When the Newhouse family tapped veteran media executive Roger Lynch in 2019 to lead the crown jewel of their holdings, Condé Nast, he inherited a company of fiefdoms. Its magazines, infamously, competed with one another for advertisers and cover stars, while Condé’s international business was its own silo. Lynch is now three and a quarter years into his job and has tried to unify Conde into one company. He has also shifted investment towards digital and video, making Conde a respected magazine-company brand and a major multiplatform player.
Video has always been a priority for me. You hired Agnes Chu from Disney to lead Condé Nast Entertainment. How do you think about investing in that market?
It all starts with the insatiable desire for streaming services to provide high-quality content. The emphasis is on quality. They’re in heavy competition with each other about having the best content. And the biggest constraint is the ideas, the intellectual properties, which is why you see so much of what Hollywood is producing is basically sequels and prequels, bringing back some idea from the ’70s. The IP we have is vast and we keep adding to it daily. While some of this IP was making its way to TV and film, it wasn’t through us. Brokeback Mountain, ArgoThese stories were first published in our magazines. But we didn’t really have a team that our writers wanted to work with, or that had the understanding of how to really build that business. We brought in Agnes, who brought in a whole team and has completely transformed the situation. Some of our most prominent writers are looking for ideas in television and film. The buyers are doing the same.
What’s the interplay between the types of content you produce?
The editors of the future really have to be people who can work across video, print, digital, social media, and that’s why we’re really focused on driving that alignment between them. You will see more of the storytelling we do in video. The New Yorker did a piece on these reeducation camps in China for the Uyghurs, and so they did a virtual reality video project: It told the story using video in virtual reality, and that’s a great way to use a capability technology to tell a story in a really creative way rather than just in a print article. So you’ll see more and more of that over time.
How can you make a brand like Vogue Or Wired Or The New Yorker Determine what kind of video content and film projects would make sense to be attached for that brand.
The company employs 1,800 content producers. There’s so much intellectual property that’s produced that it’s largely an exercise of looking at what is either in the works or coming out now and figuring out how to create that opportunity in film and TV. It’s actually even moving earlier in the process now, where we’re getting better integration between our film and TV business and our editorial teams, where they’re looking at how they might develop something together. There are now projects in which a story breaks, and we announce the production agreement. It’s already done. So it’s much more tightly integrated.
How big a business do you think that can really be for Condé Nast? How will video, digital and print revenue mix?
Last year is when we sort of reached the tipping point where digital was the majority of our revenue, and it’s only grown more this year, so we’re well past where it’s the majority of our revenue. Our business is growing at a rapid pace. It’s grown 30 percent or so in the past few years. We can reasonably expect that within the next few years video will account for about a tenth of our total business. Consumer revenue will also make up a tenth of our business. Traditional advertising will comprise a third. That’s how we think about the mix of our business changing. Six years ago, two-thirds of revenue came from print advertising. It’s going to be below 10 percent in the next five years, that’s sort of by our plan; it doesn’t mean print goes away, but the advertising side of it becomes less important, which means we have to have strong consumer business to support titles like Vogue and The New Yorker Vanity Fair.
Is there a way to evolve print?
You have got to separate what consumers want and what advertisers want, because what we’ve seen on the consumer side is pretty strong demand for print magazines. Print advertising had been in decline — well, it’s actually up for us this year. We don’t think that it’s a growth business going forward. We see a large majority of our readers on digital platforms rather than print. It’s not true for all brands, and there are brands that have gone out of print and become digital-only brands that have become frankly more successful as digital-only brands — like Glamour Did, and Allure It is going through the same transition.
How can you balance scale and reach via a platform such as YouTube with the ability to maximize your revenue through your own platforms.
YouTube is still a very important platform because of its reach. We sell all of our ads on YouTube, so we’re able to sell them at a real premium because we have premium content. So our ad rates on YouTube are considerably higher than what YouTube can charge for their ads on YouTube, because the advertisers know it’s in a brand-safe environment. And then I would add into that, social is becoming a really important distribution area for us in video, whether it’s Instagram or TikTok, where we’re building large audiences.
How can you establish yourself on these new platforms and gain market share? And how do you stay on top of it, to make sure that you’re you are relevant? TikTok is a social media giant that has dominated the world in many ways.
We go where audiences expect our brands to be and it’s really clear that TikTok is one of the places that audiences expect to see our brands. And so we’re seeing really, really good success with Vogue and other brands on TikTok, but you can’t just say, this is what works on YouTube, let’s put it on TikTok. It is really a different format than what we produce for our websites or for YouTube, and that’s really critical. You need people to understand these platforms, rather than people who just say ‘I’m going to create content and we’re just going to distribute it on all the platforms,’ because that’s not a successful strategy.
Condé has iconic, established brands. Conde has launched many new brands over the years. [The platform Them launched in 2017]It has also acquired brands. Are you thinking of expansion, whether it’s developing new editorial brands or seeking strategic acquisitions?
There may be brands that we don’t own that we can look at acquiring, but our bar would be very high. Because there aren’t many brands that are at the stature of our brands. We don’t want to just lower our quality level to say, “We can acquire some audience over here.” That doesn’t really fit into our business model. This is why we are very selective about it. Capabilities are another area. When I talk about all the areas where we’re investing, we always are looking at, “OK, should we build or should we buy or partner?” And so there could be areas where we look at acquisitions and helping us build capabilities as part of this flywheel that I’m talking about.
It has been disappointing for tech companies, and people on the TV side are beginning prepare for a harder ad environment. Are you ready for an economic slowdown?
Yeah, we, like most companies, are expecting to see a slowdown, and, to a certain extent, we’re seeing it in some aspects of the business. Fashion and luxury houses are our largest advertisers, and their businesses have been very strong. They don’t see a slowdown. And there are certain markets — like in China, where because of lockdowns, they may have seen a little bit of that, but in general, their businesses are strong, so their advertising business is very strong. So we’re a little bit protected right now in those areas, but in broader-based advertising categories, we’re seeing a bit of slowdown in some of those, and we’re expecting 2023 to be a tougher time. We’re definitely being more cautious in our approach because of that.
Interview edited for clarity and length.
This story was first published in The Hollywood Reporter magazine’s November 16, 1996 issue. Subscribe here.