Wednesday, August 7, 2013

The Changing Face of Media Brands

Having spent almost thirty years in the media business, I feel some sadness when once-marquee brands are passed around the investment community like an unwanted Christmas pudding.  I’ve had many friends at Newsweek and have had occasion to visit a number of their international editions.  In some respects, the magazine seems now to have more cachet outside the country than in—but not by much.

Though I had no inside information, I never had much confidence in the Daily Beast/Newsweek marriage.  The editor, Tina Brown, seemed to be still paying too much attention to the “buzz” factor, which was the operative word that described her failed Talk magazine.  I joined Hachette just in time to review the Talk business plan that Ms. Brown was shopping.  As an investment vehicle the plan made little sense to me, so I recommended Hachette pass, which they did.  Hearst and Miramax stepped in and funded the short, unhappy life of Talk

This closure of Talk got outsized attention because of Ms. Brown’s celebrity and her successes at Vanity Fair and The New Yorker.   Even though by Talk’s launch in 1999 digital was decidedly in the air, most publishers considered it a curiosity and not seismic disruptor.  David Carr wrote in The New York Times on the tenth anniversary of the launch part that the “Talk party was the end of an era, a literal fin de si├Ęcle.  Flush with cash from the go-go ‘90s and engorged by spending from the dot com era, mainstream media companies seemed poised on the brink of something extraordinary.  But the brink ended up being a cliff.”  Ms. Brown recalled, “It seemed like that happened in the 18th century.”

Newsweek has been sold to International Business Times for an undisclosed sum that was likely pocket change.  IBT is a digital media company with 200 employees.  Christianity Today and The New York Observer have linked IBT to controversial Korean Christian preacher David Jang, who has been hailed by his followers as the Second Coming Christ.    

On the heels of the Newsweek sale came the announcement that The Boston Globe had been sold for $70 million to the owner of the Boston Red Sox and The Washington Post was sold to Amazon’s Jeff Bezos in a personal transaction for $250 million.  You can do the math.   The New York Times purchased The Boston Globe in 1993 for $1.1 billion.  The Washington Post was worth more than that a decade ago. 

James Fallows at The Atlantic online captured the moment, describing the Newsweek sale as a tremor and the Washington Post sale as an earthquake.  Understandably, there is a great deal of nostalgia around this transaction.  Perhaps The Post had its finest hour forty-two years ago when the Supreme Court ruled for the paper and the publication of the Pentagon Papers changed the course of American history.  More recently, of course, The Post, along with The Guardian, published a trove of NSA documents.

That said, The Post was failing as a business—it reportedly lost $50 million in the first half of 2013.   For all of its journalistic “firsts,” The Post has become something of the company paper in the company town of Washington, DC.  Please read Frank Rich’s article, “The Stench of the Potomac” in the current issue of New York Magazine for his acerbic take on the media’s role in cultivating a political plutocracy where the dominant color is green, as in greenback.   Rich takes some of the wind out of the nostalgia sails.

Naturally, there’s a lot of chatter about Bezos’ purchase of The Post, with some claiming that this is a personal philanthropic move and others suggesting that this is a way to get in the middle of the Washington discussion about taxes, patents, and anti-trust, and monopolistic practices.  Henry Blodget, CEO of The Business Insider, where Bezos is also an investor, suggests that this is a straight business move, even though the transaction is separate from Amazon.  But the business model is implicitly there.  After all, Amazon is in the content production and distribution business.  It’s also in the subscription business with the Amazon Prime offering.  And Amazon is in a position to do what few companies have managed to do at scale:  integrate content and e-commerce.  There is every reason to think that The Post will have a robust digital future.

When I learned that Newsweek had been sold yet again, I reminded myself that magazines and newspapers of all stripes have been coming and going for a hundred years or more and the pace of this change has only been speeded up by digital disruption.  Tastes, psychologies, cultural fixes, collectibles, entertainment, vicissitudes, and the-next-big-thing change and change again.  Most magazines don’t live long enough to become brands.     

George Magazine, with John F. Kennedy on the masthead as publisher, should have been a sure thing, positioned as the intersection of politics and celebrity.  I joined Hachette after the publisher became a partner with Kennedy.  I found the editorial soft and mushy and could not identify the business rationale.  Hachette tried to keep it going after Kennedy’s tragic death, but was forced to shut it down in 2001.  The French fantasy about Camelot kept the magazine going longer than it should have.

Sometimes a magazine’s market position and reason-for-being simply changes or disappears.  Mademoiselle, launched in 1935, was a classy title that couldn’t shift its editorial enough to match the changing sensibility of a new generation of readers.  It also closed in 2001.

Or magazines just run their course, as was the case with McCall’s magazine, launched in 1873.  Some of America’s greatest writers, including F. Scott Fitzgerald and Willa Cather, wrote for the title.  Changing the title to Rosie in 2000, with a very loud Rosie O’Donnell as editorial director, didn’t help and it was shuttered in 2002.   The women’s category, long-called the Seven Sisters, has suffered the most disruption.

Prodded by the Newsweek story, I looked at hundreds of magazines that have closed in the US in the last few decades.  In a way this period was a wonderful time for magazine launches.  The economy was good, especially in the 1990's.  Consumers were becoming much more interested in special-interest magazines that focused on sports, crafts, and hobbies.  “Zines” were all the rage.  And print advertising was strong.  So why not The Glam Eye that focused on the music scene around Toledo, Ohio; New York Dog that was designed to sit alongside Vogue and Cosmopolitan on the newsstand; Psychoanalysis, a comic book that featured three patients in analysis; Sassy, a teen magazine focused on sex, love, and rock & roll; Syrian World, about that country’s high culture; and Greed Magazine, another way to consume music.  Those were the good old days.

Even if the Second Coming Christ is not a secret investor in the business, Newsweek is probably better off with IBF, even though this digital-only company is reportedly flirting with the idea of a print edition of the magazine.   Likewise, The Washington Post will surely be much better off with Bezos at the helm.

I don’t know how much we should infer from the fact that The Washington Post owned Newsweek from 1961 to 2010, selling to stereo equipment magnate Sidney Harmon for $1 and some liabilities.  He then entered a JV with IAC; thus the short-lived marriage with The Daily Beast.   

At the very least, it was time for new money, new management and new thinking to enter this game of brands.

Or to borrow lines from poet W.H. Auden:

“Harrow the houses of the dead; look shining at
New styles of architecture, a change of heart.”

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