LONDON, United Kingdom — At the recent FT Business of Luxury Summit in Los Angeles, business leaders from the luxury sector and beyond gathered to discuss the official theme 'The Medium and the Message." But in truth, the official content is inevitably a mixed bag, even if there are always some great nuggets to take away as well.
Some of the best exchanges and learnings happen off-piste. This year I was fortunate to meet Jonathan Newhouse, Chairman of Condé Nast International. Unlike some industry leaders who are standoffish or aloof or totally inaccessible, Jonathan sat down and joined some of us — a group of people he didn't know — for lunch, engaging us in a spontaneous round-table discussion about the future of magazines and the impact of social media.
And who better to chat with about one of BoF's favourite topics? Newhouse publishes more than 100 magazines and operates more than 70 websites in 23 countries outside the US. But more important than the scale of Condé Nast is the power of its magazine brands, which include Vogue, Glamour, Wired, Gentlemen's Quarterly and Vanity Fair.
So how is Condé Nast leveraging these brands in the digital space? The conventional thinking is that all the big magazine companies were caught sleeping during the digital revolution and are now playing a desperate game of catch-up. Jonathan's presentation challenged that notion right from the start, describing the meteoric rise of Paris Vogue under the leadership of Carine Roitfeld and going on to discuss the GQ's successful iPad application and Condé Nast's integrated media business in Taiwan.
There may have been some early strategic errors along the way, but one thing is clear: Condé Nast has its eyes firmly set on the digital space and is forging ahead. Jonathan kindly agreed to share the content of his speech with us here on BoF, a perfect contribution to our ongoing discussion on the future of fashion magazines.
On the media revolution...
It is true that consumer attention is broadly moving toward new media, with consumers spending more time on internet, mobile devices, texting, e-commercing, gaming and social networking. But within this general movement there is tremendous variation. Some established media brands like Vogue continue to thrive and grow. While newspapers are feeling advertising pressure, their readership when combined with their online products is higher than ever. And if you believe network TV is over, how do you explain the success of shows like American Idol?
On who will win: traditional media or new media...
The health of a medium is determined by the strength of the brand and the power of the product to create a meaningful, relevant experience for the user no matter if the medium is old or new. In the new media age, some traditional media and some new media will survive and grow while weaker products will fall by the wayside. The key word is selectivity, determined by the user’s experience with the brand and the product.
On the impact of the iPad...
The most important development affecting magazines will be their delivery on electronic screens, such as Apple’s iPhone and the iPad. An electronically delivered product can take the already rich experience of a magazine and enhance it. Imagine seeing the image of a fashion runway show. Touch it with your finger and the photo comes alive, turning into a video with striding models and music. A magazine glowing with electronic colour, video and sound.
How Conde Nast is capturing this opportunity..
American GQ was the first magazine to place its entire printed product on a mobile device and to charge a price. It is selling 20 thousand copies without any promotional support. GQ is now also for sale on the iPad, as are Vanity Fair and Wired. IPad versions of Vogue and GQ have already appeared in Japan and more electronically delivered magazines are being prepared in the US and in Europe. Experience shows readers will pay for these electronic products, which will count toward paid circulation.
With the ability to buy electronic magazines on mobile devices a whole population of new readers, many of them digital natives, will discover magazines and get hooked. Circulation of iPhone and iPad delivered magazines will parallel sales of these devices, and overall circulation can be expected to increase.
What Condé Nast has learned from its experience in Taiwan...
Condé Nast Taiwan offers offers luxury advertisers a true 360 degree media platform. Vogue and GQ magazines dominate the luxury field. There are five websites, including one devoted purely to video reportage and another to blogs with a total of 330 thousand unique users, which is proportionate in the US to 5 million. Condé Nast has a TV division, Vogue TV, which produces a programme that appears online as well as in public place venues. The Vogue TV programme is also aired on cable TV on the mainland. Vogue and GQ content is accessible through mobile phone, an iPhone app, a digital shopping mall, and Conde Nast is in the process of adapting GQ entirely to iPhone. There is also a public relations arm and a contract publishing division, capable of producing a branded magazine or organizing a glamorous event. Truly a one stop media venue.
On luxury, social media, and democratisation...
Historically exclusivity has been an important value, even a defining value, for luxury. The Luxury Lab says exclusivity is now “debatable”. Really....does the rise of new media mean that the underlying principles of the luxury business no longer apply? What happens to a luxury brand that forgoes exclusivity in favour of availability to the broad masses? In the short run, brand awareness will increase and so will sales, especially of lower priced merchandise. But what will happen in the long run? What will happen to the image and prestige of a brand when it is no longer exclusive? Will not broader availability impact its capacity to charge high prices and command a high profit margin? These are questions which the luxury industry has yet to squarely confront.
On the role of the media in the luxury industry
The role of the media is to be the dream weaver, to animate [luxury] products and to make them desirable. We in the media employ creativity and taste, imagery and words, and a trusted relationship with readers – your customers – to drive your business. The authority and credibility of the established media give it a unique power to support your brands as a full partner. Why, some of our editors actually personify the industry as living icons who contribute to the environment which nourishes your values. The role of media brands like Vogue goes beyond technology or whether the message is delivered on paper or online.
On the role of traditional media in the context of the rise of social media, including blogs
The rise of new media has brought about a seemingly infinite array of choices – literally tens of thousands of websites, blogs, twitter feeds, online retailers, network algorithm-placed advertising along with powerful traditional media like magazines and TV. It’s an exciting, vibrant universe full of new possibilities and connections.
Amidst this fantastic cornucopia of choices, the authority and credibility of established, trusted luxury brands like Vogue count more than ever. Magazines like Vogue have always played a fundamental role in building the luxury business by conveying the prestige, excellence, exclusivity and desirability of your products and brands. We do so in print magazines and today extend our know-how and marketing skill to the internet and mobile devices like the iPad. The media is changing with technology, but the dream of luxury remains something magic and timeless.
Taken from a speech by the chairman of Condé Nast International at the FT Business of Luxury Conference in Los Angeles.