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Steven Kotok To Samir “Mr. Magazine™” Husni: “I Think It’s A Fallacy For A Publisher To Think THEY Have The Power To Migrate Consumers From A Print Product To A Digital Product Of The Publisher’s Choosing.” The Mr. Magazine™ Exclusive Interview With The President & Managing Director of North America Of Keesing Media Group 

November 10, 2022

“We expect to be in digital, maybe through acquisitions, maybe through launches, but we certainly aren’t doing it because we need to make up for print losses. The print business is a very successful business with very loyal readers, but if there is more we can do with our expertise in another market, that’s great too.” 

“If people are missing out on print or digital because of some preconceived notion, I think they’re missing the plot anyhow. You have to follow your consumer. It doesn’t start with what you want to do or what you want to make or the format you want to make it in. It starts with consumer need and then grows out of that.”

Steven Kotok, president and managing director of North America of the Keesing Media Group with his 2.5 years son Theodore

Bringing more than 25 years of experience to his new position, Steven Kotok joined the Keesing Media Group on September 6, 2022 as president and Managing Director of North America, which includes their latest acquisition of Kappa Books and Publishing. He will be responsible for guiding the strategic direction for Keesing in the North American markets and focus on further expanding the company’s footprint since the acquisition of Kappa in March. As former president and CEO USA for the Bauer Media Group, Steven knows a thing or two about the ever-changing markets of the media world. 

Steven moved recently back to New York State and lives in Nyack with his wife Karina and their 2.5 years son Theodore. I spoke with Steven and we talked about this European company that he says is both humble and extremely efficient in the world of puzzle entertainment. And how excited they are to be expanding their growth to the United States. Steven said that with Kappa they were seeking to grow by reaching new readers. And as with everything in the business, it all starts with great product. 

“Our team is working hard to refresh and expand our product offerings, and take advantage of winning products from other Keesing territories, so that we can expand our footprint in current retailers and break into new retailers,” Steven said. 

And Mr. Magazine™ says excellent, and welcome to the United States, Keesing. 

And now the Mr. Magazine™ interview with Steven Kotok, President & Managing Director of North America For Keesing Media Group. 

But first the sound-bites:

On his career penchant for working at European companies: It’s funny, I used to joke that I was a European’s idea of an American guy. (Laughs) I started at Dennis in 1994, so other than my time at the Wirecutter, which the founder was actually in Hawaii, I’ve worked 26 of the last 28 years for European companies. And it’s super, super simple really; I’m a consumer guy. I’m a reader-focused, consumer-revenue guy. And that’s really the European magazine model.

On the Dutch company, Keesing and its plans for the future: Keesing has pretty rapidly made acquisition after acquisition in Europe, where they are by far the largest puzzle magazine publisher in Europe  with very significant market share in a lot of their territories. They really have excellent focus; they know what they’re good at and they have a really impressive, kind of backend CMS that drives it, so they’re technologically driven.

On the growth potential for Kappa Books & Publishing (a company Keesing acquired) for 2023: A few things. First of all, Kappa has significantly run pretty lean over the years. They’ve cut about half their editorial group in the last five years, so the initial plan is really investing. We just hired two new editors, one started last week and one starts tomorrow. We’re recruiting an editorial director; we’re going to be significantly expanding our marketing retail sales side, so we think we can invest more in the products and invest more in getting those products to market. And we expect to see year-on-year growth.

On who his major competitor is in the marketplace: It’s really a two-player market; Penny Press runs an excellent business. They are the dominant player. They have more market share than Kappa does. And I think over the years they’ve invested more into the market. And Kappa, in some ways, is playing catch-up there. So it’s a two-player market and we see our ability to grow by putting more into it.

On how he plans on facing some of the challenges that 2022 has seen: First of all, there’s always headwinds in this market, so I think your perpetual question of what keeps you awake at night; I think at this point if people in this market can’t sleep now, they’re never going to be able to sleep because we’ve had every single thing thrown at us. And yes, the latest one is paper prices.

On whether he feels print magazines have become more of an habitual buy than an impulse buy: I think you saw a lot of impulse buying in the peak of the pandemic, because people were looking for more activities. But yes, I do think that a lot of print has become more of an habitual buy. It’s no surprise that before the Internet print may have served a hundred percent of the population and now it may be serving a smaller portion or a smaller portion of the population in a regular way.

On where he sees the future heading, in terms of the relationship between ink on paper and pixels on a screen: But in terms of the future, I think one of the biggest kind of fallacies is the idea that people are migrating from print to digital; when a print publisher tries to migrate people to a digital product or something. I think people are kind of moved like they’re going through a maze. There are hundreds of millions of people making billions of choices of what they want and what they don’t want.

