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Although small publishers must display the same brand heft as their big brothers, they need disproportionate financial strength and marketing agility to swim up the revenue stream.

"They've got bigger names and a whole lot more money," says Worth Media Chairman-CEO W. Randall Jones, who recalls that when Worth was launched in 1992, his competition included Hearst Corp. and Dow Jones teaming up to produce SmartMoney.

In such instances, smaller publishers need to have sharply differentiated products and "a strong entrepreneurial culture that allows you to move faster," he says. "Hopefully, that will outweigh the money."


In other words, it's all about a niche. Meigher Communications' Saveur, for example, casts itself as a high-end alternative to mass-market titles like Bon Appetit.

Mr. Jones and S. Christopher Meigher III, president-CEO of Meigher Communications, head separate publishing ventures that compete with the giants. Both spent time among the big publishers. Mr. Meigher was president of Time Inc., while Mr. Jones was publisher of Esquire at Hearst after that company purchased Esquire in the '80s.

Their experiences taught them the competitive challenges in an increasingly consolidated magazine world.

"The question of scale is always there," says Mr. Meigher, whose company launched Garden Design and Saveur in 1994. "Can you offer enough reach across enough properties" to advertisers and "make it worth their while to do a one-stop shop. That's something the big guys have to their advantage -- it's one of the hardest things to compete against."

Publishers who find a strong niche to fill can make that work to their advantage.

"A good example there is Mode," says Reed Phillips, managing partner of media investment banker DeSilva & Phillips, referring to the fashion title for plus-sized women. "No one was in that niche. Along came a couple of entrepreneurs, and they have carved out a really substantial niche."


The key to advertisers, says Mr. Meigher, is the group of readers who develop a closer relationship with a niche title.

"You have to sell involvement of the reader . . . [that] will transfer to [an advertiser's] brand," he says.

One publishing executive questions whether or not reader involvement goes far enough in today's media landscape.

"We're no longer just in the business of selling individual pages," says Dan Brewster, president-CEO of the Time Inc.-backed American Express Publishing. "We're in the business of putting together integrated marketing campaigns that include access to database resources, access to other media, new media development, and cross-promotional programs. For people who limit their media business exclusively to publishing, it's gotten tougher."


Mr. Jones dismisses the notion that smaller operators can't promote. He cites Worth's celebration of the 25 smartest Wall Street players which, he says, drew 700 people to the Saks Fifth Avenue store in Manhattan where the event took place.

"You have to be very clever in how you do it," Mr. Jones says, "and make every event and every promotion count."

Worth recently announced a new venture with Dawntreader LP, an Internet venture fund, to create

Roberta Garfinkle, senior VP-director of print media for McCann-Erickson Worldwide, New York, echoes his take on how smaller groups can compete when it comes to promotions and advertising.

"It may cost you a little bit more, but it's very often worth it," she says, citing "incredible promotions" done by Miller Publishing's Spin/Vibe/Blaze axis. "Maybe the promotion's not as big, but it's more interesting and more on target."

But even in the best of circumstances -- like today's economy -- today's smaller publisher faces pressures that only a generation ago his peers may never have imagined.

"Small or large, the tough spot for magazines is circulation," says Wilma Jordan, CEO of media investment bankers Jordan, Edmiston Group. "The fall-off with Publisher's Clearing House and American Family Publishers has been a challenge, that's for sure."

With typically more extensive databases in-house among several different titles, she adds, the big guys gain an edge in ferreting out new subscriptions.

"We don't use sweepstakes stampsheets," says Mr. Meigher. "But it's hurt a lot of publishers, and would hurt smaller publishers disproportionately. Where do you make up those subs?"

Steeper capital requirements often lead small publishers to the venture capital community.

Often the venture capitalists have a specific set of expectations.


Case in point: Miller's announcement on Oct. 4 it's hiring Salomon Smith Barney to explore sale options for Vibe/Spin Ventures, its music titles unit. Venture capital partner Freeman Spogli & Co. pushed for a sale to recoup its investment.

"When you bring in an investor you have an obligation to make that investor happy. Fortunately, we have been able to do that," Miller President-CEO Robert Miller says.

Mr. Meigher points out that magazines don't turn a profit as quickly as any venture capitalist would like.

"They're more capital-intensive upfront -- you have to build the circulation -- usually at some cost," says Mr. Meigher. "It's true. You have got to be very clever in every nickel and dime you spend."

The venture capitalist "can't conceive of waiting five years and more to see something profitable. By that time, they want to have made it profitable and sold it," says Jack Berkowitz, VP-strategic planning at American Lawyer Media. "And the world has made that even worse."

"In general, venture capitalists have high hurdle rates and are fairly rigid in their expectations for return on investments," says Mr. Brewster. "That's obviously different from a family-held or independently held or privately held partnership."


Mr. Jones shuns venture capital bashing -- saying that he's unaware of any investing in the print side of publishing properties anyway -- and makes the whole situation sound deceptively simple.

"The expectations are that you will be profitable, and that you will create strong brands which can be leveraged in numerous ways . . . including the Internet world, which is certainly our strategy."

Small or big at the end of the day a publishing company has the same obligations.

"It's all about satisfying readers, advertisers and investors [but Time Inc.'s] Don Logan and [Hearst's] Cathy Black have the same problem. We all have the same problem," says Mr. Miller.

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