The Mr. Magazine™ Reports from the IMAG conference.
“And these tributaries (collector’s editions) are how I think print will stay around because it’s specialized. I can go to any dot com or any digital platform and get all of my news for every facet of my life right then on the spot. But we don’t want to do that. We just want to do one very specific brand of news, for one very specific customer and that’s it.” Tony Romando
Collectability is a word that has become synonymous with print in the 21st century. It’s a fait accompli. Without that collectability factor, print today is what digital content would be tomorrow; a day late and a dollar short.
Tony Romando, CEO and co-founder of Topix Media Lab, probably understands the viability of collectable print better than anyone in the industry today, because that’s the name of his game: collectability. Publishing anywhere from 90 to 110 specialized topical bookazines per year; he is a man who knows his business and knows it well. From his triumphs to his defeats; Tony remains true to the Topix mission: providing quality products for one specialized consumer at a time, with no advertising, no subscriptions and no digital.
During the IMAG Annual Conference, which took place May 18th to 20th in Boulder, Colorado; I was able to sit down with Tony and discuss where his career had been, where it was now and where he saw it heading in the future with Topix. The man is as down-to-earth and open as the conference was enlightening. From convicts and cops, which according to him was sprinkled throughout his family tree, to the recently degreed CEO of one of the most prolific bookazine publishing companies in the world today; Tony is a force to be reckoned with and a man who was a true pleasure to interview.
So, I hope you enjoy the Mr. Magazine™ reports from the IMAG conference with Tony Romando, CEO & Co-Founder of Topix Media Lab. It will inspire you to believe that with the right dream and focus, you can do whatever your heart desires by staying true to your vision.
But first, the sound-bites:
On the genesis of Topix Media Lab: The genesis started with, I was at WWE (World Wrestling Entertainment) working for Vince McMahon and like any good, smart business guy, he wanted to figure out new revenue streams that basically weren’t totally wrestling-based. We had an infrastructure of publishing; we had everything already set up and it seemed to make sense that we could do publishing for other businesses. When he didn’t really love the idea of stepping that far outside of his comfort zone, it seemed like the right time and opportunity to start the company on my own. I and another guy founded the company three years ago and it started off horribly; catastrophic.
On why it started out horribly: I think the general plan was we would do generic collector’s edition magazines. My incorrect opinion was that we would have readers who really loved the subject matter, but didn’t care about the brand. Brands are not important. They care about One Direction or The Hobbitt or 50 Shades of Grey; they don’t care who is the one doing the magazine or who the authority is, they just care about the subject matter. And it turned out that was completely incorrect.
On how he turned it around and became one of the most prolific bookazine publishers out there: We’re doing, to be honest with you, two per week. Some weeks we do three; some weeks one, but I think the real turning point was realizing that we couldn’t sustain a generic magazine business.
On what he was thinking when he decided to go single-copy sales only: No advertising; no subscriptions; no digital. It’s as though I’m trying to sell you a steam engine or a trolley car. I would say that even though it may be a slowly declining business, there will always be room for the biggest brands. There will always be Men’s Health because they’re the category leader; there will always be Scientific American, they’re the best at what they do, and the best of those magazines will always be there.
On whether he fears there may come a time when the newsstands are filled with only bookazines and a magazine only shows up every now and then: The flagship magazines don’t want to do collector’s editions, they look down on those; those are marketing tools, revenue streams, they’re not important enough. And because of that, there’s a real push/pull between the people who do the bookazines for the big companies and the people who do the flagship magazines. And because of that they’ll never have the best quality product they can put out at the same time.
On his major stumbling block: The major stumbling block was not on the publishing side, it was on the entrepreneurial side. You do six magazines a year; you can balance a checkbook easily, there are a few dollars coming in, a few dollars going out and very few people to concern you. But as you add clients and you get to a point where you’re probably doing 90 magazines or more per year; we’ll probably do between 90 and 110, you hit a point where it becomes very complex.
On his most pleasant moment: That’s a tough question. I almost want to say being my own boss, but as I said before, I have more people to answer to now than ever before. So, I think the most pleasant part of this journey is knowing that Topix Media Lab is on everyone’s radar.
