Keynote Speech for FIPP Conference Richard M. - - PDF document

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Keynote Speech for FIPP Conference—

Richard M. Smith--Chairman/Editor-in-Chief Newsweek Magazine

Seoul, Korea April 2002 Thank you. I am tempted to recall what President Abraham Lincoln said after receiving a similarly generous introduction: “Don’t take the time to deny it. The audience will soon learn the truth for themselves.” Seriously, it’s a great pleasure to be with you this morning and see the faces of so many dear friends and good colleagues from all around the world. And it’s a special honor to lead off what promises to be an exciting and informative meeting in a country that has played such an important part in my own history. I first came to Seoul in 1975, when I was based in Hong Kong. I met a fascinating Korean

• American professor on that visit. She was an anthropologist teaching at Ewha Women’s

University just across town, and I took her to dinner to talk about the changing role of women in Korean society. The dinner went on my Newsweek expense account and, in a way, she’s been there ever since...because she’s been my wife for the last 24 years.

2 We’ve also extended our ties to Korea into the second generation. Thirteen years ago, we adopted a beautiful little Korean girl who has become the light of our lives. So you see, my roots here are deep and everlasting. As I thought about my talk this morning, I wanted to boil the message down into a few essential

• truths. The exercise made me think of one of the last interviews the great hotel magnate Conrad

Hilton gave. The reporter went on and on about all the places Hilton had traveled and all the important people he’d met. Finally, he got to the question: “Mr. Hilton, after such a rich, full life, what is the single most important thing you’ve learned? Please, sir, share this wisdom with us.” The great hotel man thought for a moment...and said: “The shower curtain...INSIDE the tub. Put it INSIDE the tub.” Well, I can’t promise wisdom that deep, but I can deliver a message that flows every bit as much from my own personal and professional experience. That is: I believe in the power of magazines...and I believe in the future of magazines in Asia. Newsweek has, of course, been an active in the region for well over half a century--thanks to our English-language International edition. In the mid 1980s we shed the uniform of the visiting team and became a full-fledged player in the local market. That was the year when we entered into an

3 agreement with TBS-Britannica, a publishing subsidiary of the Suntory distilling company, to launch Newsweek Nihon Ban, a Japanese-language version of Newsweek designed specifically for the Japanese audience. We were largely flying blind. Nihon Ban was the first Newsweek published in another language, and it took nearly two years--and a lot of arguments over translation style, staffing, local content and seemingly everything else--to get into print. When the great day finally came, we held a huge launch party at Tokyo’s Okura Hotel. The Japanese Prime Minister was there. President Ronald Reagan delivered a televised message of congratulations. Mrs. Katharine Graham, the late chairman of Newsweek’s parent, the Washington Post Company, spoke... as did the American ambassador and Keizo Saji, the late chairman of Suntory. It was a remarkable East-West moment, and to wrap up the festivities, Chairman Saji stepped to the microphone and burst into song...a rousing rendition of the theme from the wild west television show “Rawhide.” When the distinguished chairman took off his shoes and slapped them together to make the sound of a cracking whip, I knew we were embarking on quite an adventure. We were not at all certain whether Japanese readers--with their huge national newspapers and a variety of lively domestic magazines--would want to read a foreign newsmagazine in translation. Well, happily for us and our very hardworking partners at TBS-B, they did. Newsweek Nihon

4 Ban was a success almost from the start. And today, it remains a bright niche in the Japanese magazine world, with a healthy 130,000 circulation. Our next step into the Asian market grew out of a phone call from Young-Hie Kim, a superb Korean journalist with JoonAng Ilbo--one of Korea’s leading newspaper and magazine

• companies. Young Hie was calling on behalf of Chairman Kun Hee Lee of Samsung, then the

parent company of the JoongAng group. And he wanted to know whether we would be interested in Newsweek Hankuk Pan, a Korean-language version. We jumped at the chance. Hankuk Pan hit the newsstands in 1991 and it, too became a success story. Over the years, I’ve had the great pleasure of forging a strong friendship with JoonAng Ilbo’s thoughtful and dynamic chairman Dr. Seok Hyun Hong, and all of us at Newsweek have enjoyed--and learned from--our relationship with his fine company. From that strong Asian base, we went on to establish other non

