Why "Gourmet" Was a Recipe for a Disaster - Steve Blacker - MediaBizBloggers

Disclaimer I worked at Conde Nast for six years as SVP Market Research until 2001 I was let go by Steve Florio who had originally hired me I have a high regard for most of the editors publishers and other corporate executives I know thereConde Nast brands are some of the most powerful in the business Think about it Vogue Glamour Gourmet Vanity Fair The New Yorker GQ to mention just a few Theknotcom is profitable and less than a decade old Conde Nast had three major bridal publications and could not launch a profitable Web site over the past 10 years That39s the major problemChuck Townsend is probably one of the smarter media executives in the business today Chuck is a no nonsense strategic thinker with tremendous focus and the ability to solve problems ahead of time Unfortunately he has a shadow manager Si Newhouse who starts each day at 400 AM and micro manages the company Si39s focus is totally on the old business model eg are pages up or downSo what39s the problem Gourmet39s September issue39s masthead lists 111 full time staff members The major departments are ad sales and marketing with 33 and editorial art and production also with 33 people By comparison online has just two full time staffers backed up by 12 contributing editors and 4 correspondents Given the strength of the Gourmet brand what other magazine closing would have made the front page of the New York Times The fact that it could not develop a profitable digital strategy was a major problemNEED TO DOWNSIZE PRINT ampamp GROW DIGITALThe September issue was a scant 116 pages and contained 6 different advertising sections Did Gourmet need so many editorial people to produce a monthly magazine that was mostly picture and recipe driven And so many ad sales and marketing people By contrast Saveur owned by the profitable Swedish Publisher Bonnier is produced and marketed with almost 50 fewer people and is a very classy looking magazine Gourmet39s rate base was an unrealistic 950000 Even with newsstand off over 20 this past year circulation grew via cut rate subs By charging subscribers more Gourmet might have had to reduce its rate base to 700000 Conde Nast needs to figure out how to have profitable print businesses with realistic rate bases while growing digitalTHE CORPORATE CULTUREWhile Chuck Townsend knows what to do his boss the benevolent dictator Si Newhouse seems slow to want to make the draconian changes that are necessary Si has run Conde Nast more as a hobby than a real businessHe treats his star editors and publishers like movie stars of some bygone Hollywood era Car services were so abused when I was there that one top editor used them to deliver his Christmas cards While executives at Time Inc Hearst and Meredith often rode the subway Conde Nast39s had black Mercedes servicing them 7 days a week including trips back and forth to the Hamptons Corporate executives approved their own expense accounts Business and first class air travel were the norm How could one not become pampered and selfindulged working in such an environment Publishing reality and any realistic business model was lost in the dream land of excess extra pages above industry salaries and virtually every perk imaginable Even regular staffers used car services If Chuck Townsend was truly in charge instead of Si the company would be run much more like a business with a greater emphasis on making digital a real profit center with unlimited growth potentialSi had the guts to stay with Vanity Fair ampamp The New Yorker But unfortunately Si did not listen to others when he relaunched House ampamp Garden and launched PORTFOLIO in the midst of a major recession and sea change for print media caused by digital Si continued to focus on pages as more and more advertisers were putting their money into digital While Conde Net was launched way before anyone had gained a major toe hold in digital its strategy was obtuse from the get goRather then marketing their wellknown brands Conde Net created new ones And even though the executives in charge had major budgets and large staffs no one really held them accountable In fact they are still in charge of digital today Unlike Rupert Murdoch who acts quickly when he sees a problem Si seems reluctant to move too quickly The big question is whether Si will let Chuck Townsend and John Bellando make the necessary business decisions and dramatically slash existing budgets across the board Anna Wintour is a great editor but she has a staff almost 3 times the size of ELLEUNREALISTIC RATE BASES DO NOT CREATE QUALITY MAGAZINE AUDIENCES Gourmet39s most recent rate base was 950000When a magazine grows beyond its natural core audience it will lose its quality demographics making it much less appealing to advertisersTHE FUTURE CONDE NAST IF IT IS TO BECOME PROFITABLE AGAINLower rate bases higher sub prices major staff reductions no more car services one staff to produce all content print and digital major reduction of individual magazine sales and marketing staffs most pages sold are part of corporate packages one sales and marketing staff for print and digital fewer corporate executives a new management team for digital basically learning how to exist profitably with the great brand stable they still have left Consider folding Fairchild into the Advance Management structure to eliminate the high executive salaries that currently existWill the current publishers editors ampamp corporate executives be able to change That is an unknown question Given the high salaries Conde pays people they should have no problem attracting people with the know how to take their great brands to the next level Si loves magazines can he fall in love with digitalSteve39s new book You Can39t Fall Off The Floor The Insiders39 Guide to ReInventing Yourself and Your Career chronicles his 50 year career working for over 25 different companies with 189 lessons learned and insider tips from Gayle King Cathie Black Chuck Townsend and 28 others Blacker is still going strong today as a partner in Frankfurt ampamp Blacker Solutions LLC His web site is blackerreinventionscom and email address is blackersolutionsaolcomRead all Steveamp8217s MediaBizBloggers commentaries at Steve Blacker MediaBizBloggersFollow our Twitter updates MediaBizBlogger

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Why "Gourmet" Was a Recipe for a Disaster - Steve Blacker - MediaBizBloggers

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