When most print magazines have been devoting more and more effort to digital operations to save their very skins … The Week magazine has been growing print subscriptions and advertising sales like it was the glory days of the 1960’s.
How are they doing this, you ask?
How The Week continues to grow print revenue (and profits) in a dotcom world.
Mobile content and community brands dominated the media category of the 2011 Inc. 5000, which recognizes the 5,000 fastest-growing privately-held companies in the U.S. (The number one company in the media category: GoLive! Mobile, which “creates and packages content, including videos, games, and social media, for consumers to access on their mobile phones”, as well as offers consulting services to companies that want to create their own mobile content.)
But “traditional” publishers made the list as well, including two Felix Dennis-owned publications: Mental Floss, ranked #50 in the media category with three-year revenue growth of 52 percent to $3.1 million in 2010, and The Week at #51 in media with three-year growth of 49 percent to $38.4 million in 2010. Unlike many of the other publishers on the list, The Week continues to flourish as a print enterprise.
Here, president Steve Kotok talks to FOLIO: about how The Week continues to boost print revenue and profit, why readers are the brand’s best way of gaining new subscribers and why The Week is waiting until 2012 to finally jump into the app race.
FOLIO: The Week recently made the Inc. 5000 as one of fastest growing media brands. Where is the growth coming from?
Steve Kotok: I would say the growth is coming equally from subscription and advertising. The subscription growth is coming from our ability to raise price, that’s the biggest thing. According to ABC, our price is up 40 percent, and as measured by us as net-net it’s doubled.
On the ad side, it’s going from selling print ad pages to engaging with these larger brands. The number of ad packages we’ve sold at $500,00 or more since 2008 went from one to three to 10, this year it should be 15. The vast majority are combining print, digital, and events. We wouldn’t say, ‘Oh, it’s coming from print ads or digital ads.’ It’s coming from our ability to offer larger packages to the advertising brands and serve them if they want to make a splash in D.C., to serve them digitally, to serve them in multiple ways.
There is stuff we put in buckets for accounting, but when really looking at our biggest sales, we may say $600,000 of this goes to print, $400,000 goes to digital, and $50,000 goes to an event fee. We wouldn’t be able to sell any of it without the other.
FOLIO: Are packages coming from existing advertisers or new advertisers?
Kotok: It’s a combination. Every year you start new, some are existing advertisers, a lot of them are new…it’s definitely breaking a lot of new business but that’s not really a distinguishing factor. Every year we make our best shot at them.
FOLIO: Please talk about current revenue ratios (print versus digital versus other channels). What is it today and how has that changed in recent years? What does it need to be going forward?
Kotok: Subscriptions and print advertising are more or less equal with Web ads being 15 to 18 percent of the revenue generated by print ads. However, print and Web ads combined exceed subscription revenue.
FOLIO: Do you see that changing going forward?
Kotok: I don’t now if we will see a huge change. A few years ago we may have thought that ads were going to grow faster than subscriptions but our ability to grow subscription revenue and keep it growing has surprised us. I don’t think we’ll start doing more digital advertising than print advertising.
We’re going on the Kindle, Nook and iPad in January and that’s all circulation revenue. I don’t see the mix radically changing, although we still see our print subscriptions and our print ads growing. Web ads are growing faster but at 15 percent of print revenue, it’s not a massive shift—we may go 80/20, 75/25, print to digital in the future. We have a good business. We’re aware of the trends. Even before digital, there were trends to follow. We’re not embarrassed of print.