• English partnerships and

editions...with Ideas & Capital for Newsweek en Espanol, the Kuwait-based Dar al Wataan group for Newsweek in Arabic, and just last year, with the Axel Springer group to produce Newsweek in Polish. Newsweek Polska has really been a remarkable story. Within two months

• f its debut last September, the Polish press was hailing the magazine as the number one

5 newsweekly in Poland. Averaging sales of about 300,000 copies each week, Newsweek Polska is now regularly beating the two long-established competing weeklies by a comfortable margin. But we never forgot about the Asia-Pacific region and its enormous potential. In addition to a longstanding content-sharing relationship with the Bulletin in Australia, we recently joined with our good friends at YBM-Si-sa here in Seoul to introduce Newsweek 21, an English-language learning magazine. In China, working with Sino-World Publications, we are rolling out a series of special-topic editions--translated into both simplified and traditional characters--for distribution not only on the mainland but in Hong Kong, Taiwan and Singapore as well. And finally...well, I hope not finally...we are right now working on a similar series of single-topic editions to be published, beginning this summer, in Bahasa, the language of Indonesia. We have had the privilege of delivering--and sometimes teaching--our style of fair-minded, independent and aggressive journalism in some markets where the traditions have been far

• different. But in each case, I would have to say that we have learned every bit as much as we’ve
• taught. Above all, the chance to get even closer to other cultures and to work side-by-side with

talented local journalists has helped inform all of Newsweek’s coverage in all of our editions, both domestic and international.

6 The exercise has also proved to be a great reminder of the strength of our brand --and of the importance of choosing partners who share our commitment to the highest standards of journalistic excellence and independence...and business and personal integrity. I must say our only disappointment has been our brief, two-year effort at producing a Russian

• language magazine.

And the failure there was not with our partners, but because of a politically-motivated change of

• wnership.

Our efforts in Asia have only reaffirmed my enthusiasm for this market and the prospects of ALL magazines...both homegrown and imported...in the region. Some of the reasons are specific to

• Asia. While there are obvious variations from country to country, the tides of demographic

change, economic growth and increasing educational opportunities are all fueling the expansion of a well-educated middle class--in other words, a burgeoning audience of precisely the kinds of readers who contribute to the circulation strength of magazines all around the world. Still, a large part of my optimism comes from that belief in the power of magazines--in any language, in any culture. On one level, of course, there’s the power of magazines as a hugely successful commercial machine...a mechanism with the ability to aggregate an attractive, attentive, paying audience...to deliver to them compelling, informative advertising messages and to spur that audience into action in the marketplace of products, services, and even ideas and public policy.

7 Let’s consider some facts about the market I know best, the United States. Despite a staggering proliferation of media outlets, Americans continue to buy magazines more than ever before--in fact at a rate of growth substantially higher than the growth of the overall population. Four out of five American households subscribe to magazines or purchase them on the newsstand. And each household buys an average of six different titles annually. How attractive is that audience? Advertisers vote with their dollars. In the last decade, advertising revenues have more than doubled--from a little less than $7 billion to nearly $18 billion annually. And, again, in the face of the growth of the Internet, cable television programming and other

• utlets, magazines have held their share of overall media spending at a roughly constant level.

But numbers only tell part of the story. There is an even greater power in magazines: The power to enliven, enlighten and engage their readers in a way that almost no other commercial medium can. Indeed, it’s the kind of power that turns magazines into a vital and dynamic force in our societies...sometimes shaping, sometimes interpreting, always reflecting what is going on around us. Of course, magazines also make history. As Dick Stolley, the founding editor of People magazine, has pointed out, try to imagine the great social revolutions of the last half-century without the role played by magazines in either igniting them or fueling them.

