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Publihed: 3:3pm est 15 May 20095
Published3:34PM BST 15 May 2009
Cosmopolitan outlook: Cathie Black, president of Hearst Magazines
Cosmopolitan is printed on shiny paper, right?” says Cathie Black, president of Hearst Magazines, part of the $4.38bn (£2.87bn) US publishing empire that rivals Time Inc and Conde Nast.
The First Lady of glamorous glossies is explaining to me what she means by converting her titles – which includeHarper’s Bazaar, Esquire, Good Housekeeping and Marie Claire – from the page into “liquid” content.
“You haveCosmopolitan magazine with a cute picture on the front,” she ventures. “Then there’s the internet, the mobile site, the e-reader, the books, the television programme, the radio show. Only then do you have a 360 degree brand.”
Hearst, founded in 1887, by media proprietor William Randolph Hearst is one of the oldest family-owned media companies in the US, publishing dozens of newspapers such the San Francisco Chronicle and holding stakes in the sporting network ESPN and the Fitch Rating agency.
Despite its long association with print publishing, the owner of the UK’s National Magazine Company has ambitious plans to exploit big-name brands in a myriad of merchandising opportunities. It sounds remarkably like the Disneyfication of magazines.
“We re-purposing content,” she says. “The brand values of Cosmopolitan are there, but the product is jewellery or a line of furniture or cookware.”
This, in Hearst-speak, is called “reaching out to the consumer in multiple touch points” – a strategy that was successful for the Hefner family’s Playboymagazine brand.
Perched at a table in the Haymarket Hotel, Ms Black’s generous laugh gives a benign touch to her Devil Wears Prada elegance. She is gingerly picking at an small, exquisite-looking cupcake, most of which lingers uneaten.
Taking advantage of a big brand is a strategy that Hearst has learnt from its association with Oprah Winfrey, as publisher of her spin-off magazine.
In the same model as the hugely profitable O, Hearst has this month published its first issue of a new title, Food Network, linked to a popular television channel of the same name. “It is easier to launch a magazine if the brand is already there,” she says.
Ms Black believes that the next big medium for expanding the reach magazines could be the e-reader – portable, hand-held devices where the user can view the equivalent of printed content on a screen. Although the current platforms, Amazon’s Kindle and Sony’s Reader, are expensive and not yet widely used, it has the potential to exploit the vibrant, stylish layout of a consumer magazine.
“The company has a big investment in a product called Firstpaper,” Ms Black explains. “Some time soon, we will have e-readers about the same size as magazines.”
For example, the cover of Hearst Magazine’s Good Housekeeping might advertise 117 recipes inside. On an e-reader, the user would simply touch the screen to flick to the page electronically .
“There are two hold ups,” Ms Black concedes. “Most readers don’t do full colour yet and there’s no way it can handle advertising at this point. But there will be advertising. That has to be that part of the model.”
So it is crucial for media companies to avoid the mistakes they made when unleashing valuable content for free across the internet?
“When Rupert acquired the Wall Street Journal, he kept the paid-for model, but I don’t think it’s the right solution for magazines,” Ms Black says casually, clearly on first-name terms with the powerful owner of News Corporation. “The internet is rarely profitable for us, but you can’t just start charging subscriptions [for magazines] because they are not informational like a financial newspaper.”
Although Ms Black is unwaveringly optimistic about the future of her century-old print products, many famous titles have seen double-digit decline in their advertising revenues. The climate for magazines has been “very tough”, she admits, but nowhere near the severity experience by newspapers.
“Hearst magazines have been through pestilences and world wars and all kind of recessions,” Ms Black laughs, then shakes her head. “But it’s terrible for US newspapers. We have to think of magazines and newspapers as two very separate entities – not disassociating ourselves exactly, but we do need to keep our distance.”
One strategy to overcome the downturn is a greater focus on international publishing, where hundreds of magazines – accounting for 40pc of revenues – grew more than the US titles last year. China, Mexico, Argentina, Brazil and Eastern Europe all posted net increases in sales. In Russia, Cosmopolitansells almost 1m magazines per month.
“Its too expensive to launch another $100m magazine in the US right now,” Ms Black admits. “But elsewhere it’s a different story. Harper’s Bazaar has debuted in Bulgaria and expects to launch editions in Ukraine, India, Serbia and Croatia this year.”
Hearst’s culture of efficiency will also help the corporation resist the downturn, she insists. The company is nowhere near as luxurious as Vogue publisher Conde Nast. A practical, goal-driven background in advertising sales has given Ms Black the direction to drive structural change.
“I would suggest in our magazines today, a marketing department is truly functioning like an in-house advertising agency,” she says. Hiring people to mastermind big campaigns, photographers, copywriters and creatives also helps Hearst to meet tighter deadlines, as cash-strapped advertisers need to make decisions closer to print deadlines. Its marketing department now single-handedly produces 600 pages of advertising a year, for big brands such as Pantene.
One of Hearst’s big marketing ideas was fitting the February edition of Esquirewith microchips that showed a scrolling, eye-catching advertisement for a cable television channel – the first ever digital screen in a printed product.
The project was complex, with the chips manufactured in China, inserted in Mexico and driven to distribution points across the US in a special refrigerated truck. But these are the gimmicks that attract new advertising clients to pay more for their presence in a magazine, Ms Black says.
Subscriptions may accounts for 90pc of all magazine reading in the US, but digital screens and free gifts lift more the magazine’s more profitable shelf sales.
In the Darwinian arena of the newsstand, magazines that do not attract the reader’s eye will not last for very long, speeded into decline by the recession.
“Do I think 7,500 US magazines – many of them are duplicative – will survive? No,” says Ms Black.
So would Hearst consider shutting a big title during the downturn if it was not making money – like Conde Nast’s Portfolio that recently printed its last edition?
“Portfolio was sobering, but not a bad thing,” she says. “If it’s an old magazine, you tend to stay with it longer. There’s a shorter leash for newer magazines, because if it’s not successful today, it’s probably not going to be.”
Despite the tough attitude to failing titles, Ms Black is convinced that glossies to read in the bath, on a plane, in a doctor’s waiting room will not die away.
“Maybe now there’s too much choice in the digital world,” she laughs. “How funny if we all ended up back with our print copies.”
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