The following article has been edited and contains minor corrections from the original release in the Heard on the Web newsletter dated 5-31-2020
Scott Mortimer of Meredith Corp. joined Joe Berger, Bo Sacks, Samir Husni, Sherin Pierce, Gemma Peckham, and me for this week’s Publishing Pandemic Roundtable. BY LINDA RUTH
In the course of the current fiscal year (July through June), Meredith will have published 320 titles. These include a mix of one-off titles under major brands and also several with publishing partners, including, for example Chip and Joanna Gaines at Magnolia Journal.
In a down market, Meredith continues to put out new SIPs. How is this model working?
Scott: Coming into 2020 we were doing very well, on track, in fact, to increase 4-5% over prior year. The pandemic changed that, for us as it has for many; but in the last three weeks we find that sales are approaching pre-covid numbers.
Samir: I recently saw that Meredith is offering subscriptions to a series of SIPs, wherein you sign up for the series without actually knowing what topics will be covered. Is this a new initiative?
Scott: Yes, we’re testing it to see how it goes. LIFE had its best bookazine year ever in 2019, so we’ve been aggressive in putting out product under that brand. And you’re right, our subscribers won’t be able to choose the topics, they have to take what comes. We know the LIFE brand has tremendous equity and history, so we’re testing the idea, and will see how it goes.
Bo: brilliant idea.
Linda: A goodie box or grab bag.
Joe: where do you see your sales ticking up?
Scott: Primarily supermarkets, pharmacy, and big box. We have more pockets at checkout than we’ve ever had. Now it’s our job to put great products in those pockets; then we need the people to go past them. This is where we’re finding cause for optimism; in the last 3 weeks our past SIM buyers store visits were up 8% over the prior.
Gemma: What are you doing to support your customers now?
Scott: We wanted to focus on content that would support people at home—health and wellness, food, home, a PEOPLE Puzzler, all of these are in the sweet spot of what we do. We tried to be nimble and adjust. But we’re seeing gains across the portfolio.
Samir: you said your customers vote with their pocketbook, and overall we’re seeing magazine prices moving up. Do you see a cap on this, or is this the future model?
Scott: You’re right about that. At Meredith, most of our special interest content is $10 or higher. I do think as an industry we can charge more for our content, although we have to provide the value to support the prices. We’ll see if the current trends of unemployment slow it down at all. I’m sure there’s a cap but we haven’t seemed to hit it. Even very recently, our Kobe Bryant tribute specials did great at $14.99.
Sherin: Although you could argue that Kobe Bryant isn’t representative of the majority of specials. People love dead celebrities. In the current economy people are struggling. One of the first things they are likely to cut spending on is magazines. Have you adjusted your schedule in response to this?
Scott: I think you’re right, it may be a slow slog. As incomes become more tight that impulse buy might go by the wayside. Time will tell.
Sherin: Also people tend to hold back on spending due to uncertainty in an election year.
Scott: Over the last 3 weeks we’ve done a lot of scenario planning, and we’ll continue to work on scenarios based on what actually happens. If levels of sale are soft, we might not put as many releases out. Every issue goes through P/L and if it doesn’t work we won’t put it out.
Bo: It’s important to acknowledge that there are tiers of readership: the Bauer tier with its pricing and sales levels, along with other tiers with other levels of sale for higher-priced product. When we transform the perspective of the public that these are luxury items we’ll be better off.
Samir: Just recently in one of our sessions, Krifka of Barnes and Noble said they do treat this category as a luxury.
Scott: We’re fortunate to have content leaders with their fingers on the pulse of what people want.
Joe: Even as we transition to higher-priced, higher-value magazines, the underlying distribution framework isn’t set up for healthy or a luxury product. How do we let the public know that we have product for them at higher prices?
Scott: Agreed, we’re only as healthy as the channel. Discovery is the biggest challenge. A store might have 15 checkout lanes, of which six might be open, and your product might not be in every lane. How can we be sure people get to see it? Digital outreach is one way of driving awareness, and sending people to the store. At Meredith we have a database we can mine for good. Our partners are great at getting the word out, too.
Joe: What do you see happening to our distribution channel?
Scott: There are certainly lots of headwinds there. We’re doing everything we can to support it and be a part of it.. We hope it remains healthy and vibrant. We’ve been around since 1902, and whatever happens, we’ll find a way.
Samir: you have the largest number of pockets in the country. Do you foresee a day when there won’t be enough product for pockets?
Scott: We optimize our pockets with great content.
Joe: It’s a balancing act, since the availability of pockets also is at mercy of what the retailer decides to do. We’re down to one ND, essentially one wholesaler. Do you do your own marketing?
Scott: Yes, we have salespeople calling on the big retailers. We want to have a say in our own destiny. This year we’ve clawed back some display, but you do lose as well—for example, Costco is now exiting the category.
Samir: TIME’s Mindfulness issue was the strongest of all time. What are your top selling categories?
Scott: Health and wellness are still strong, and yes, TIME’s Mindfulness SIP is great. Pop culture is good, and food, though there’s a ton of competition.TV shows are not so great, movies are a hit or miss.
Scott: That’s a tough category to get traction. Plant-based diets do well.
Samir: CBD? Cannabis?
Scott: A year ago, I’d have said they were going great guns. We’ve gotten away from them. Retailers are showing some sensitivity. Last 6-9 months have not been so great for those titles.
Samir: I think this pandemic will give print a shot in the arm, people will rediscover print. NY Times, USA Today with some of their recent front pages—no one can do it like print.
Scott: Yes, in the last eight weeks we’ve touched a lot of people that might have drifted away from us.
Sherin: are you working on getting on the drop down menus for curbside pickup?
Scott: This is an area we’re interested in and we’re having constructive conversations about this with our partners. I wonder with the ability and current incentive to buy online, if shopping habits will change. Three weeks of data indicates not. But it’s still early. We’ll see.