Portfolio pits Old Media against Web models

Nearly a year ago, at a lunch symposium at the Four Seasons restaurant in midtown Manhattan, Portfolio editor Joanne Lipman asked Google exec Eric Schmidt how search and personalization could change the publishing business.

“A lot of magazines are having revenue problems as the model shifts,” Schmidt replied. But the ability to offer targeted personal ads “is an opportunity for them.”

Portfolio isn’t trying anything as radical as ads tailored to individuals — at least not yet. In fact, the monthly’s model is decidedly Old Media, and quintessentially Conde Nast: Announce a magazine with fanfare, spend months rounding up ad buyers, lock down commitments for high-priced packages, then build circulation with a solid roster of top writers and glossy photos. (The mag will then take a hiatus until September, gathering feedback from the first issue and skipping the traditionally weaker summer season.)

Publisher David Carey says the mag’s proposition makes sense: The business category has a huge potential audience but a dearth of readable magazines.

“We found that the vast majority of people who read business magazines feel like they’re reading homework,” he says. “We want to bring classic Conde Nast values — in-depth reporting and amazing photography and illustration — to this category.”

The ad coin is necessary if a publication like Portfolio, which debuted earlier this month, hopes to subsidize the generous salaries and freelance fees for which Conde Nast is known.

Luring writers like Tom Wolfe, who authored an article about hedge funds for the inaugural issue, won’t come cheaply, and the magazine will have to pull in plenty of ad revenue to turn a profit.

Carey says the mag already has 53 advertisers, more than half of which have advertised in one title or fewer in the Conde Nast empire.

But the suggestion of a more progressive model for magazines — at a lunch for the very magazine that is embracing a more traditional conception of the business — raises a pointed question: Can the conventional model for print titles still work when so many ad dollars and eyeballs are flowing to the Web?

These are uncertain times for the New York publishing world. Unlike nearly any other time in media history, it’s not just a group of print publications that’s in question, it’s the idea of print itself that seems so shaky.

Magazines with weekly lead times are struggling to keep up with the pressures of daily print publications as well as the Web, not to mention grappling with the fundamental question of whether they should reinvent themselves as breaking news outlets.

It’s a question that magazines like Entertainment Weekly, which has built up relatively little brand equity as a breaking-news site, and even general-interest publications such as Newsweek and Time, have encountered and responded to in diverse ways.

The newsweeklies have shifted personnel and resources to breaking news, video and other Web-friendly innovations, even as the magazines themselves are pulled in analytical or service-oriented directions.

Even those in the more lucrative business-publishing realm have struggled. Portfolio competitors like Fortune and BusinesWeek have lost between 14% and 18% of their ad pages over the last four years.

And monthly magazines that don’t have a policy or intellectual bent are practically an endangered species, as Premiere learned recently when it shuttered after years of fading relevance to the entertainment community.

There are still print titles successfully employing the old model. Often, though, they are titles with specialized interests (like foodie monthly Saveur), a previously untapped audience (witness the growth of the lifestyle and decorating mags at Time Inc.) or a relentless cost-consciousness (the celebrity titles of Bauer Publishing).

And there are a number of print enterprises, particularly in the newspaper space, that have found the right harmony between print and Web. The Wall Street Journal and New York Times, for instance, both manage to secure a large number of visitors and growing ad dollars online without eroding their print readership.

But even they sometimes do it with duct tape and glue — by trafficking on an age-old brand or by using a well-paid print reporting staff to double dip with relatively inexpensive blogs.

Sometimes they’re even forced to resort to cutting corners — literally, with both papers now reducing trim size to save on costs.

“Everyone pays lip service to the Internet,” says longtime magazine consultant Martin Walker. “But not everyone is facing the same problems. The basic rule is that the more general-interest your publication is, the more competition you’re going to face.”

Walker notes that titles like Saveur have made strides because they’re able to offer specific services to a defined audience. Newsweeklies and newspapers haven’t been as lucky.

One media expert compared the current situation to the way cable nets without a theme or a niche have struggled to find a sufficiently dedicated audience to keep the business flourishing.

Portfolio will prove a telling test case. If Conde Nast can make it work, creating both a journalistically and financially solid enterprise, then there may be life in traditional media yet. Sure, it could take an elaborate sales team (about 20 dedicated Portfolio reps and the efforts of the larger corporate sales team) and valentines in the press (no less an outlet than the American Journalism Review recently offered that Portfolio was “exhaustively reported, literary and slick,” before a single page has been published).

But combine the right talent (Blaise Zerega, Matt Cooper, Kurt Eichenwald, to name three) with enough buzz, and you cannot only sell a magazine based on an established brand, you can create a new brand out of whole cloth.

“Magazines have been challenged,” Carey says. “But during a period of great change, the classic behavior is a flight to quality, for readers and advertisers.”

The inverse, however, is less appealing — and, to some experts, a very real possibility.

It goes basically like this: After a buzz-laden launch, the magazine goes the way of Talk, the original Radar and scores of other similar and different titles with the right pedigree that failed to locate a profitable business model. Newsstand sales decrease, the rate base becomes harder to guarantee and eventually advertisers slink away.

And unlike Talk or any of its high-profile forebears, the stakes are higher in the case of a Conde Nast magazine. After all, if the company with glamour, editorial chops and profit and savvy ad reps can’t pursue an effective print strategy, who can?

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