Two-thirds of the profits at Hearst Magazines are still coming from print. And unlike other magazine publishers, David Carey says he’s in no rush to change that.
“We reject this notion of ‘digital first,’ because we think that denigrates the core business,” said Carey, the president of Hearst Magazines, on the latest episode of Recode Media with Peter Kafka. “We think there’s a lot of money to be made in the print business.”
Media businesses need a “moat” to protect themselves, Carey explained — Hearst’s is its collection of influential and credible brands, such as Cosmopolitan. And it’s becoming clear that some cash-burning web publishers don’t have much protecting them from failure, he said.
“I think you guys have got a great company here, and real expertise,” he said. “My son and three of his friends can start a competitor tomorrow. You don’t worry about my son and his friends, you worry about the 5,000 versions of my son and his friends, because it only costs them $5,000 and they’re in business.”
You can listen to Recode Media on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts.
Carey’s no Luddite — he led Hearst’s flirtation with iPad magazines, and when that fizzled out, struck a partnership with Snap to get Cosmo and other magazines featured on Snapchat Discover, which he says now was an easy decision.
But on the new podcast, he questioned the durability of digital media companies that have historically been reliant on advertising. To last, these companies would need at least 25 percent of their revenue to come from non-advertising sources such as live events, data or e-commerce.
“These businesses that have been, early on, gaming the ad system to show 20 to 30 percent growth on small numbers — that’s kind of easy,” Carey said. “The degree of difficulty of running a money-losing digital business is like zero.”
“I’m reminded of one of the great scenes from ‘Toy Story,’” he added. “Buzz says he’s going to fly and Woody says, ‘No Buzz, that’s not flying, that’s falling with style.’ I think for some of these companies that have lost a huge amount of money, by going back to their investors, have been falling with style. In 2018, the rubber meets the road.”
If you like this show, you should also sample our other podcasts:
- Recode Decode, hosted by Kara Swisher, is a weekly show featuring in-depth interviews with the movers and shakers in tech and media every Monday. You can subscribe on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts.
- Too Embarrassed to Ask, hosted by Kara Swisher and The Verge’s Lauren Goode, answers all of the tech questions sent in by our readers and listeners. You can hear new episodes every Friday on Apple Podcasts, Spotify, Pocket Casts, Overcastor wherever you listen to podcasts.
- And finally, Recode Replay has all the audio from our live events, such as the Code Conference, Code Media and the Code Commerce Series. Subscribe today on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts.
If you like what we’re doing, please write a review on Apple Podcasts — and if you don’t, just tweet-strafe Peter. Tune in next Thursday for another episode of Recode Media!
This article originally appeared on Recode.net.