The Mr. Magazine™ interview: Behind Bonnier’s secret for creating better quality content with less workforce
When you talk about legacy media, one name that cannot be left out is the Swedish-born Bonnier Corporation. For over 200 years, Bonnier has been in the publishing business in one facet or another. The United States presence of this heritage company formed in 2007 when the American office opened for business. Today, its brands range from Field & Stream to the award-winning Popular Science, with many, many more in between.
And the man heading up this heritage company and all of its robust titles is CEO, Eric Zinczenko. Eric has been successfully progressing the journey and holding the ship steady-as-she-goes since 2015. Before taking on the CEO leadership role, he served as executive vice president of the company, coming from Time Inc. in 2007 as a part of Bonnier’s original management team.
With Eric’s guidance and vision, Bonnier has seen record financial growth and its strongest operating margins. Under his leadership, the company has broadened its capabilities outside traditional media by diversifying into new revenue-growth areas in licensing, agency services, content syndication, digital and events.
I spoke with Eric recently and we talked about his vision for the company and his successes so far. From the record financial growth to the new revenue streams (all of which he has done with a 36 per cent decrease in workforce since taking on the role of CEO in 2015), it would appear that legacy media companies can do more with less. Eric credits a lot of the company’s success and his own ability to visualise those strategies for improvement to Bonnier’s ownership, saying that for a media family who has seen everything from wars to disruption in the over 200 years they’ve been in the business, they’re not easily moved. Being patient and not panicking and keeping the lines of communication open only enhances the company’s success.
So, I hope that you enjoy this conversation with a man who “subscribes to the ethic of constant improvement” in all he does and revels in the “privilege of leading (Bonnier) and his colleagues through incredible and complex times” – the Mr. Magazine™ interview with Eric Zinczenko, CEO, Bonnier Corporation.
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But first the sound-bites:
On whether he thinks this is the best of times, the worst of times, or somewhere in between for magazine media: I think it’s somewhere in between. For companies that are evolving, in challenging their orthodoxies of the way legacy media companies have operated, for the companies that are evolving, those are companies that are seeing opportunity in front of them. And I think maybe companies that are more stuck in the way that we’ve done things for decades, I think it could end up being the worst of times for them. I do feel that the only thing predictable is that disruption is going to continue.
On what his life has been like for the last three years as CEO of Bonnier US: I think I’d start with something you mentioned, and it’s a quote that I think of often: today will be the slowest rate of change that we’ll experience in our lifetime. From this point on, disruption, technology, and media consumption habits will only be changing and accelerating. And I believe that has had a profound effect. So to your point, I have 25 years in the media business, 12 of those at Bonnier; I’ve worked for all of the major publishing companies, I’ve had time at Time Inc., I’ve had time at Condé Nast, I’ve had time at Rodale, and then the last three years as CEO. And what I’m still adjusting to is how complex these businesses are and how complex these times are, so coming to the office every day, and I said this in a past presentation, it feels like every day Jenga, where our businesses are constantly under pressure.
On moving their CMS system to Arc: We moved to a new platform with our digital and that platform is Arc, which is owned by the Washington Post. We moved to Arc because here at Bonnier we’ve spent the last five years trying to move everyone to a proprietary CMS system that we had. And that CMS system was called Sandcastle. So, we made a decision based on economic factors, based on how we wanted to operate, and the CMS of Arc would be stronger than our own proprietary CMS, so it would have more of a suite of opportunities for us from a digital perspective. So, that was seen as not only an efficiency measure, but actually an opportunity.
On whether he sees a value in print in today’s digital age: I do. The notion that print is dead is not accurate. I think print isn’t dead, it’s just different. Gone are the times where you can operate with an inflated rate base or 12 times per year as a standard. And I think gone are the days too where you were just concerned with whether there was enough fax paper in the machine where you got all of your signed insertion orders back. Those days are behind us. But print for many companies, Bonnier included, is still profitable. It’s just not at the margins that we once enjoyed. And I feel strongly that brands that sit one or two in a category or vertical can thrive if managed correctly.