On what keeps him up at night: What keeps me up is more research and more data and I’ll stumble onto one new piece of information that basically says instead of doing a cover with six images, I should do it with three images. And that’s the best part of it. I think too many people are on autopilot when it comes to what they should do; it’s the same stuff, year in and year out. And there is so much good stuff out there that hasn’t been tried yet. So, what keeps me up is doing more research.
And now the lightly edited transcription of the Mr. Magazine™ interview with Tony Romando, CEO, Co-Founder, Topix Media Lab.
Samir Husni: Tell me about the genesis of Topix Media Lab.
Tony Romando: The genesis started with, I was at WWE (World Wrestling Entertainment) working for Vince McMahon and like any good, smart business guy, he wanted to figure out new revenue streams that basically weren’t totally wrestling-based. We had an infrastructure of publishing; we had everything already set up and it seemed to make sense that we could do publishing for other businesses.
There were other harebrained ideas, like doing catering; you know they feed 100 of those crazy wrestlers every week, three or four days a week, so it seemed like they could be one of the largest catering businesses in the world. He said no to the catering. He also said no to doing any publishing outside of WWE.
I wanted to do Biggest Loser magazine in 2008 and I wanted to do it as a bookazine because the Brits have been doing it for a long time and they’re the best; they’ve been doing it even longer than Time Inc.
So, when he didn’t really love the idea of stepping that far outside of his comfort zone, it seemed like the right time and opportunity to start the company on my own. I and another guy founded the company three years ago and it started off horribly; catastrophic.
Samir Husni: What happened?
Tony Romando: You know, you put a little bit of money together and you acquire a very small team, four editors, not even, two editors and one designer with one photo person; five guys in a tiny room in a cramped New York office. I’ve made a million mistakes and I’m making fewer mistakes every week that goes by, but still, huge numbers of mistakes.
I think the general plan was we would do generic collector’s edition magazines. My incorrect opinion was that we would have readers who really loved the subject matter, but didn’t care about the brand. Brands are not important. They care about One Direction or The Hobbitt or 50 Shades of Grey; they don’t care who is the one doing the magazine or who the authority is, they just care about the subject matter. And it turned out that was completely incorrect.
Every now and then we would have a successful issue with one brand that was a stand-alone generic, but for the most part they were kind of failures. All of them, except for two were failures. And I didn’t think it was possible that I sold magazines that were 4% sellers, the kind of issues that just shut companies down. On my office wall I have framed the first of four of our lowest selling covers of all time: 4%, 6%, 7%; I think one was 11%. All four of them I have in my office now as reminders of what not to do.
Samir Husni: And yet in a short span of time, you’ve become one of the most prolific publishers of bookazines. You’re putting out almost a quarterly on a weekly basis.
Tony Romando: We’re doing, to be honest with you, two per week. Some weeks we do three; some weeks one, but I think the real turning point was realizing that we couldn’t sustain a generic magazine business. There are a lot of companies that are even getting into this space right now; I just saw four new generic bookazines on the newsstand two weeks ago on Marilyn Monroe, The Beatles, Jesus; people just flood the market with them.
And knowing that I had been in the generic space and that it didn’t work; I came in one day and said if I can’t land a good, proper brand to do special collector’s editions for within six months, then I’m done. And that’ll be it. It was my way of getting our team to focus on partnering with existing iconic brands. So, we were fortunate that Dave Fishman of TV Guide took a chance on us, because at that point we made a quality product, but we had no proof in the sales, because when you cut those licensing deals in the beginning, you give away a lot to try and get your footing and build a foundation.
But backing up; I think the thing about Topix that’s different from most bookazine companies is that we are strictly an analytically researched-based company. It’s all in the numbers; nothing matters on gut. I come up from the editorial side and coming from there; you know, editors think they know everything.
I think I spoke to a circulation conference 10 years ago in Atlantic City, massively hungover, standing in a room with a 1,000 people, and I think my speech to them was editorial people don’t know squat; they think they know everything and if they would follow the circulation people’s advice, the newsstand people would sell more copies.