8 Take the environmental movement, for example. The first great call to arms for the movement--the book “The Silent Spring” by Rachel Carson--first appeared as a magazine article in the New

• Yorker. Soon many other magazines, in many countries, took up the cause--from the

newsmagazines, to the science books to the sports and outdoor titles. Today, some of the most powerful journalistic work in the environmental area these days is being done by those magazines that used to focus only on how to catch the biggest fish or what rifle to use to bag the biggest

• trophy. That’s quite a turnabout, but one very much in keeping with one of the magazine world’s

greatest strength--editors who listen to the concerns of their readers and respond with enough skill and flexibility to become leaders on those very same issues. Or take the American civil rights revolution and recall the powerful pictures of protest and repression in Life and Look, the cover stories in Newsweek that prodded the conscience of our readers--some that sound so quaint these days, like “The Negro in America: What Must Be

• Done. Or the stirring opinion pieces in scores of journals that shaped a policy agenda.

Then, of course, there’s the women’s movement. It was a magazine called Ms. in the States that gave feminism its voice in the crusade for equal rights, equal pay for equal work and equal

• pportunity in all its forms. It’s fair to say that many of the traditional women’s magazines weren’t
• n the frontlines...in the U.S. and beyond. But as the movement grew, women’s books around the

9 world played an absolutely critical role: educating women, encouraging women and helping women adjust to challenges of emancipation and their sometimes exhausting roles as mothers, lovers, workers, managers, caregivers, leaders and so on. Can you imagine many women’s magazines today that don’t deal repeatedly and directly with the consequences of the women’s movement? I can’t--and today, the women’s books ARE in the leadership on social, political and economic issues of importance to women. But there are revolutions--and there are revolutions. Life isn’t all about political and social change. Life is, after all, sometimes just about living. Like living with machines that are smarter than we are. Clearly, when the history of the last two decades is written, technological change will have more than its share of headlines. Magazines dominate those stories, too. In country after country, who introduced readers to the computer revolution...rated the performance of new equipment...created communities of users to help with problem-solving...and then went on to do the same for generations of software and now the Internet? Magazines, that’s who.

10 Where do car buffs turn for the latest information on their beloved vehicles? Or investors for help in finding the most informative, best-packaged, most-tailored advice on personal finance? You guessed it...magazines. And let’s not forget just plain fun. Do newspapers and television define fashion with a capital F? No, it’s Vogue and Elle and many, many more. And what about the purest form of fun--celebrity- watching? While television has certainly played catch up in this area, the entertainment books, the women’s titles and even the newsweeklies still are the name of the game in keeping up with the lives of the rich, the famous, and especially, the infamous. Given the targetted audiences and the tailored subject matter, it’s no surprise that when researchers ask Americans to rank the major media on the basis of “which contribute the most to personal knowledge...and supply the most useable ideas”, magazines come out on top--in everything from Food to Grooming, from Health and Fitness to Travel, from Computers and Clothing to Financial Planning. With all those strengths going for them, you might think that making money in magazines is easy anywhere--and should be a cinch in a growing market like Asia. Just tap into an audience niche,

11 develop the right marketing strategy, ride the demographic and economic tides...and smile happily all the way to the bank. Alas, it’s not that easy. The marketplace in the U.S. and elsewhere around the world is littered with the rusting hulks of magazines that seemed to have “can’t miss” written all over them. What went wrong? The answer lies in a failure to understand the sometimes mysterious but always essential ingredient in a successful magazine. If the watchword in real estate is “location, location, location,” the key element in magazines is “editorial quality..editorial quality..editorial quality.” Why are magazines special? In large measure, it’s the result of an editor’s clear vision of the magazine’s editorial mission and an equally clear understanding of its audience. It’s because editors have created an engaging environment in which readers can happily spend time--knowing that they are among stimulating friends who share their interests and confident that those friends will, every week or every month, provide enough useful or entertaining information to more than justify the price of a subscription. I like to think of the editor as holding and exercising a proxy on behalf of their busy readers. In the case of Newsweek, that means sorting and sifting through the week’s news and making tough judgment calls on what’s important, what’s not ....what will be engaging, provocative and

