As Apple's iPad joins the Amazon Kindle and an expanding universe of electronic reading devices, media companies continue to struggle with evolving models to maintain their relationship with readers across the rapidly changing digital landscape.
For Cathie Black, president of Hearst Magazines, new approaches to delivering content strike at the core of her business, which for generations has been built around text, graphics and full-color photography on thick, glossy paper. The media business is in an unbelievable swirl right now. It's very exciting, said Black in a keynote address at the recent Wharton Women Business Conference.
Hearst's stable of 15 magazines includes some of the best-known titles in the business, including Cosmopolitan, Esquire, Good Housekeeping, Harper's Bazaar, O: The Oprah Magazine, Popular Mechanics, Redbook and Town & Country. Black also oversees nearly 200 international editions in more than 100 countries. At the same time, however, hundreds of magazines have closed in the past few years, including well-known names such as Gourmet and Modern Bride. Hearst itself folded CosmoGirl and O at Home in 2008.
Black, 65, predicts that the industry will survive. I do believe magazines will exist. They offer ... aspiration and inspiration, she said. In addition to its magazine empire, the group's parent, The Hearst Corp., has a major stake in the future of publishing and content delivery. The company owns 90 newspapers, 29 television stations, cable networks including Lifetime, A&E, History and ESPN, and business-to-business publications.
The Digital Future
The current attention being paid to electronic readers only hints at what may eventually evolve, Black noted, adding that for now, the Kindle and other devices present a viable alternative to plain black and white text, but do not capture the full experience of a glossy magazine.
Hearst recently unveiled its own device and content delivery service targeted to e-readers, smartphones and other digital devices, known as Skiff. Developed in partnership with the Massachusetts Institute of Technology, Skiff will provide advertising services and a companion digital store with selections from newspapers, magazines, books and other content from multiple publishers. Formerly known as FirstPaper, the venture has an agreement with Sprint to provide 3G connectivity for Skiff's dedicated e-reading devices in the United States and to sell it in Sprint's retail stores.
Skiff, said Black, will provide capabilities beyond what has already generated interest in electronic readers. Most of what you are hearing now is a little bit of hype. In the next year, she predicted, electronic readers will provide better color and graphic representation of photography and illustrations that make magazines so much more than just lines of text. The Kindle is a serviceable, practical device, but we will take that so much further; so much more will develop in the next year.
The Skiff device may be of less interest to Hearst than its ability to target and evaluate advertising. Skiff is partnering with Nielsen and comScore to help drive media planning and buying through the Skiff platform. Skiff will also provide publishers and marketers with the analytics to measure the effectiveness of their advertising on e-readers. Hearst was an early-stage investor in other technology firms including Netscape, XM Satellite Radio and Sling Media. We don't want to be in the device business; we want to be in the content business, Black said, adding that the Kindle is not a good outlet for her magazines, because Amazon not only controls the revenue stream, but also the names of the customers using the readers. We're all about the database, so that's a bad business model for us.
She used the example of Cosmopolitan to describe the current model of a successful magazine. The magazine is sold in 60 countries -- including Russia, where it sells one million copies a month -- making it the largest women's magazine in Europe. Inside the magazine there are 150 pages of advertising that sell, on average, for $80,000 a page. The magazine makes circulation revenue from two million newsstand sales a month and subscriptions of 1.1 million.
That is a beautiful thing, said Black. There is a lot of advertising revenue there and a lot of circulation revenue. A magazine needs both revenue streams to work because advertising revenue is tied to circulation and circulation is tied to advertising support for development of content, she noted. Advertisers are also keen on knowing as much as possible about a specific magazine's readers.
The Hearst magazine group already has some digital components, such as Internet subscriptions, and Black said she spends about 30% of her time on these new initiatives. However, she said, they remain a small part of the overall picture. It is hard for me to see that half our revenue will ever come from all these digital initiatives, but I could be wrong.
Beyond the digital future, Black was asked about how her magazines maintain a balance between providing traditional content while remaining open to innovation. The best editors are very curious people. They know they have to give the readers 80% of what they anticipate and something that's fresh with the other 20%. You have to be really courageous to reinvent a [publication] because you don't want hundreds of thousands of people calling to say 'What have you done to my magazine?'