But editorial people don’t care about copy sales really, as much as they should. So, having come up the editorial side, I realized that knowing that we are an editorial-based company and knowing that it’s all in the cover or the subject or the 100 pages that we do, it was crucial that we use analytics to base everything on.
We landed TV Guide and started doing research and I came across a mathematical equation that John Wayne was still one of the single-most popular adult celebrities. People think of him as a great American; he’s iconic; people live their lives by his code, and no one had put him on a cover; he was the only guy 20 years running to be on the Harris Poll for top actors; I think he was in the top 10 for 20 years. It was just the perfect storm.
So we did that for our first TV Guide and it sold 35 or 36%, which is a homerun these days. For us it was like the first time that we had seen any real money, real revenue; we were off and running at that point.
From there it was trying to figure out how we could leverage our one brand, TV Guide, to parlay it into more brands. I think now we’re up to 15, 16, around 17 brands.
Samir Husni: And I’m sure you’re no longer just five people in a small room?
Tony Romando: No, now we’re 16 people in a little bit bigger room. (Laughs) Our story is a good one because everything we’ve done has been haphazard; it’s calculated, but I’m still the IT guy; I’m still the mailroom guy; I’m the CEO, but I’m also one of the edit guys. We all have 15 different jobs.
I had found an office space in midtown through my wife’s friend, who had a private equity company in this office that was owned by Blackstone and I gave them a good deal. They gave us this little remnant piece of office space and the only reason we moved out of there was because we became a fire hazard; we had ten people in a room that was unsafe and illegal.
Then we wondered if we could get cheaper space and more of it if we moved down to the Wall Street area before Condè Nast, before Time Inc.; before everyone. I had lived down in that area for 20 years; I knew that everything was cheap, and I lived very close so it was helpful.
Samir Husni: We live in a digital age; no one can argue that no matter how much we love print. What were you thinking when you decided, not that you were only going print, but you were only going single-copy sales?
Tony Romando: (Laughs) No advertising; no subscriptions; no digital. It’s as though I’m trying to sell you a steam engine or a trolley car. I would say that even though it may be a slowly declining business, there will always be room for the biggest brands. There will always be Men’s Health because they’re the category leader; there will always be Scientific American, they’re the best at what they do, and the best of those magazines will always be there.
And because of that, there should always be collector’s editions that go along with the best. But the ones that are the second and third tier down from those best ones, if those get weeded out; we’re not selling monthly magazines, we’re selling one thing to one very specific customer. We’re not all things to all people, so if you buy GQ, you learn how to drink with style and dress with style; there’s something for every part of your life. These bookazines are only one topic, so for us it was easy to say this is where we want to be because people will always read about these iconic figures.
I think the difference really is saying that originally we targeted certain brands for the 50-plus market. They still want magazines. But people don’t want to spend $10 or $11 on a digital magazine. They just don’t. We’ve tried it, there’s just no money there. People want to collect something. So these are a poor man’s coffee table books. They stay on their coffee tables to be showcased forever. They don’t just read it and throw it away.
And I think that’s been the real tradeoff for us because once we think of these as magazines, we’ll be dead. They have to be considered as keepsakes forever. To my point on John Wayne, we did John Wayne on TV Guide and it did so well that I went back to John Wayne’s son, Ethan Wayne, who runs John Wayne Enterprises, and said why don’t we do a stand-alone John Wayne collectable every other month. And he said let’s try it. And it was our bestseller. And we went ahead and put Elvis on Newsweek and it was also one of our bestsellers. So we went to the people who own Elvis, Authentic Brands Group, and told them the same thing, let’s do Elvis every other month.
And these tributaries are how I think print will stay around because it’s specialized. I can go to any dot com or any digital platform and get all of my news for every facet of my life right then on the spot. But we don’t want to do that. We just want to do one very specific brand of news, for one very specific customer and that’s it.