12 entertaining...and what will have significance in the weeks ahead. If we make intelligent calls, the readers stay with us. If not, they move on down the line. It works that way at all magazines. Instinctively, the readers understand the relationship with the editors--and the trust that is at its core. Trust is indeed the key to success. The reader doesn’t give his proxy easily, but once he has, the power of the relationship is extraordinary. Think of magazines as the ultimate packaged good. Only in our case, we break all the rules of the

• game. Suppose we were a soft drink. What would we say to our customers each week or each

month? “Well, this issue, I mean..bottle...may be sweet, the next one might be a little sour. We’re going to keep changing how fizzy it is, too. In any case, we’ll keep changing the ingredients right up to the last minute, but don’t worry, it will make you feel good or at least be good for you. And

• h, by the way, we’re going to keep changing the packaging each time...we really wouldn’t want

to make two in a row that look alike.” Yes, the magazine business is a packaged-good marketer’s worst nightmare. In essence, what we’re saying to the reader is just: “Trust us. You’ll like it. You know our logo. You know our

• brand. And that’s all we’re going to give you to go on as you make your purchasing decision.

13 And amazingly, it’s enough. Such is the power of a successful magazine, of the intimate bond between readers and great editors, that “trust us” is enough. It even rubs off on the advertising that surrounds the edit. Readers report that they find the ads informative, too--and an important part of the total package. When was the last time you heard someone say that they looked forward to commercials on television? Not very often. It’s that kind of trust that provides our best insulation from the digital revolution that some pundits think is our greatest threat. There’s no doubt that Internet-providers are offering people a host of new ways to consume information and entertainment. But no medium beats magazines for consumer-convenience, for portability or easy browsing. And while online works great for snippets of information and archival searches, it faces a major challenge in delivering anything subtle, complex or reflective on computer screens...in other words, the things that magazines do best. Don’t get me wrong, the new media world will ultimately reap handsome profits. But I think we are already seeing signs that our industry has a critical advantage in that quest for profitabi lity. Indeed, if anyone is positioned to eventually stand out in the blizzard of electrons, it should be the editors and publishers who have already learned to gather, package and present information...clearly, efficiently, attractively and with credibility...and who have established brands that convey quality and trust to millions of consumers.

14 Again, it all comes back to editorial quality. You can have the best marketing plan, the best new business strategy, the best target audience and even throw the best, most-lavish launch party in the

• world. But without a powerful editorial vision and the editors to deliver on it, your magazine will
• fail. So nurture your editorial staffs. Invest in editorial. Insulate your editors from outside

interference--whether it comes from advertisers or governments or even from your friends. And give those editors the freedom to serve your readers and establish that all-important relationship of trust with your audiences. If you don’t want to take my word for it, listen to the advice from a long-time Newsweek colleague--Harold Shain, a former circulation director and now the magazine’s President and Chief Operating Officer. Way back when my life was lived solely on the editorial side, I took Harold to lunch and asked him about the mysterious ways of circulation. He talked confidently about his ability to price and mail and pitch for new subscribers. And then he looked me straight in the eyes and said: “But just remember this, Mr. Editor, you...and only you...are in charge of

• renewals. If a reader has tried the magazine for a year and doesn’t like it, I don’t have any tricks

that will bring him back.” Of course, his advice was absolutely right. And I’ve followed it ever since. For the next two days, as you ponder the perils and opportunities posed by new technologies, as you study the dazzling

15 possibilities in the Asia-Pacific region and weigh new cross-border initiatives, you might want to keep that simple truth in mind. It all starts with the reader. And if you and your magazines are working every day and in every way to meet the needs of your readers, it can be the beginning of a beautiful relationship--and a very successful business.