Christie Hefner thinks 10-year plans, business and personal, are “bullshit”. She told me so herself. “I’d never, ever construct a 10 year business plan for a business, and you shouldn’t set a 10-year plan because you won’t end up where think you will, I promise you that.” To Christie, goals are good, but she says with her experience as CEO of Playboy Enterprises, she’s learned that the media market develops too fast to even guess where it’ll be in 10 years.
“The main challenge for all professionals now is to think in a different way than we did even just 5 years ago,” she says in reference to how the world has developed digitally. The US is way behind the rest of the world when it comes to spreading content across digital platforms (blogs, texting, mobile devices, internet, email–everything counts) . Thats basically a fancy way of saying that even though it feels like the US has branched out in the last three years with technology (like iPhone apps, smart phones etc) European and Asian consumers are ahead with how they can use technology to access information–its so much easier to buy stuff online, make reservations for restaurants or get magazine content on your mobile device in Europe and Asia. Even though getting content on a mobile device isn’t the same as a bigger computer, laptops are becoming a thing of the past. The US is working on it, but magazines have a huge potential for growth in this area, and a lot of digital ground to catch up on. Spin, the indie/alternative music pub, has an iPhone/iTouch app you can download to get different content, but it’s one of the few magazines that does.
There are Companies and Then There are BRANDS
There are really good magazines that are a brand, Christie says, and there are really good magazines that are just magazines. For example, ESPN is a brand, Sports Illustrated is a magazine. Nike is a brand, Reebok is a shoe company. The main thing that differs from these companies and publications is ESPN and Nike’s ability to transform its identity and apply it in several different ways to cater to several different sections of their audience/consumer base. Buying a women’s sports bra from Nike is a very different consumer experience than buying men’s compression shorts. Reading ESPN and ESPN.com is much more interactive than reading Sports Illustrated.
Challenges to the Magazine Business Model
As media consumers (which we all are) we’ve operated under a silo model (like the tall steel cylinders that farmer’s put hay in) for decades. Radio was always radio. TV was always just TV. Print was always just print. Content was shaped for each media outlet, but now with internet and more than ever with mobile devices, content is integrating. Christie recognized this as an opportunity to advance Playboy, so she integrated her Playboy.com team with her print editorial team. Most magazines still have separate web and print teams and consider content separate. But as a journalist, I’m getting trained to think cross-platform. With every story, I have to ask myself ok, how could this story be angled for the web, how about print. Christie thinks the answer to solving some of the print industry’s financial and reader base struggles is to integrate the editorial teams. I would have to agree. “Magazines have to be fluid and allow for change in the organizational structure or they’re screwed. Print will never fully go away, but premium content, advertising and commerce are changing everything, fast.”
Newspapers, Magazines and Free Online Content
Magazines count on investment spending every year to built their rate base (the amount of people they target) which then leads to an increase in ad revenues because more advertisers want to put themselves in the pages. The magazine jumps in circulation and everyone is happy. Till it all comes crashing down like it has been lately.
This all sounds great, but magazines are not, I repeat, not making a sustainable profit, if at all. The main weakness in this model lies in the lack of magazines to make consumers pay their fair share for content. Think about your magazine subscriptions: you pay, on average, between $0.50 and $2.00 per issue. If you buy one on the newsstand, you’ll pay between $5 and $7. Thats a huge price discrepancy.Throw in access to free content online –you can go to your magazine’s website and click on stories, read issues for free digitally, click into blogs, take quizzes, register for contests– so why the hell buy the magazine in the first place? That’s how more and more consumers are starting to think, and its resulting in a publishing mess. Magazines are folding left and right. “It goes back to the canary in the colemine– newspapers.” says Christie. “Magazines don’t have the same magnitude of challenges that newspapers do, but putting up content online for free, plus the loss of classified ads, have sent newspapers down the drain. Now magazines are feeling the effects of free content online.”
Solutions and The Future
Christie says consumers need to start valuing magazine content more, and predicts they will if magazines prod them in the right direction. Most big magazines have loyal readerships (your grandma has probably subscribed to Readers Digest for 50+ years, your mom to Redbook, and your brothers to ESPN) and if you think about the amount of content in an issue that you get for $2, its ridiculous for magazines not to charge more. Christie says if we lower the rate base to readers who are willing to invest in the magazine by $0.50 or $1 more, we spend less money on direct mailings to attract readers that wont pay for content. Sure magazines will have a lower rate base, but they’ll have a consumer base that is paying a “reasonable price” for the magazine.
When I asked Christie what she thought a reasonable price for a magazine was (obviously we’re biased since we put so much effort into them) she laughed and said, “You know, thats a good question because I don’t really have an answer. I think what a good magazine and a good brand can bring to someone is invaluable, but I’d venture to guess that consumers would be willing to pay a price somewhere in between the $6 newsstand price and the $.50 subscription price. Charge $2 to $3 an issue, readers who don’t love the mag will leave but you aren’t losing money and newsstant prices go down so there’s an opportunity to attract new readers.”
Now I realize thats a lot of numbers to throw at you readers, but you can actually see what Playboy has done by dropping their rate base 38% this year here.
Stay tuned for more on The Playboy Series and Christie’s leadership and her view on Gormet Magazine’s folding and what actually makes a good magazine good.