The final thing I’ll say though is our business is a lot less complicated because we don’t have advertising and we don’t have subscriptions, so there’s no subscription debt liability hanging over our heads. We don’t have a fleet of people selling ads; we have a rep firm and sometimes we sell a sponsorship for a couple of bucks. People have tried it and been semi-successful; we’ve had a little bit of success, but that’s just gravy for us. And I think because we don’t have those complications, we’re not beholden to a member.
We put out a really great product; if we don’t put out a piece of crap, people buy it. And if they buy it, the proof is in the numbers. And if it’s in the numbers and we sell those copies that means we did our job right. And so companies will now come to us and say we do bookazines and we’re breaking even; we do six of them per year and we’re selling 60,000 units and we still can’t make any money. Why is that? And my answer to them is I don’t know what you have built into your infrastructure, but I have 16 people; we create everything; we generate everything; we do everything from front to back, and we can turn a big profit on 60,000 units, so let us do it for you. And we’ll champion your brand and at the same time, we’re ambassadors of their brand and we want to make a few dollars in the process, but our goal is to make sure that their brand has the extension that we are in control of.
Samir Husni: I’m sure that you’ve noticed lately, keeping up with all of these launches and all of the different brands, it’s almost a ratio of 2 to 1, in terms of the number of bookazines arriving on the marketplace. Are you afraid that we’ll reach a situation point where the entire newsstands will become bookazines and every now and then there’s a magazine?
Tony Romando: You know I think it should keep me up at night, but it doesn’t because I didn’t invent it; I saw a good opportunity and I think I was ahead of the curve, but there were other companies in front of us. We got in the market and they all said, they’re going to take away all of our sales and we see that their sales still work and our sales work.
Just last week, as I mentioned, someone else brought their bookazines to market as well. In the entrepreneurial spirit, I want everyone to do well. But I think what it comes down to is the quality of the product and the brand of the product. And I think that I have the best brands and I believe as long as I continue to bring in really great brands, such as a Reader’s Digest or Discovery Channel, Disney; to be able to do all of the Star Wars magazines for the next couple of years is a big deal. And I think no matter who puts a generic Star Wars magazine on the newsstand at the same time, if mine is the official LucasArts collector’s edition or Disney collector’s edition, that’s what matters.
I think the tradeoff between us and other companies is we are an editorial-based company; the integrity of the product comes first. And I believe any of our partners would say that our product is superior to most because unfortunately, the bigger companies say, how can we make a few more bucks and they put a team on making special issues. The flagship magazines don’t want to do collector’s editions, they look down on those; those are marketing tools, revenue streams, they’re not important enough. And because of that, there’s a real push/pull between the people who do the bookazines for the big companies and the people who do the flagship magazines. And because of that they’ll never have the best quality product they can put out at the same time.
Now, we don’t own any products and we don’t want to own any products. We cut licensing deals for a few years, but we want to be able to say this is your product; we work for you.
I was an intern at Rolling Stone 20 years ago. I have more bosses today as CEO than I had 20 years ago. I answer to probably 42 people on a daily basis. And some of those people that I answer to don’t know the magazine business well and some do know it well. And I don’t know which one is worse, but there are a lot of people to answer to. I think as long as we make the quality of the product better than the next guy, we should be good.
Samir Husni: You were at Rolling Stone?
Tony Romando: When I was in college many years ago, I went to Rolling Stone and they offered me an assistant’s job and I promised then I would go back and get my degree. So all of these years later, I did. I had four classes, which I finally just banged out over two semesters and I got my diploma in the mail two weeks ago. And to have it is really a big deal. I’m from a long line of convicts and cops. My family has worked as convicts and cops. All from Chicago and no one had ever been to college. Not one member, even in the extended families.
It’s been a good year. I just graduated and we’re in contract with Rodale to do 12 bookazines a year for them. And their bookazines are always very successful. But they can’t seem to figure out how to make any good money. Prevention is really small down here. No one even knows who Prevention is. It’s like 65,000 copies; that’s a lot of money. So, when they called me and said we can’t figure out how to make this work; I got my fork and knife out and told them I can make this work for you.
The funny thing; what we do, I think, is very simple. You analyze the space better than anyone and I spend a lot of time also analyzing the space out there.
