Wetpaint CEO Ben Elowitz on the Future of Digital Media
Laura Lang has a proven and powerful track record as a media change agent.
As CEO of Digitas, she helped uber-marketers like Procter & Gamble and American Express move smartly into digital advertising. And she is conversant and fluid with new publishing platforms – and knows how to make them profitable.
Now, she’s been asked to lead Time Inc., and its 21 venerable titles, which include Time, People and Sports Illustrated.
Time Inc. has absolutely amazing brands with outstanding reputation, heritage, editorial staff, and customer bases; but, at the same time, the business model of magazines is structurally breaking.
What an interesting – and tantalizing – choice.
And you can’t be a media leader today, unless you’re willing to innovate on the business model itself.
Which is why Laura seems so promising.
I love the idea that at Time Inc. she’ll be able to innovate in core product, just like she did at Digitas. I also love the notion that she’ll aggressively develop new products for advertisers.
What will be new to her is the actual business of publishing – a business where Time Inc. stands stronger than almost any other player.
The central question for me is whether Time Inc. is ready for the change that a leader like Laura will want to (and need to) bring.
Indeed, Time Inc. has fundamental open questions to address when it comes to its own relevance in the digital world.
While the powerful brand of Time magazine has set the American agenda for decades, Time.com has wandered. In the past, Fortune magazine always spoke to the most important business issues and people; but today, its online brand is less clear, with basic confusion even in its home-page address (http://money.cnn.com/magazines/fortune/). This simply muddles Fortune, Money, and CNN.
To be as successful in the next century as it’s been in the past, Time Inc. will have to adapt more fully to the digital world. That means developing new business models, as well as new attitudes toward consumers, advertisers, and the product itself. It will also require a healthy reinvigoration of key brands, an area where I think Laura may especially shine.
All of this will take nuance, to bend things without breaking them.
I’ll end the year on an optimistic note, and say that I hope Laura can finesse major innovation for this major publisher. If she can, watch out world – because very interesting and far-reaching things will happen.
Despite the significant economic pressure they are under, it’s all too rare to see a print magazine let go of tradition and embrace a new model. So I was delighted to find that at least one Time Inc. magazine is doing just that.
Stephanie Clifford’s article about People StyleWatch in the New York Times last week shows what happens when offline executives adopt a digital mindset. Clifford points to a number of things that Susan Kaufman, People StyleWatch’s editor, is doing well, and notes the results: 8.6% circulation growth in the second half of 2009 and 130% growth in ad pages in the first quarter, easily besting a shrinking industry.
Although I wouldn’t call it top-tier journalism (does “Find Your Perfect T-Shirt Bra!” really merit an exclamation point?), People StyleWatch replaces an elitist, artistic view of its subject with a pragmatic appreciation of what their audience likes. It’s a habit learned online and applied offline.
Here are five lessons from online media that the publication is successfully bringing to print:
This is more than just flexing editorial styles to meet the expectations of web-addicted younger readers. The magazine is embracing a new business model with lower costs and more attractive content for advertisers that allows it to grow in an otherwise contracting space. They are hitting on one of the key success factors for Publishing 2.0, namely an adaptive business model. Time Inc. CEO Ann Moore, who has led the People brand for more than a decade in various roles, no doubt is taking notice.
Regardless of your personal opinions of the content, the results – in both readership and profitability – are hard to dispute.
I had dinner recently with a friend at a big traditional magazine publishing house. We talked about the predicament of the majors: circulations in decline; ad rates falling; a reduction in the number of pages per issue. The traditional publishing model is hanging by a thread. And as we’ve all seen, blue-chip magazines are closing their doors as they can’t make ends meet in the new world of media.
My friend works in the online division, and has lots of exposure to senior company executives. And one thing he told me surprised me: When he talks with his higher-ups, they just plain don’t acknowledge that online is the future of their business. They’re too preoccupied trying to figure out how to save their bread and butter versus figuring out how it will morph to completely different model – an online one.
Now don’t get me wrong. I’m not saying that online is going to save the traditional magazine. It’s not. The economics of online publishing are arguably even worse than traditional publishing. But that doesn’t change the fact that consumption of content is moving rapidly and unstoppably from offline to the web and mobile web; and that means that the offline publishing business is in inevitable decline.
The options for an old-school publisher are simple: they can harvest their declining businesses; or begin the hard journey of building a new business to replace them. But what is very clear is that the two cannot be done at the same time. Inevitably, the companies that will succeed in the new digital economy are the ones that are willing to make sacrifices to their existing businesses.
My favorite example of a company that is committed to this sacrifice comes from the world of semiconductors. For years, Intel demonstrated the philosophy of obsolescing their own products by creating new ones – before their competitors did. Each generation of microprocessor they produced put the prior one – just a year or two old – out of business. This is a survival skill in a fast-changing industry like semiconductors.
But decades-old publishers, steeped in their own business heritage, act as though they their world is not changing; when in fact it is changing as fast as microprocessors themselves. Is it that they don’t know, or that they don’t care?