Editor’s Note: Jeffrey A. Trachtenberg, Wall Street Journal news editor in New York, interviews Stephen Lacy, Executive Chairman of the Meredith Corporation. Access to the full article is available by clicking on the link below.
WSJ: Why was it so important for Meredith to get bigger?
MR. LACY: In all conversations with our major advertisers and marketers, they’ve said they want to do larger cross-platform deals with fewer players. The ability to have a consumer audience that moves across all major adult life phases creates so many more opportunities. We now reach 200 million unduplicated consumers with 60 million unduplicated subscribers. (As you may well know, Meredith recently purchased Time Inc. Meredith also owns 17 local broadcast TV stations.)
MR. LACY: In all conversations with our major advertisers and marketers, they’ve said they want to do larger cross-platform deals with fewer players. The ability to have a consumer audience that moves across all major adult life phases creates so many more opportunities. We now reach 200 million unduplicated consumers with 60 million unduplicated subscribers. (As you may well know, Meredith recently purchased Time Inc. Meredith also owns 17 local broadcast TV stations.)
WSJ: Hasn’t that changed over the years?
MR. LACY: The median age of the reader is fundamentally the same-and so are the renewal rates. The businesses in our industry that have struggled the most look like newspapers—they create time-sensitive information. We focus on life-stage activities, such as having a child, or lifestyle activities, such as cooking, gardening and decorating. That’s what gives us confidence: our connection to our consumers, and the fact that consumers pay for our content.
MR. LACY: The median age of the reader is fundamentally the same-and so are the renewal rates. The businesses in our industry that have struggled the most look like newspapers—they create time-sensitive information. We focus on life-stage activities, such as having a child, or lifestyle activities, such as cooking, gardening and decorating. That’s what gives us confidence: our connection to our consumers, and the fact that consumers pay for our content.
WSJ: Newsstand sales are declining nationwide at a steady pace. Isn’t the newsstand the best barometer of consumer interest in print magazines?
MR. LACY: Absolutely not. The newsstand business was built in an environment where the consumer went to the supermarket three times a week. There was no Costco or Sam’s Club. Now the average consumer makes a big monthly run to those stores, and uses the grocery store to shop the perimeter for fresh meat, the bakery and produce. As a result, there is less impulse buying. You’re going to see us continue to focus on the subscription side of circulation, and only focus on places with [high magazine sales] where you make a lot of money.
MR. LACY: Absolutely not. The newsstand business was built in an environment where the consumer went to the supermarket three times a week. There was no Costco or Sam’s Club. Now the average consumer makes a big monthly run to those stores, and uses the grocery store to shop the perimeter for fresh meat, the bakery and produce. As a result, there is less impulse buying. You’re going to see us continue to focus on the subscription side of circulation, and only focus on places with [high magazine sales] where you make a lot of money.
WSJ: Can publishers increase revenue today?
MR. LACY: After we get the portfolio rationalization complete, and we can compare on a same-store basis going forward, we think we can. We think we can move Time Inc.’s advertising revenue in the marketplace to performing at a level of what we’ve done, and reach a point where the growth in digital offsets the print declines and allows for organic growth. We’ve got a couple of years of hard work to get this bigger portfolio to that place.
MR. LACY: After we get the portfolio rationalization complete, and we can compare on a same-store basis going forward, we think we can. We think we can move Time Inc.’s advertising revenue in the marketplace to performing at a level of what we’ve done, and reach a point where the growth in digital offsets the print declines and allows for organic growth. We’ve got a couple of years of hard work to get this bigger portfolio to that place.
Trachtenberg, J.A. (2018, February 15). Meredith Corporation Makes the Case for Magazines. The Wall Street Journal.