Q&A: Why now was the time to flip the digital switch at Rogers Media
SVP of digital content and publishing Steve Maich gives the story behind Friday's industry-shaking announcement.
Slowly transitioning to digital for years, Rogers Media publicly announced a massive business flip on Friday for its publishing division. Flare, Sportsnet, MoneySense and Canadian Business will all go digital-only, Maclean’s, Chatelaine and Today’s Parent will scale back printing, while Rogers is hoping to sell its French and B2B titles .
Steve Maich, SVP of digital content and publishing, Rogers Media, told MiC the decision is one that has been brewing for years as print ad revenues, subscriptions and newsstand sales have been falling and digital revenues, bolstered in part by its Texture online service, have been growing.
Why was now the right time to make such a big shift in the way Rogers Media approaches publishing?
This is a journey that we have been on for several years now. We recognize our audiences are shifting away from our print platforms gradually, and that was putting increasing pressure on advertising. We said we would keep publishing print as long as the economics made sense and there was a critical mass of people that wanted to receive content that way so we could effectively monetize that audience through advertising. We also realized that our big, longer term opportunity here was on the business that’s growing – the digital business. And the big question for us was when do you jump from one elevator to the next?
If you wait too long you miss the opportunity, and if you go too early then it won’t work. Based on the trends that we have seen over the past 18 months in print advertising, we made the decision that now is the right time to make that leap.
We have seen enormous growth on our digital platforms over the past couple years. And that is increasingly translating into real substantial revenue and margin growth for our business. And when we look ahead and look at how our customers are consuming our content, we want to take a leap and we want to win. We think we are making an investment today that puts us in the best position for that.
How much has print revenue dropped to date this year?
This year we are tracking for a year-over-year drop of 30% in print advertising revenue. That’s on top of a decline last year that wasn’t quite as large, but was still substantial. Given the economics of print diminishing on us, and the growth we have seen on the digital side, we felt like now was the right time.
How much has digital revenue grown?
When you look at total digital revenue we are tracking the second consecutive year of north of 20% revenue growth. Our audience growth is even more of that. So we are looking for more efficient ways to transfer that audience growth into revenue growth. Put another way, we want to monetize the growth of our audiences effectively as we grow.
How is Rogers accounting for the gap in ad revenue that’s always existed between print and digital?
It doesn’t match yet. One of the ways we are making up for it is just evaluating our business honestly on a brand-by-brand and platform-by-platform basis. We don’t feel like our goal, at least in the short term, is to take all the money that is leaving print and then jam it directly into the digital business. That probably isn’t realistic in the short term. You can say, here look at the business that is growing and offers all kinds of new revenue lines that were previously unavailable even a few years ago. Do you want to continue to focus your energy and marketing shoring up the print business that is breaking down on you? Or do you want to focus on shoring up the business that’s growing. And we want to focus on the second option.
How much has Texture factored into digital growth?
Texture has been a big part of our evolution. The revenue that we get from Texture today is greater than the revenue that we get from all our magazines on newsstands combined. We have a large and highly engaged audience that continues to grow. We’re going to turn a profit on Texture this year.
We have approximately 100,000 paid users on Texture today, and it’s growing all the time.
Any news on who is buying the B2B titles?
We are in the process of negotiating and will make announcements when we have deals.
They are still revenue generators and still profit generators, but we had to make a decision about the titles that would fit best with this digital evolution. We are ambitious for this digital business to go beyond our publishing titles. We want to organize ourselves in a way that we can continue to grow digitally across radio, sports, etc. So we had to look and see where we thought we had the greatest opportunity to win. We felt our English-language consumer titles had the best bang for our buck.
How many jobs will be impacted by the changes to Rogers Media’s publishing business?
I don’t have a number on that. This change isn’t about shrinking the overall size of our business. It will shrink as a result of the sales that we have discussed. There will be some job losses for positions that are overwhelmingly focused on print. But by and large our focus remains on content.
I think what you will see from all of our brands is more content than what you have seen previously.