Early this year, global media company Condé Nast announced it had made a profit in the 2021 financial year, the first in several years. Although the company did not disclose the quantum of the profit or for how long it has been making losses, it attributed the profits to a “strong digital-revenue growth” and cost savings from restructuring operations.
Condé Nast is the publisher of international magazines such as Vogue, Bon Appétit and New Yorker. In recent years, specifically around the time of the George Floyd protests in the United States, the magazine has been in the spotlight for racial discrimination and workplace toxicity. In spite of this, it has managed to turn around the business and it appears that their strategies are paying off.
In an interview with the New York Times, Roger Lynch, the CEO of Condé Nast, said the firm was “no longer a magazine company” because a majority of its revenue is digital, as is increasingly the case for many global print newspaper and magazine publishers.
Embrace social media
So, what worked for Condé Nast and what does this mean for local newspapers whose bulk of revenue still comes from print advertising?
The first thing the company did was to fully embrace social media and digital video publishing because the majority of their audiences were interacting with their content online, on their websites and social media and not as many were reading their printed magazines.
“We have about 70 million people who read our magazines, but we have 300 something million that interact with our websites every month and 450 million that interact with us on social media. So our audience is already telling us that that’s not the way they interact with us as a magazine company,” said Lynch in the interview with the New York Times.
This realisation has led the company to invest heavily in high-quality video content on YouTube, Facebook and Instagram, while making grand plans for TikTok. While the advertising revenue share may not be that attractive, the company is still pursuing this line of publishing because these digital channels are “where audiences expect our brands to be”.
The second strategy was to put some of their content, such as Vanity Fair and Wired, behind paywalls and take advantage of the growing paying subscriber market. The company combined this with an e-commerce business where it makes money after customers click on links and buy products advertised on their websites. This reader-revenue model, which includes paid subscriptions and e-commerce platforms, now accounts for about a quarter of the company’s global revenue.
What this therefore means for local companies still in the print advertising business is that investments in digital publishing, paywalls and talent will pay off in the long run if nurtured and supported.
While our markets may not be in the hundreds of millions, audiences everywhere share one trait: they know quality when they see it, and many are willing to pay for it.
The writer is the director, Innovation Centre, at Aga Khan University; [email protected]