From time to time, Black noted, Hearst brings in a new editor for a magazine in order to initiate needed change. That person inevitably wants to hire a new design team. The design team, in turn, wants to revamp the entire magazine. When this happens, Black usually argues for moderation in order not to alienate long-time readers with too much change too fast. We tell the design team we want this to be gradual. If the magazine is really on its last legs, then it might be different. Hearst relies on market tests and focus groups to help guide change in its products but, she said, It's a careful game.
Words from Lady Gaga
Black grew up in Chicago and went to Trinity College, a women's college in Washington, D.C. She started out in advertising sales at the travel magazine Holiday. It was a different era, but I knew myself. I knew I wanted to work. In 1972, she went to feminist Gloria Steinem's Ms. magazine and stayed for five years. At the time, Black said, Ms. was controversial for encouraging women to pursue their own goals rather than living through the success of their husbands. That was toxic vocabulary back then.
In 1979, she became the first woman publisher of a weekly consumer Magazine, New York. In 1983, she joined the recently started national newspaper USA Today, where she became publisher of the newspaper and executive vice president/marketing of its parent, the Gannett Company. She left Gannett in 1991 to become president and CEO of the Newspaper Association of America, the industry's largest trade group, and worked there for five years before joining Hearst.
At Hearst, she presided over the successful launch of Oprah Winfrey's O magazine, but also the failure of Tina Brown's Talk. In 2007, her memoir and guide for women in the workplace, Basic Black: The Essential Guide for Getting Ahead at Work (and in Life)was published.
During her presentation at Wharton, Black said the book outlines the importance of maintaining a 360-degree life. Women's lives typically run in two parallel tracks -- who you are professionally and what you want to do with your life. I have a strong belief in finding success from an individual point of view. It has to be for the dreams you have independently. It is not just about a chink in the totem pole or getting a driver or a bigger title. It's about when you look in the mirror, what does it say about you? Are you feeling good inside?
She cautioned young women to think more than five years ahead as they make important career and personal decisions, even if they seem to be on track. She reminded the Wharton audience that one in two marriages ends in divorce. Think about when you are 45, if all those perfect things don't work out.
Black, who is married, said she never stopped working as she raised her two children, now 18 and 22. When her children were young, for example, and she was intensely involved in getting USA Today off the ground, she managed to piece together a support network of other people -- a village to help out when she had to work long hours and travel for business. I don't have the answer about people who step out for a while. Companies are more supportive of that than before, but stepping back in is also hard.
She urged women just starting out in their careers to do everything and more. Come early. Stay late. It's not only about the hours you put in; it's about the attitude you bring to work. Black also advised women to strive to make their bosses look good. Some bosses will want to be a mentor, while others will want as little contact as possible. It's not that you have to be in the boss's office all the time showing how gosh darn smart you are. Tell the good news and tell the bad news. If you can fix the bad news quickly, that's good because the boss doesn't like big bad things. So fess up. Take the aggravation. Don't blame it on anybody else. Just stand up and say, 'I made a mistake.'
She also noted that women too often nurse personal grudges in the workplace. Women are brilliant at taking everything personally. Black told the story of a colleague who was overwrought when she discovered she did not receive an e-mail invitation to a meeting. Black told her to show up anyway because it was possible the person who called the meeting simply made a mistake. I said, 'Don't just pout.' Men are much better about moving forward.
Women need to be more forceful with their ideas, Black added, noting that when women enter a meeting, they tend to sit near the corners of the conference table -- not the more visible positions in the middle or the end. Even if she presents a good idea, a woman seated in that part of the conference table might not be heard. Then three minutes later, Joe, who is sitting in the middle, rephrases her idea and everybody says, 'Joe, what a great idea.' The woman has just seen her idea rewrapped and she's sitting there steaming.... Assume you have been invited to the table, Black urged her audience. Don't hide out in the corner.
Black recounted how the night before her Wharton speech she saw the singer Lady Gaga perform in New York. She recounted what Lady Gaga told her audience: 'Nobody believed in me, but I believed in me.' That's the energy and the persona each of you must have. Trust me, you will have bosses you can't stand and bosses you admire, colleagues you can't tolerate and ones who you really respect and admire. But at the end of the day, it's what Lady Gaga says, 'Believe in yourself.' That's the energy. That's the vibe. That's the DNA you have to send out to everyone.