In a plan to place Condé Nast on the path to profitability, the publishing giant announced last week a new partnership between the company’s US and UK Traveller teams, to create one editorial platform in 2019.
Beginning with the January 2019 issues, all content creation for both US and UK editions will be led out of Condé Nast Britain, overseen by Melinda Stevens, editor-in-chief of Condé Nast Traveller. Additionally, the partnership will create one website across both countries with
“Travel is by nature global, and placing the editorial teams under one leader is a way to harness the expertise of two highly talented teams, delivering the best of all worlds to audiences,” said Albert Read, managing director, Condé Nast Britain. “In addition, the combined reach of both editions of the brands opens up innovative new opportunities for our advertising partners.”
The merger marks the start of a 5-year window to diversify the legacy magazine publisher’s revenues away from print advertising and return it to overall profitability.
A turnaround plan
Just last week, CEO Bob Sauerberg’s plans were approved by the Condé Nast board. Sauerberg’s plans aim to steer the company toward a position where advertising represents 50 percent of revenue, in contrast to the 70 percent of which it stands currently. The ambitious plan also aims to make the publisher profitable again by 2020 and add $600 million in new revenues.
This dramatic tilt in focus will require a tricky mix of cost-cutting in some areas and spending in other, high-growth areas. According to Condé Nast, the publisher expects to add 150 new roles in the next two years as it pursues five new areas of revenue, including video, creative services, consumer revenue, data licensing and events.
But the additional roles come at a cost. As the company narrows its focus on “core” titles and pivots to new business and revenue opportunities, there will be additional layoffs later this year and three Condé titles — W, Brides and Golf Digest – have all been put up for strategic review; indeed, one former executive said that a larger number of Condé titles might be available for the right price.
As first reported by WWD, sources have W editor-in-chief, Stefano Tonchi, looking to fund a purchase of that magazine, but there’s no clear interest yet in the others. Nevertheless, sources say the sale process should be wrapped up sometime in the fall, giving Condé a much needed year-end cash injection if it comes to pass.
Above all else, the 5-year plan to diversify the legacy of the magazine publisher will place Condé Nast up against a different kind of competition. While Google and Facebook dominate the digital advertising market, Condé will have to battle with holding companies, consulting firms and media and entertainment conglomerates if it wants to grow its agency, services and events business.
A move that other publishers can follow?
Shedding titles and cutting staff is not uncommon for legacy publishers. Even the previously untouchable Vogue has this year been forced to slim down and reduce its budget by placing high-profile and longtime staffers on contract instead of salary, but it’s only the latest to have the hammer lowered. Creative, copy and research teams have been combined and shrunk across the company, while big-time and well-paid editors like Keija Minor of Brides, Graydon Carter of Vanity Fair and Cindi Leive of Glamour all resigned last year, and were succeeded by younger, and presumably much lower-paid, hires.
Publishers on both sides of the Atlantic are looking for new revenue streams amid a deteriorating circulation and print advertising picture. Just last week, Reuters initiated a switch of its consumer strategy away from general news audiences, to target professionals, with a highly personalized news app designed to inform rapid business decision-making. It’s moves like this that highlight a publisher’s willingness to adapt to the evolving digital climate in search of more robust revenue models.
And that’s just it – adapting. ‘Nast’s decision to reevaluate and project a new 5-year strategy for greater diversity and profit is a result of reduced print advertising revenues alongside a precipitous newsstand decline.
Losses of $120 million don’t lie, and although much of Condé Nast’s strategy remains closely guarded, the changes seen over the last few months are only set to continue. And speed up.