On whether he feels paywalls, such as Wired has implemented, and other forms of payment for digital will be an accelerated trend: I hope it’s an accelerated trend, but I do feel firmly it will be a trend. I think the newspaper industry has done a pretty inspirational job of getting people to pay for their content, and I think the magazine industry has lagged behind the newspaper industry. But I really do believe there’s opportunity there. You mentioned Wired and I think they’re an inspiration too. So, this is something that we’re absolutely taking interest in at Bonnier and we’ve talked to some consultants that can help us unlock the potential there.
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On whether 2016, since he said it was one of the best years of his career, was a walk in a rose garden for him, or there were challenges along the way: It wasn’t a walk in a garden, I don’t think. (Laughs) You know it’s funny, I say today, there are no gifts in our industry. There are no gifts. So, everything that you do is earned today. And 2016 was difficult. I think the biggest challenges for that year were to get people to believe. At the time, when we talked about diversifying and shifting away from our sole reliance on print and digital media, I think that raised some eyebrows. But here we are a few years later and the strategy is taking hold.
On the positives and negatives of a company like Bonnier that has a presence on both sides of the Atlantic: Well first, the positive is we’re lucky to have wonderful ownership. We’re a 200-year-old media company with a media family that has seen it all. They’ve seen disruption; they’ve seen wars and more, therefore they have a very patient, respectful, Scandinavian perspective on everything. So, the pressure is absolutely there to deliver on what you promise, if you say it, it better happen, but they also understand market factors, and they never panic. I mentioned that I am preparing for a board meeting now and I can tell you that my presentations look different today than when I started, where there was just numbers and here’s the strategy.
On the magic wand he uses to do more and better with less workforce: I will not speak for any other company, but I think the experience here is that we had areas of improvement where we could have been more financially disciplined. And the magic wand has been to maximise shareholder value and do it in a smart way. And I think when you make changes like the changes we have made since 2015, it’s very important to communicate those changes and explain why we’re changing and how we’re going to change. Communication is a big factor.
On what he would have tattooed upon his brain that would be there forever and no one could ever forget about him: He subscribed to the ethic of constant improvement in all he did.
On what someone would find him doing if they showed up unexpectedly one evening at his home: Reconnecting with my family and hearing of my kids’ day is the quickest way for me to separate from my work. If work stress is near a high and requires more, I’m a wine enthusiast so I will settle with a great glass of wine and break out my bass guitars and play some music.
On what keeps him up at night: I know most answers from CEO’s are funny. (Laughs) They say they don’t worry and sleep just fine, but truth be told, sleep is difficult for me sometimes. My mind races for what’s next to be done; what could we be doing different; is there enough urgency in our approach; am I giving enough to the office and to my family. The good news is I care about my personal fitness and health to make sure I get a pretty exhaustive workout every day, so the body has no choice but to sleep. I do go to bed early each night and I’m an early riser to be available for communication with Stockholm if necessary.
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And now the lightly edited transcript of the Mr. Magazine™ interview with Eric Zinczenko, CEO, Bonnier Corp.
In magazine media as a whole, it has been the best of times, it has been the worst of times. What’s your view on the industry? Has it been the best of times, the worst of times, or somewhere in between?
I think it’s somewhere in between. For companies that are evolving, in challenging their orthodoxies of the way legacy media companies have operated, for the companies that are evolving, those are companies that are seeing opportunity in front of them. And I think maybe companies that are more stuck in the way that we’ve done things for decades, I think it could end up being the worst of times for them. I do feel that the only thing predictable is that disruption is going to continue.
Disruption, as you said, has been moving even faster. June 2018 will be three years for you as CEO of Bonnier in the U.S. What can you tell me about those three years of your very busy life? You’ve been in the media business for years, but as you move toward your third anniversary in June, tell me about those years.