On why Keesing is interested in the United States market: Keesing has really become the dominant publisher in Europe and this is where the next stage of growth is for them. The scale of the U.S. is so vast, individual retailers here that we work with are larger… it’s like they say, if California was its own economy it would be the fourth largest in the world. If a Walmart or a Kroger were its own country for puzzles, it would be the fourth largest territory in the world for puzzles. It’s just a great opportunity.

On whether he thinks he is one of the last remaining presidents, CEO’s of a magazine media company who believes in the printed word: I hate to put myself there, because I’ve never thought of myself as printed word or not printed word. I think this category, the ability to scribble on a page your crossword or something, your Sudoku, is a unique experience. But I don’t want to say that I don’t care because I really love printed products, but for me, I don’t get excited making a printed product. I get excited making something a consumer loves.

On what keeps him up at night: I’d say the new, more interesting thing is really employee engagement. What keeps me up at night is am I giving my employees a path for growth, especially the people newer to the business. And that’s something that wasn’t as much of a concern 10 or 20 years ago, but when you’re competing with VC backed startups and what not, you’re ability to make this an exciting job for your employees and let them know when we’ve won and what winning is and orienting them toward being excited about winning is something I think people in media need to spend a lot more time on.

And now the lightly edited transcript of the Mr. Magazine™ interview with Steven Kotok, President & Managing Director of North America For Keesing Media Group. 

Samir Husni: This is your third overseas company; somehow you’re a magnet for those companies, whether it’s Dennis, Bauer, and now Keesing from the Netherlands. What’s the attraction; what’s the allure? 

Steven Kotok: It’s funny, I used to joke that I was a European’s idea of an American guy. (Laughs) I started at Dennis in 1994, so other than my time at the Wirecutter, which the founder was actually in Hawaii, I’ve worked 26 of the last 28 years for European companies. And it’s super, super simple really; I’m a consumer guy. I’m a reader-focused, consumer-revenue guy. And that’s really the European magazine model. 

The American magazine model is overwhelmingly less traditional now on the advertising side. And if it wasn’t for a Dennis or a Bauer or a Keesing, I probably would have ended up in the book business honestly. It only means something to me if the reader and the consumer are getting excited. Getting a million people to buy something and then buy it again because they liked it, really excites me. Getting one person to sign on the dotted line for an ad schedule just doesn’t excite me in the same way. I just think the European business model is just a fit for me; not just for my tastes, but probably also for my skills. 

Samir Husni: Tell me a little bit more about the Dutch company Keesing. I know they acquired Kappa Publishing & Books and that they are in the braintainment business. Tell me a little more about them and their plan for what’s ahead.

Steven Kotok: Keesing has pretty rapidly made acquisition after acquisition in Europe, where they are by far the largest puzzle magazine publisher in Europe  with very significant market share in a lot of their territories. They really have excellent focus; they know what they’re good at and they have a really impressive, kind of backend CMS that drives it, so they’re technologically driven. 

But everywhere they’ve acquired a puzzle business they’ve invested in new editorial product and in their retail relationships. So the track record was just too attractive to pass up; just their level of focus and their level of success in this market. 

The puzzle market in the U.S. is a very stable market with a high degree of consumer wanted-ness. You’re not trying to push something onto the consumer; you’re really trying to produce something that there is a really great consumer demand for, so it’s really rewarding in that way. So it really is a good fit of market and company. And Kappa just has a lot of growth potential. 

Samir Husni: As we approach 2023, what’s the growth potential for Kappa? 

Steven Kotok: A few things. First of all, Kappa has significantly run pretty lean over the years. They’ve cut about half their editorial group in the last five years, so the initial plan is really investing. We just hired two new editors, one started last week and one starts tomorrow. We’re recruiting an editorial director; we’re going to be significantly expanding our marketing retail sales side, so we think we can invest more in the products and invest more in getting those products to market. And we expect to see year-on-year growth. 

Samir Husni: So in a way you’re going to be competing with your former job, because when you were at Bauer you also introduced a lot of puzzle magazines.

Steven Kotok: They’ll be competing with us. 

Samir Husni: (Laughs) So who’s your major competitor now in the marketplace?

Steven Kotok: It’s really a two-player market; Penny Press runs an excellent business. They are the dominant player. They have more market share than Kappa does. And I think over the years they’ve invested more into the market. And Kappa, in some ways, is playing catch-up there. So it’s a two-player market and we see our ability to grow by putting more into it. 

