Ravi Somaiya has a report in the Times today about internal shifting inside of Condé Nast and some of the business challenges they’re facing. Key graf:
In a separate interview, Mr. Sauerberg confirmed that Condé Nast took in over $1 billion in revenue in 2015. The company said that while its print business, spread across nearly 20 magazines, remained profitable, revenue there had been flat since 2012. Its digital business is up nearly 70 percent over the same period but that component, as with virtually every other legacy media company, represents a much smaller percentage of overall revenue, which has declined in recent years.
If you haven’t spent any time in or covering CN, you’d probably have the following question: Why can’t CN make digital work? Everybody understands why print is flat (except maybe a few holdouts at CN, to be fair). But this is a company with a lot of smart editorial people. What are they doing wrong?
I’m going to shamelessly speculate**:
If you look at the political structure of CN and the reporting lines, all editorial lines report to Anna Wintour. And when I say editorial, I also mean branded content, etc. All business lines report to Sauerberg and other CN chiefs with print backgrounds. And let’s just say they’re not averse to micromanagement.
Wintour is a brilliant editor and creative director, but you’d be hardpressed to find any evidence that she–or anyone else at CN really understand the digital business and specifically, how it differs radically from print. Too many traditional media companies think print or broadcast expertise translates directly to digital, because on some level, in the back of their heads, they assume digital is easier. Or that it should be–lower barriers to entry, etc.
And digital is different, not easier. Taking a print person and throwing them at a digital problem is no different from taking the head of NBC News and making her the editor in chief of the New Yorker, or vice versa. These skills sets are not transitive.
Digital is different in the way it is consumed, and the way it is monetized and it’s not clear that CN even really thinks about digital except in a way that pairs those elements with print analogues. It’s heavily reliant on display and despite the fact that they have the resources to develop and deploy better ad tech, they don’t. They don’t do much in the way of integrated creative services, experiential media, etc.–and what they do manage to execute is not exactly cutting edge. Inasmuch as they’re aware that their media will largely be consumed outside of a web browser, you don’t see it translating to best in class mobile apps or cross-platform experiences that really engage their readers or even better, build new audiences.
And this is partly because they still think of their brands as 99% words and photos on a page. But here’s a question: what does Vogue look like if you can’t read it in print and you can’t just go to Vogue.com? What does Vogue mean anymore without that? Are they thinking about this? As an institution? Because those of us who work in indie publishing think about this all the time. What do our publications (and content) look like for users who see them primarily on social platforms? In a message on Slack? As part of an offline experience? And how do you monetize while leveraging third-party distribution systems you don’t control? How do you build consistent engagement when the media consumption experience is so fragmented? How do you then measure than engagement across the reader’s entire experience of your brand?
I know there are going to be some people at CN reading that and saying YES, SO AND SO IS WORKING ON THAT RIGHT NOW. I’m saying that no one at CN is thinking about these things with any urgency, but if there’s anyone there over the age of 25 who really understands the implications of Snapchat and has any actual decision making power, I would be surprised. Right now any smart digital people CN does have report to people who can’t decipher what they’re looking at, and they don’t have the autonomy to really do their jobs. So let’s rephrase the question: are the people who may be thinking about and working on those problems people who have any capability to get anything done politically? Can they work without being stifled by legacy concerns? Are they properly resourced? My guess is no.
Which is why I suggested earlier on Twitter that maybe it makes sense for CN to acquire a small agency that does 360 degree executions including great branded content instead of trying to make its existing talent base do things it can’t. (I would also suggest something that I have been suggesting every year I’ve worked in media: take R&D seriously and resource it like you’re aiming for growth and not just looking for some quick technical fix to get you out of a rapidly collapsing sinkhole. )
Of course, acquisitions are like organ transplants. The host’s first inclination is always going to be to reject the transplant on some level, but you can mitigate that. (Keep the shop out-of-house, and give it some autonomy. Don’t try to integrate it to death, just use it to do more unconventional executions and to educate people internally about how the process works and what the competition really looks like. Organ transplants: risky, but they save lives!) It’s also something I suggest as a near last resort. I don’t think that CN politics are amenable to bringing individuals in house and expecting material changes–at least not without the buy in of people at the top, who are still very print minded, even if they’re trying their hardest not to be. At some point in the future, digital is going to be their core business. Not a complement, and not a hedge. Core. Maybe not tomorrow, but when it is, who’s going to be responsible for making it work? Anna Wintour? I doubt it.***
** Though it’s not entirely speculative; I covered CN as a media reporter for a while and did some consulting to Bob Sauerberg’s then department on a tablet mag when the iPad first came out.
***I hope she proves me wrong. If big publishers learn how to do these things, I think it’s better for all of us.