I think I’d start with something you mentioned, and it’s a quote that I think of often: today will be the slowest rate of change that we’ll experience in our lifetime. From this point on, disruption, technology, and media consumption habits will only be changing and accelerating. And I believe that has had a profound effect. So to your point, I have 25 years in the media business, 12 of those at Bonnier; I’ve worked for all of the major publishing companies, I’ve had time at Time Inc., I’ve had time at Condé Nast, I’ve had time at Rodale, and then the last three years as CEO. And what I’m still adjusting to is how complex these businesses are and how complex these times are, so coming to the office every day, and I said this in a past presentation, it feels like every day Jenga, where our businesses are constantly under pressure.
For a company like Bonnier, we’re not about to just bolt through acquisition, many times we have to manage with what we have. The questions that I have asked each day coming to work have been are we pivoting aggressively enough to new business opportunities? Are we trying to preserve what we have and are the skills and the years of experience, not only in my role, but the roles of many of my colleagues, and the way we think, is it even relevant for the way change is headed? We know that legacy problems and legacy issues can become increasingly destructive, yet we’re still managing a legacy business, so are we doing all we can to position ourselves for success? Those are the things that I think about.
When I took over the role in 2015, the financial situation for the company was a bit different and it required urgency. We ended the year 2015 where we needed to be. And for me, 2016 could be considered maybe the best moment of my career, where in 2015 I stood in front of my board and shared our plans of how we were going to diversify the company, and then in 2016 we delivered on everything we had promised, and then some. We were able to triple our ad year in 2016; we were able to grow new revenue streams, and we did it with 18 per cent less workforce than the year prior.
Then here comes 2017 with its own set of challenges and I’m preparing for a board meeting where 2018 looks different. So, to summarise, I just think it’s been a time of accelerated change and it’s important and a leadership moment for me to try and get the company to think differently, break our orthodoxies and move into new areas of growth.
And 2018 has witnessed some of that accelerated change, you’ve closed some titles, and recently the announcement was made that you’re moving to a new publishing platform, Arc, with Bonnier’s digital channels. Can you tell me about those changes?
We moved to a new platform with our digital and that platform is Arc, which is owned by the Washington Post. We moved to Arc because here at Bonnier we’ve spent the last five years trying to move everyone to a proprietary CMS system that we had. And that CMS system was called Sandcastle. So, we made a decision based on economic factors, based on how we wanted to operate, and the CMS of Arc would be stronger than our own proprietary CMS, so it would have more of a suite of opportunities for us from a digital perspective. So, that was seen as not only an efficiency measure, but actually an opportunity.
And in terms of our brands, we are tracking the vitality of each of our brands and what we’re finding is the brands in print that are in leadership positions in their particular vertical are the ones that are thriving or doing well. And then some of our other brands that sit maybe two, three, or four in a vertical, those are the ones that are being challenged. And in the case of some of our other brands, we’re just taking them out of print, but still operating them digitally.
For someone who has been in this business for a quarter of a century or more, do you see a value in print in today’s digital age?
I do. The notion that print is dead is not accurate. I think print isn’t dead, it’s just different. Gone are the times where you can operate with an inflated rate base or 12 times per year as a standard. And I think gone are the days too where you were just concerned with whether there was enough fax paper in the machine where you got all of your signed insertion orders back. Those days are behind us. But print for many companies, Bonnier included, is still profitable. It’s just not at the margins that we once enjoyed. And I feel strongly that brands that sit one or two in a category or vertical can thrive if managed correctly.
And I think an example of that would be Popular Science, where back in 2010 the late Steve Jobs, if you remember he held up the first iPad and presented Pop-Sci as the first magazine on the iPad. At the time we had over one million print subscribers and we had about 70,000 digital subscribers. Now you would think if there were any infinity group that would switch to digital it would be the readers of a technology product like Popular Science, but fast forward a decade to the end of 2017, we had one million print subscribers. So, I think Pop-Sci still has the strongest circulation economics of any of our brands too. It’s clear that readers still want Popular Science in print.