Samir Husni: And you know it’s amazing. It started in the U.K. with the bookazines, but now it’s all over Europe and all over the world. I just gave an interview to a magazine in the Netherlands all about the bookazine trend. They wanted to know all about the bookazine phenomenon. So, I can guarantee you that your interview is going to be making the rounds.
Tony Romando: Good, because long-term plans are really short-term because two years ago I said I’m going to give it six months and if I don’t end up flying, I’m out. Then I started adding clients. And last year, around May, I said 2015 is my year. I’ve built up everything and if I can’t make it work in 2015, I’m leaving. I’m done. My wife has her own company and I’ll do something else.
And then we hit May and I knew that we really had something. Now I’m looking at it, still in short-term stages, but I’m starting to look at it more long-term; what can I do in 2016 and 2017? And one of the things that I want to do is look into the international market; what can we do in India, in Australia and in the U.K. to make them buy our magazines. International is a good step, because there’s only so much we can do here.
Samir Husni: What has been the major stumbling block that’s faced you through your journey with Topix Media Lab and how did you overcome it?
Tony Romando: The major stumbling block was not on the publishing side, it was on the entrepreneurial side. You do six magazines a year; you can balance a checkbook easily, there are a few dollars coming in, a few dollars going out and very few people to concern you. But as you add clients and you get to a point where you’re probably doing 90 magazines or more per year; we’ll probably do between 90 and 110, you hit a point where it becomes very complex.
And because it becomes complex, the fear was that we would outgrow our internal mechanism, so we’ve kind of pumped the brakes. We have so many brands now, that we’ve hit a point where we want to make sure our brands get the love they need. We don’t want to be greedy. I think we’re all chasing the same brands and sometimes I beat Time Inc. to the punch and sometimes I don’t beat them. We may be on their coattails, but we’re a long distant second place or third place or whatever it is.
I think the big stumbling block is making sure the internal side of it works and that we don’t outgrow what we have the capability of doing. The Source thing really threw us for a loop because it’s kind of skewed all of our numbers for an entire year and as a small company; I think we went from $3 million in revenue to $12 million in revenue to $18 million in revenue, with a forecast of maybe $40 million in revenue this year. That’s pretty heavy growth for an industry that claims to be dying, which is pretty shocking.
But the good news, and I mean this in the most sincere way; I don’t know what I don’t know. So, I’m sure that I’m making mistakes that I don’t even know about along the way and the ignorance of it has been slightly beneficial.
For me, it’s a different kind of story. When I was 17, I joined the Navy. I left home and joined the Navy, spent five years scrubbing bird crap off a runway; the second longest; largest runway in the world is in Guam. I was there for years and I was chipping bird crap off of the runway. So, 18 hours a day, 6 days a week; I know what real hard work is.
Doing this for 18 hours a day and crunching numbers and making magazines is a cakewalk. And it’s a treat. If you get the right people to do the right thing; it’s like I used to pick all the topics; I did all the analyses, the John Wayne stuff, and then at a certain point I realized I’m not good enough at it, so I hired someone who just comes in and crunches numbers all day. I think the stumbling block was how you actually put out quality topics that will sell and hit the certain sell-through range; now, they don’t all have to be winners, but we don’t want any that are 12% either. And if they can all stay somewhere here, with a couple of spikes on this end, then we’ll make a lot of money.
So, to answer your question; one of the biggest mistakes I’ve made is not realizing fast enough that I’m not great at something. And if I’m not great at this thing, then I need to hire someone who is amazing. And now that I have these people in place, it’s become a lot easier to sit back. Now I can just criticize their work all day as opposed to my own. (Laughs)
Samir Husni: (Laughs too) And what has been the most pleasant moment throughout this journey?
Tony Romando: That’s a tough question. I almost want to say being my own boss, but as I said before, I have more people to answer to now than ever before. So, I think the most pleasant part of this journey is knowing that Topix Media Lab is on everyone’s radar. We tried to fly under the radar for three years; I was hoping to go six years without anyone noticing that we existed. Being on your radar, knowing that we come up in board meetings or meetings at big publishing companies; it’s a very flattering thing. To know that we’re in the mix with those guys is great, but it’s also daunting because that means we have the bull’s-eye on our back.