We have a lot of new product introductions coming down the line in 2023, introducing new products into the market. And we’re going to make a lot of tweaks to our existing product. 

Samir Husni: I just recently read a report that paper prices have gone up 250 percent, postage is also soaring. Of course, Kappa’s product is more single-copy sales than subscription, but how are you going to face those headwinds that have been prevalent in 2022?

Steven Kotok: First of all, there’s always headwinds in this market, so I think your perpetual question of what keeps you awake at night; I think at this point if people in this market can’t sleep now, they’re never going to be able to sleep because we’ve had every single thing thrown at us. And yes, the latest one is paper prices. 

It certainly reduces margins and you’ve seen that inflation in everything. If you’ve eaten in a restaurant lately, or just about everywhere. In every consumer good, unfortunately, the input inflation results in kind of a price inflation for the end user. And you’ve certainly seen that in magazines, but as long as there is that want. You know, we’d love to have lower paper prices and we’d love to have lower cover prices, I think everyone would be happier. It’s way more fun to sell more stuff at a lower price. 

But as long as that consumer want exists; we have a very loyal group who have stuck with us through price increases and that allows us to continue doing what we’re doing  in a solvent, sustainable way. 

So, it certainly hurts, but it’s long past time for publishers to be complaining about their market. We’ve been living that, and it’s something unlike a lot of the other challenges this market has faced, this is one that every single market and every single category faces. We’re not alone. You just have to adjust, and you don’t want to price out your long-time, loyal customers. You just need to charge a price that enables you to be a sustainable business. 

Samir Husni: You mentioned that the puzzle business has been a stable business with the audience. I can understand it when the puzzle magazine used to be .99 cents or $1.99 or even $2.99; it could still be described as an impulse buy. But now you’re looking at $4.99 and $5.99 per copy. Is there a change in the single-copy sales from being that impulse buy to more of an habitual buy or a wanted-ness buy?

Steven Kotok: I think you saw a lot of impulse buying in the peak of the pandemic, because people were looking for more activities. But yes, I do think that a lot of print has become more of an habitual buy. It’s no surprise that before the Internet print may have served a hundred percent of the population and now it may be serving a smaller portion or a smaller portion of the population in a regular way. 

So yes, I think a lot of puzzle buyers are habituated, but on the same side that gives you a level of brand loyalty that a lot of other consumer products would really love to have. But even if we enter a recession, four or five bucks is an impulse buy. I think that’s something that people know that they’re going to get a lot of value from. 

We have 160-page products that we’re selling for $5. I don’t know about you, but 160 pages of crossword puzzles is going to last me quite a long time. It’s probably one of the best bangs for your bucks in publishing compared to a 100-page book of photos that, while maybe it’s a keepsake, you’re going to browse through it and then it has sort of served its purpose. I think that’s why some of the more timely types of products are challenged. 

The puzzle market has really evergreen products and people really engage with them. It’s back mail restaurant days, there’s nothing you want to see more than an empty plate come back from the dining room. And there’s nothing you want to see more that one of your magazines scribbled

up every page with the crosswords, or the Word Search, or the Sudoku’s. So yes, I think we provide a ton of value because this is something that’s really used. It’s an interactive product. 

Samir Husni: You mentioned the word interactive, which digital stole from print. (Laughs) If you could put your futuristic hat on for a moment; we’ve seen some companies swear they’re going to be online because everyone is online, yet you mention that the puzzle market is stable. Where do you see the future heading, in terms of the relationship between ink on paper and pixels on a screen? 

Steven Kotok: My first job in magazines was digital, so I probably don’t think in terms of the print/digital divide as much as other people because I’ve always gone back and forth; my job before Bauer was digital. From a user perspective, there’s all different business models, but you’re producing a product you want to engage a user with. Whether it’s print or digital, I  don’t think is really the biggest factor in thinking about that business versus say the business model, is it consumer or advertising? 

But in terms of the future, I think one of the biggest kind of fallacies is the idea that people are migrating from print to digital; when a print publisher tries to migrate people to a digital product or something. I think people are kind of moved like they’re going through a maze. There are hundreds of millions of people making billions of choices of what they want and what they don’t want. 

And if you launch a digital product, you should be planning on winning wholly new consumers. If your brand recognition or the free advertising that you can provide, if that gives you a leg up with some people who are reading a print product, that’s great, but you really have to be competing out there just like launching a new magazine. Sure, there are brand extensions, People en Español probably had a better shot than some other celebrity title in español, but really there are no side projects in this business. You have to be competing just as hard as anyone. 

