of the Mr. Magazine™ interview with Andy Clurman, president & CEO, Active Interest Media (AIM).

Samir Husni: As we approach 2020 what is your assessment of the future of magazines and magazine media?

Andy Clurman: I think we’ve officially answered the post-magazine era as a one-dimensional business. And anybody who hasn’t moved to really diversify and not just expand their audience to multiplatform, but figured out how to build other revenue streams off those multiplatform extensions… I mean, I’m sure there are some things on a regional or local level that are probably vibrant and healthy as standalone magazines. There are some niche categories, special interest categories that are still viable and sustainable as a single magazine, but for the most part anything that is competing in the broader universe for audience and ad dollars really should be well on their way to the strategy and reality of a diversified model or I think you’re going to see a continued attrition of brands and businesses that didn’t make that leap.

Samir Husni: What are three accomplishments or successes from 2019 at Active Interest Media (AIM)?

Andy Clurman: The three biggest were, and part of an overall mantra we’ve had, trying to convert our relationship with the audience, subscribers and marketers from one that’s more transactional to one that’s more of a membership model, which is not a radical idea, but we’ve actually had a lot of traction in building out membership programs. We’ve launched six of them and we have four more in the queue across different brand groups. And they have different combinations of benefits and services. And in these early days we’re seeing some good traction in turning a $15-$19 a year subscriber into a $50 to $200 a year member.

Then on the marketing front, in some groups we’ve changed how we go to market from selling media products, the impression-based products, to selling bundles of products and services. And having those be tiered programs that are structured as year-long, or in some cases, multi-year partnerships where we’re providing a whole package of strategic services and marketing services. And that might be anything from research to creative to custom content, to video, to having media packaged strategically around what they’re trying to accomplish month-by-month, quarter-by-quarter.

So, that was a concept we had with our marketing services group, and rather than going out and trying to sell those things à la carte, which we had done; after we had launched it, we regrouped and changed the way we were going to market with our core customers and that has had a really good effect in the group setter out there first doing it. Again, taking this one relationship with marketers and our audience from a transaction to one of an ongoing member.

Then the second thing is we have been studying how to get into the ecommerce business and we’ve had a couple of different permutations of that over the past few years, starting with the early days of building out a dropship business in yoga. And now we’ve gone to school on other companies that have successfully built out content-based affiliate models.

Then cutting various deals with the major ecommerce players. And we’re starting to see that revenue really scale up, which is gratifying, because it’s one of the most purist ways I’ve seen that you can monetize your good content. And the huge investment we make in product reviews and to be able to turn those into revenue from getting an affiliate piece of a transaction, without compromising your editorial integrity or putting an undue burden on people to create something that’s a totally new platform, it’s a natural extension.

In the new product development and new go-to-market strategy, those are things that we’re pretty happy about and all the progress we’ve seen there. We’ve also launched a new media brand and business model around CBD, which being in Boulder we couldn’t resist getting into the CBD business.  It’s our NatuRx brand, which is also in combination with the first CBD subscription box program that we just launched on Cyber Monday and we have high hopes for how that will work.

We also made a couple of meaningful acquisitions that were a huge undertaking. One was an asset that we bought from F+W out of the bankruptcy, which that consumed most of my spring and part of my summer. And we bought a small business, but it has been a strategic springboard for more stuff. We added the fly-fishing film tour to our Warren Miller ski film tour business. And we’re now in the process of launching a mountain bike film tour, so we have a lot a great new products and we’re bringing in more assets that are things that fit into the mix.

Samir Husni: What has been the biggest challenge in 2019 and how did you overcome it?

Andy Clurman: I think the biggest challenge continues to be the downward pressure on all things advertising revenue. And sometimes that’s in the form of print, sometimes that’s sponsorships, but that world continues to get on the margin, not universally, but on the margin, it continues to disappoint and get tougher. The antidote for that is what I was talking about first, we’ve really accelerated our new product/new service development and launch. If I’m frustrated or disappointed about anything, it’s just the time it takes to ideate, innovate and execute on new products/new services and get them to scale up in the marketplace.

You’d like to see all of your great ideas and all the great work that goes into those ideas have an outside effect on the business, but you’re still dealing with some declining revenue streams. Your two steps forward/one step back is kind of the monthly trend, so you just have to figure out how to keep the momentum, the pace and the commitment to building and transforming the business while you’re still subject to and aware of the negative trends that we all see in the market.

Samir Husni: It seems that everybody in the magazine media industry thinks change is in order, especially of the business model. And everyone has seen your success at AIM, why do you think more people aren’t racing to imitate you?

Andy Clurman: One reason is we have a physical plant and a production machine, a factory that produces. The principle set of products that this factory produced overtime was magazines that had a very specific set of deadlines, production cycles and supply chains and organizations that were built around them. And the concept of product development or acquisitions or things that would be the components to transforming and diversifying the business, except for maybe the largest companies that have strategic planning departments.

We have not been built and organized and there’s not a tradition of new products development as really at the forefront of our business. Where if you take tech businesses, whether it’s Apple or any other example, and they have built around the new product is going to surpass the old product and obsolesce the old product  and we need to obsolesce ourselves constantly before somebody else does. And they work at a pace and a level of urgency that I don’t think our industry has really ever embraced.