The long-term goal or the short-term goal really, is to partner with one of these bigger guys and knowing that we have the ability to bring in bigger brands than most people, whether that’s because we identify them sooner, there are a couple of really big untapped brands that people don’t even think about that I have on my list of ideas on my wall that I think would make really great bookazines.
And because we haven’t gone to those yet; we don’t want to get too big too quick. What we really want to do, what I really want to do, is partner with someone big who wants to be part of something smaller that they can share in the revenue stream of it and would help us get to certain pockets because, and you know this as well as anyone, you want to be at the main line; well, you’re at the main line, but you want to be at the checkout.
But a lot of those guys want to be at the checkout because of their advertising rate base and I don’t need that, so I want to systematically pick checkouts. If I can get 30,000 copies in Wal-Mart, instead of 10,000 copies, and sell 40%, I’m going to do a lot better.
But the downside to that is no matter how much money that you have, you can’t just drop a bag of money down and say I want in; you have to wait your turn, start at the bottom, work your way up; you’re in the bad aisle that’s never opened, then you slowly move over.
And I think a lot of these big guys have the millions of dollars invested in those pockets and because we know that you can take a magazine and go from 25% sell-through to 35 or 40% sell-through just by going to the checkout, I’m now trying to figure out how to jockey ourselves into a position where we can partner with someone we might be competing with right now and pool our resources together, because I think we can show them how to do the bookazine business for one-tenth of what they’re doing it and they can kind of carry us across the finish line to some of those checkout pockets. That would be a really great synergy and that’s where we’re headed next.
Samir Husni: And before I ask you my typical last question: who was your favorite wrestling figure, since you’re no longer with WWE? (Laughs)
Tony Romando: (Laughs too) Strangely, it would have to be Shane McMahon. Vince McMahon, who’s the CEO and Chairman of the Board, his son Shane, who I worked for, was a business guy. But he also grew up in the business.
And he used to jump off of the Jumbotron, which is this huge screen, and he would jump 50 or 60 feet onto a table with other people. I mean, he owned the company and he did not have to do that kind of stuff or put himself in harm’s way. He was amazing in the sense that he would jump from the highest point and put himself at the biggest risk. He’d put himself in the most dangerous positions.
But on Monday, when wrestling was over, on Tuesday, he was back at the office and wearing a suit, looking at the consumer product group, the China expansion. The rest of these guys were wrestling again. He was able to do both and no matter what you think about wrestling, they are a pretty amazing group of guys because you’re afraid of them because they’re massive and they’re also just a little bit crazy, but they’re really impressive athletes too.
So, with all of these guys, it’s like they’re the most amazing guys to see in person because they’re just huge. And they have great character and they’re all banged up. Whether you call it real or not, it’s scripted, but the action is really real. Everyone should go to a wrestling show.
Samir Husni: We have followed it some; in fact, I was the crazy person who took his entire family to the Valentine’s Night Massacre. (Laughs)
Tony Romando: (Laughs too) It’s really amazing, isn’t it?
Samir Husni: It really is.
Tony Romando: Yes.
Samir Husni: My typical last question; what keeps you up at night?
Tony Romando: Single-copy sales would be the answer that I give you. But to be honest, what keeps me up at night is doing more research on the next big project. I don’t lose any sleep and I don’t stress over this business at all. I have a two-year-old son; my wife is pregnant with twins; I’m up all night anyway. I’m up day and night from the family side, but it’s not because I’m worried about the business.
What keeps me up is more research and more data and I’ll stumble onto one new piece of information that basically says instead of doing a cover with six images, I should do it with three images. And that’s the best part of it. I think too many people are on autopilot when it comes to what they should do; it’s the same stuff, year in and year out. And there is so much good stuff out there that hasn’t been tried yet. So, what keeps me up is doing more research. The more information I have, the less dumb I feel when things go bad. At least, I did my homework. (Laughs)
Samir Husni: Thank you.