A People With Passion series
September 30, 2011: Christie Hefner
In the tenth installment of Jack M Silverstein's Chicago journalism People With Passion interview series, former Playboy CEO Christie Hefner examines the state of print journalism.
One of the big themes that keeps coming up in these interviews are the changes in journalism – how it’s presented, and really the cross between print and digital. I know that you’re very proud of the way that Playboy pushed itself to the digital world. What do you think the Tribune and the Sun-Times and other print publications could learn from the way that Playboy has approached that?
I think part of it is the classic question in business of understanding, and then executing the implications of that understanding, What business are you in? If you think you’re a newspaper company and then you have these ancillary businesses, that’s going to lead to a certain set of decisions from how you organize people to how you measure success. Magazines are brands and content that live beyond their pages. We tried to think of ourselves as a multimedia content company and a lifestyle company, both of them driven by a brand. And if you think that way, you look for the intersection between your brand and your style of content and each new medium.
It isn’t the same as re-purposing or porting content from one format to another, which was a mistake that a lot of people made going back pre-internet to the early days of cable television. Many magazines talked about having a channel, because now all of a sudden there were fifty channels instead of three. We were not the only people that thought, “Gee, that might create an opportunity for branded channels that people would turn to as opposed to what historically people did,” which was tuning in to individual TV shows. It wasn’t like you said, “I’m going to watch CBS.” You said, “I’m going to watch The Defenders,” or whatever the show was.
Lots of magazines saw this as an opportunity, and no other magazine was able to build a television network other than Playboy. I think one of the big reasons for that – many companies had far more resources than Playboy had, so it wasn’t about money or people – was that they got locked into a way of thinking about what that meant that narrowed their focus of what it could mean if you thought about the brand and the style of content as opposed to literally what you were publishing and how to put that onto television.
And that even became true in the internet. When you think about it, a lot of the sites that are in areas that historically magazines had big success in were developed by startup internet companies, not by magazines. It was The Knot, not Brides Magazine. It was TMZ, not People. That kept repeating itself. So I think part of the answer to your question is that the hardest thing to do in any business, especially if you’ve been successful in something, is to be disruptive about it.
The other part, which is true, is that magazines and I think even moreso newspapers have suffered from unhealthy business models in this country for a long time, and they’ve been very slow to acknowledge that. On average, magazines in the U.S. get 60, 65% of their revenues from advertising, maybe a third from circulation. For newspapers maybe it was 80, 90% of the revenues from advertising and maybe 10 to 20% from circulation. Having built magazines around the world, it was very interesting to me to see that almost no other country has that model. In almost every other country, the majority of revenues come from circulation. That’s because the trap of deep-discounting subscriptions is not a trap other countries have fallen into. Whereas in this country, if you look at the way we promote magazine subscriptions or newspaper subscriptions, you’re paying pennies for each copy.
(in announcer voice) “Get on board now, and you’ll receive – !”
Yeah! And you’ll also get a cell phone! (Laughs.) It’s sort of like, “And take my magazine, please!” What does that say about the value of what you think you’re creating if you’re charging pennies for it because your primary business model is predicated on selling the audience to advertisers? And of course, when advertising doesn’t go up by double digits and allows you to raise your CPMs significantly every year, which for a long time it did, when big chunks of advertising like classifieds go away because they migrate online, then you’re really in trouble. So I think newspapers are scrambling today to figure out both what’s the right business model and what business they’re in.
Enjoy this interview? Click here for a longer version, as Christie discusses her introduction to journalism and the value of Barnes & Noble.
Check back every Wednesday at Eye on Chi for more of Jack M Silverstein’s People with Passion interviews with Chicago journalists. Coming up next week: Chris Cascarano of the Chicago News Cooperative.
PREVIOUSLY IN THE SERIES:
(NOTE: The dates below refer to the date of the interview. The order is the date they were run.)
September 15, 2011: Alden Loury, Chicago Reporter
August 17, 2011: Steve Chapman, Chicago Tribune
September 13, 2011: Kimbriell Kelly, Chicago Reporter
August 26, 2011: Chuck Sudo, Chicagoist
August 17, 2011: Clayton Hauck, photographer
December 12, 2008: Alex Kotlowitz (re-edited August 15, 2011)
August 10, 2011: Mary Schmich, Chicago Tribune