Hearst Magazines saw ads drop 6.7 percent last year. Sound bad? Well, not when you consider that industry-wide ads declined nearly 12 percent. In today’s NYT, a brief analysis of how Hearst has succeeded relative to its market by not doing what they were supposed to do.
As the NYT writes, “Hearst Magazines … has repeatedly gone against the grain, from its traditional tight cost control in an often profligate business, to lagging years behind in building magazine Web sites, to recently raising prices and increasing the physical size of its pages. As part of a privately held company, Hearst does not report financial information, but indications are that its willingness to defy conventional wisdom has been working.”
Instead of following trends over a cliff, Hearst has done things like the following:
- They raised newsstand prices while everyone else was dropping theirs. In fact, Hearst raised some prices as much as 25% over the past two years. Impact on circulation? Nada. They just made more money.
- They didn’t launch standalone websites for most of their magazines until … wait for it …2007. (Before that they were walled off in iVillage.) Then they bucked the trend by NOT putting their content online. Instead, they use their websites to … wait for it … drive subscription revenue. Early adopters? No. More successful than the ones who’d been doing it since the early days and who had decided, for some bizarre reason, that “only free content works online” or “we’ll make it up by selling online advertising”? Definitely.
- Most magazines are roughly the same size. Hearst has been redesigning their magazines to make them about an inch longer and wider.
Now, associations aren’t magazines (even though some of us publish them), but there are decided parallels and interesting lessons for associations to glean here. What’s most interesting is that what Hearst has been doing is, as the company’s president says, “fairly obvious.” The only fact in this article that I found surprising was the fact that all these common-sense things make Hearst unusual among magazine publishers.
Of course, Hearst publishes magazines that have loyal readerships, and the readerships are loyal because the magazines are giving them something they value. So the parallel only works if your association is also providing something of value. If all you offer is a “community” that helps people “connect” — in short, if you don’t actually offer anything of value — then the lesson probably won’t help you. I’m not sure anything will, frankly.
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The key to your argument is, of course, ‘content’. Most business models will work if based on meaningful, salable content. My quarrel (well, that’s too strong a word, really) with your blog is that it would seem to encourage people NOT to be responsive to innovation. But I think the heart of your message is in the last paragraph–as you say, “the parallel only works if your association is providing something of value.” Thanks for that reminder.
Here’s my take (sounds a lot like yours): http://www.realtown.com/Judith2/blog/newpapers
Judith, thanks for the comment. I like your blog post, you raise some excellent points. (I’m not done talking about newspapers yet, either!)
I don’t think I’m encouraging “people not to be responsive to innovation.” Being innovative is not a blind process and while it’s important to try new things, it’s even more important to be very clear about WHY you are trying them, and what you want to accomplish.
For example, I find it very amusing that Hearst just got around to launching websites for many of its magazines (we’re talking major brands here). Yet there have been certain consultants running around telling associations for the last couple years “oh my god! you have to get involved in social media! if you don’t it’ll be TOO LATE and you’ll be dead!” Of course there were consultants running around in the mid-90s telling associations the exact same thing only replace “social media” with “website.”
Yet, as I pointed out in a post or comment somewhere a couple years ago, who remembers now which associations launched websites in 1995 and which launched them in 1998? Did the ones who waited go away? Of course not. It’s before my time, but I’m pretty sure that the association I work for didn’t have a website until ‘98 or ‘99 and then it was just a brochure. We’re actually doing fine, thanks — and we’re nothin’ but web.
Again, it all comes down to knowing what you want and why you want to do things — and knowing, fundamentally, that whatever you’re trying to do has to somehow MAKE MONEY. “Monetization” is a ridiculous concept because it makes it seem like some separate, distinct procedure that someone else can deal with down the road. This is how associations go bankrupt, believing revenue and profit margins are something for someone else to worry about.
Anyway, I’m rambling — thanks again for the discussion!
Good to hear a print media success story. Despite all the news we hear, I still think there is a good market for print media.
I disagree with Kevin’s point that “‘monetization’ is a ridiculous concept because it makes it seem like some separate, distinct procedure that someone else can deal with down the road.” At my association, monetization is a new way of thinking about everything that we do (the silver lining on the dark cloud of the recession). Examples are producing a digital version of our print magazine; not replacing the print but reaching a larger audience with a digital pub, increasing subscriptions, making advertisers happy, but also improving our member relations. Another example is moving our biweekly newspaper from print to the Web exclusively (www.communitycollegetimes.com) and selling advertising and job listings that were in the print version.
I would agree that monetization is a ridiculous concept WHEN it makes it seem like some separate, distinct procedure that someone else can deal with down the road. It takes a lot of planning, as Kevin explains, and not just jumping in because everybody else is doing it. Things are moving slowly here, but deliberately. We are covering all of our bases and bringing the slow-adopters on board which is so important.
Sarah, thanks for the comment! To use another terribly jargon-y word, what you describe is not monetization, it’s repurposing. Nothing wrong with that.
The “monetization” I’m talking about is the concept of, “This stuff is really cool — let’s do it, and later on down the road we’ll figure out how to make money from it!” Start-up companies with angel investors can afford to do this sort of thing (except, of course, almost all of them ultimately wind up failing). Associations, unfortunately, don’t have access to venture capital and a lot of leisure time at their disposal. Moving into “new areas” without already knowing how you intend to make money from them is almost always a waste of time and energy. Absolutely you should branch into new areas; but revenue generation should be baked into the concept (whatever it is) from the very beginning, not just something to deal with later on in the to-do list.
Of course, there has to be more to it than just THINKING you’re going to make revenue. A lot of association people (including staff at all levels, and volunteer leaders) instinctively know that they have to deal with that pesky money issue, so they hurriedly try to justify every idea they ever have by offering vague announcements like, “Why, if we do this, more members will join us!” (Really? Who? How? How many? How much? How, exactly?) Or, they’ll say, “We will get some sponsors!” (Really? Who? For how much? Based on your experience of what, your analysis of which? How, exactly?) Or, they’ll say, “We can sell advertising!” (Really? To who? What’s your traffic? What’s your audience? Where are they coming from? How will you connect them? How, exactly?)
This sort of wishful thinking is all too common, even among some very smart association professionals, leaders, and consultants, all of whom generally mean well but are ultimately hampered by the fact that they’re not actually being held accountable for any of their hopeful predictions.
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