Where we could be Blackberry or Motorola when we have brands in some cases that have been around for 100 years. We feel, rightly or wrongly, and lately it might be wrongly, we feel a little more secure than people who are in businesses where they’re under a more imminent threat or they’re emerging categories with emerging technologies.

Samir Husni: Among the many hats that you wear, you’re also teaching a course on innovating media at the university there in Colorado. One of the categories that you’re helping students with is developing products in VRAR (Virtual and Augmented Reality), Voice, Events, Apps and Licensing. Have you given up on teaching them how to innovate in print?

Andy Clurman: No, in fact that is this semester’s assignment, because one of the reasons I agreed to do this is I thought I could learn from them, and while I have millennial children, I don’t have them captive in a classroom for a whole semester, so it’s a way for me to go to school on what these kids are thinking, where they’re heading; where they see media heading, and I think we can learn from them as much as they can learn from us.

Samir Husni: Do you think social media, in its many different platforms, is friend or foe to magazine media today?

Andy Clurman: I would say that unless you are really some kind of Luddite and you don’t see any virtue at all in the benefits of digital media, it has been a friend to magazine media. It’s allowed us to radically expand our audiences and our reach across all kinds of borders and generations. It’s given us sales and marketing channels that we didn’t have in an analog world. I think the greatest competition and challenge has been mostly limited to the advertising line.

You have digital natives who are running the ad business and who are, in some cases, turning into digital savages around how they view advertising and how they view performance marketing. And we’re held to the same standards, where they don’t have brand safety, brand-building, brand awareness; all the traditional advertising/marketing principles in mind. Then that’s where it becomes very difficult for us to compete on a scale where that kind of dollars moving into all things digital: performance, marketing, social media, just becomes a vacuum that is absorbing a lot of the available dollars, much less providing any kind of growth opportunity for traditional kinds of media.

Samir Husni: As we look toward 2020, a new decade, anything in store that you can talk about that AIM is planning to launch or do, in addition to the CBD box?

Andy Clurman: We’ve put a lot of time, energy and effort into these memberships, which, as I said, all have very different assets embedded in them, different marketing plans, different audiences. Now that we’ve spent the year designing them, testing them, researching them, 2020 is going to be the year to really launch and scale them. And we think that can be a game changer for us in terms of how we relate to and serve our audiences. We’re also going to be expanding on this theme of going to market with the service business, more than the product business.

One of the analogies that we talk about is IBM used to sell printers and mainframe computers, and now they’re a service company.  They’ve transformed their business. And it’s a lot more fun to be in partnership with a marketer than trying to badger them to buy something every month.

We may be reshaping, reconfiguring our portfolio in some ways. We’re looking at potentially changing up some of the mix of groups and assets we have and I’ll keep that vague for the moment, but I’ll let you know when we have a definitive plan around that. But we’ll pretty much continue to grow on the same strategy, which is to diversify around the audiences that we have with every way we can drive consumer revenue greater with services, memberships, events and ecommerce. And those are all growth opportunities in the platform.

In 2019 we, and again, it’s not radical based on other things that people are doing in the industry, but we went from the less-is-more approach to let’s-put-out-fewer, from a frequency standpoint, better magazines. So, in almost every case with our main brands, we reduced frequency and increased book size, production values, and maintained, in most cases, the subscription price, so people were paying more for less frequency, but better quality. We’ve gotten universally good feedback response from both the audience and marketers. And then taking some of that content capacity and investing it in building out more on the digital platforms, social, video, and mobile. So, we think we’re providing better content and making print more of a less frequent, but more meaningful event when someone gets their awesome magazine at their doorstep.

Samir Husni: Is there anything you’d like to add?

Andy Clurman: I don’t think historically magazine media companies have been fixated on their “text stack.” But with all the emerging automated marketing and CRM, and different kinds of platforms that you need, we’re trying to figure out where to place our bets, both in time and financially, around what is the optimal text stack to accomplish all the things that we want to do. Because we now have a business that used to have… if you look at it as a product business, if we used to have 10 skus, we now have hundreds of skus.

.Figuring how to deliver those and how to market those, particularly when you have things that are recurring revenue businesses like memberships, it gets very complicated. It’s a challenge and an opportunity, but it’s one that, and I know you’re going to ask this, it’s one that keeps me up at night. But we think we have the right technology, the right text stack, and the right people for what we are hoping to accomplish in the marketplace.

Samir Husni: I’ll ask you anyway (Laughs), what keeps you up at night?

Andy Clurman: I remain concerned about the brain drain, or prospective brain drain, in our industry in keeping the best and brightest motivated and excited about the work we’re all doing. And that people are coming to us and bringing their talents. And where they see this as something that’s not just gratifying and where they can live out part of their passion, but something that allows them to build a career here and really commit themselves. In Boulder, we have an abundance of things to gratify people from a lifestyle standpoint, as we do in other parts of the country, but we’re really looking for people who are both passionate and committed to the business as well.

Samir Husni: Thank you.

Next up, Doug Olson, president & general manager, Meredith Magazines.

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