I think these print products have a very loyal audience. Kappa can definitely grow its market share. And as we saw during the pandemic, total puzzle purchases went up and the market share of the puzzle category has been growing within the print magazine category. 

But yes, you see something like Wordle; Wordle is a genius digital puzzle. And it really uses the digital medium. The fact that it’s a feedback of what you did in the first turn and the second turn and the third turn, so I expect there will be more innovation in digital and more great digital puzzle products. I don’t think it takes anything away from the print puzzle business any more than dessert takes away from dinner. They are just different categories with different purposes and whether you’re making the best dessert you can make or the best hamburger you can make, you really better be able to compete, not just because of your brand name or some free advertising. 

So, we expect to be in digital, maybe through acquisitions, maybe through launches, but we certainly aren’t doing it because we need to make up for print losses. The print business is a very successful business with very loyal readers, but if there is more we can do with our expertise in another market, that’s great too. But the idea of making up something that’s lost; no one ever really wins that way. You have to create something awesome, whether you’re building on success or building on decline. The consumer doesn’t care. The consumer just wants value for their money. 

Samir Husni: I know Keesing Media Group is acquiring companies, but why the United States market?

Steven Kotok: Keesing has really become the dominant publisher in Europe and this is where the next stage of growth is for them. The scale of the U.S. is so vast, individual retailers here that we work with are larger… it’s like they say, if California was its own economy it would be the fourth largest in the world. If a Walmart or a Kroger were its own country for puzzles, it would be the fourth largest territory in the world for puzzles. It’s just a great opportunity. 

And when you’re as good at something as Keesing is at the puzzle business, both on the production backend and on their ability to connect with consumers and understand them, you’d be crazy to not go for it. And that’s for any publisher; my old friend, Felix Dennis. The U.S. market is the big time. You really want to make it here both for pride and for the scale of opportunity. Keesing was humble and they really owned what they did in Europe and had enough for repeated success that they really made sure they can come into this market as the best in the world at what they do. 

Samir Husni: Are you one of the few remaining presidents, CEO’s of magazine media companies that believe in a future for the printed word? 

Steven Kotok: I hate to put myself there, because I’ve never thought of myself as printed word or not printed word. I think this category, the ability to scribble on a page your crossword or something, your Sudoku, is a unique experience. But I don’t want to say that I don’t care because I really love printed products, but for me, I don’t get excited making a printed product. I get excited making something a consumer loves. 

At Wirecutter, we really provided a great service that people got a lot out of and I’m just as happy to do that in digital as in print. Maybe I’m just agnostic about it; it’s where I see opportunity. And I think business model-wise, when you’re selling a physical product it facilitates the consumer revenue stream which is my affinity, expertise and interest. 

But you look at The Athletic, fabulous idea. I saw those guys and I thought wow, how bold. Subscription, my own little passion. They’re really providing something that, as a fan of Buffalo and Minnesota sports teams, my ability to get news and information was declining and they provide a great service. 

So if people are missing out on print or digital because of some preconceived notion, I think they’re missing the plot anyhow. You have to follow your consumer. It doesn’t start with what you want to do or what you want to make or the format you want to make it in. It starts with consumer need and then grows out of that. 

If there is a huge consumer demand for printed puzzle products, I want to be the best at it. But the day people want it in a different format or something, I’m very happy. I’m not going to be the last guy on the island defending it. It’s only fun for me to make stuff people like. I don’t need to make museum pieces just because I’m a loyalist to one way or another. 

Samir Husni: My typical last question; what keeps you up at night these days?

Steven Kotok: What has always kept me up at night has been can we create something that a consumer wants and can we get in front of that consumer? In previous interviews I’ve always said that anyone who gets between you and your consumer, whether it’s Google or a wholesaler, should keep you up at night because just give me a fair shot with the consumer, but that’s kind of perpetual. 

I’d say the new, more interesting thing is really employee engagement. What keeps me up at night is am I giving my employees a path for growth, especially the people newer to the business. And that’s something that wasn’t as much of a concern 10 or 20 years ago, but when you’re competing with VC backed startups and what not, you’re ability to make this an exciting job for your employees and let them know when we’ve won and what winning is and orienting them toward being excited about winning is something I think people in media need to spend a lot more time on. 

And it’s not just print; in digital it’s just as hard. You talk to people, maybe some of your former students, where they’re kind of on the hamster wheel, churning out content, it’s hard to ever feel that kind of victory dance the way you could once upon a time. I really think helping your teams understand why you’re doing what you’re doing and what success looks like is more important than it has ever been in this business. 

Samir Husni: Thank you.

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