To answer your question regarding print versus digital, I also believe with the proliferation of fake news, I do believe that quality printed stories have an opportunity to maintain or grow audience. And I think that the magazine printing process, which is still viewed as maybe a detriment, in terms of time to market, I still is an opportunity because it allows time to fact check; I think it allows time to make sure that the story is accurate and they can try for a more timeless perspective. And I believe that.
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As you do this balancing act between print and digital, when do you think you’re going to see that turnaround where people are paying for digital, whether through paywalls or something else, instead of the welfare information society that has, for the most part, existed since the digital explosion? We see brands like Wired, New York Magazine, and The New Yorker having paywalls; do you see this as an accelerated trend?
I hope it’s an accelerated trend, but I do feel firmly it will be a trend. I think the newspaper industry has done a pretty inspirational job of getting people to pay for their content, and I think the magazine industry has lagged behind the newspaper industry. But I really do believe there’s opportunity there. You mentioned Wired and I think they’re an inspiration too. So, this is something that we’re absolutely taking interest in at Bonnier and we’ve talked to some consultants that can help us unlock the potential there.
You mentioned that 2016 was one of the best years of your career after achieving what you promised the board in 2015. Was it a walk in a rose garden for you to attain that achievement, or did you have some major challenges along the way?
It wasn’t a walk in a garden, I don’t think. (Laughs) You know it’s funny, I say today, there are no gifts in our industry. There are no gifts. So, everything that you do is earned today. And 2016 was difficult. I think the biggest challenges for that year were to get people to believe. At the time, when we talked about diversifying and shifting away from our sole reliance on print and digital media, I think that raised some eyebrows. But here we are a few years later and the strategy is taking hold.
I used an example back in 2015 that we need to operate this company just as a portfolio manager would operate a retirement account or a mutual fund, where the ideas are to diversify your revenue and the profit coming in. In 2015 we had 50-something percent of our revenues coming from traditional print; we had 28 per cent coming from digital media; and then we had about 20 percent coming from ancillary. And we’re looking to, by 2020, be in a situation where we’re more like 33 per cent in those three areas. So, it’s much like future-proofing a retirement account, that’s the way we’re trying to run Bonnier. And that has been a challenge.
Since that time we have had to go through restructures and realignment of the company, and hire new competency in these areas like events and licensing and in some of our marketing services and agency work. And that’s competency that we have to find from outside the office. And that’s been a challenge, the realignments and the restructures.
Correct me if I’m mistaken, but you are the only surviving company that is still based in Europe, but with a presence in the United States, in terms of the magazine media. Hachette was bought by Hearst, G&J left. What are the positives and negatives of being on both sides of the Atlantic?
Well first, the positive is we’re lucky to have wonderful ownership. We’re a 200-year-old media company with a media family that has seen it all. They’ve seen disruption; they’ve seen wars and more, therefore they have a very patient, respectful, Scandinavian perspective on everything. So, the pressure is absolutely there to deliver on what you promise, if you say it, it better happen, but they also understand market factors, and they never panic. I mentioned that I am preparing for a board meeting now and I can tell you that my presentations look different today than when I started, where there was just numbers and here’s the strategy.
So, the positive is we have a patient board, a privately-held company, and on the flip side we have a geographic challenge, where my days are a bit different. I’m up many times at 4:30 or 5:00 a.m. to make sure that I’m available for communications with Stockholm. And there’s plenty of travel between Scandinavia, Stockholm and here in New York. But they’ve been patient and they believe in our diversification strategy.
I hear from almost every CEO that I interview that they’re doing more with less. You told me earlier that your workforce is now 18 per cent less than it used to be, yet you’re doing more.
Let me make a correction, it was 18 per cent from 2015 to 2016. Then we had our recent restructure too, so it’s a 36 per cent reduction in workforce since I became CEO, and many industry peers would state the quality of Bonnier content didn’t slip, but is actually the strongest yet, as evidenced by the numerous National Magazine Awards and the most recent nominations of General Excellence for Saveur and Popular Science.
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So, what’s that magic wand you’re waving at work that you can produce better and more with 36 per cent less workforce? Was the industry spoiled, printing money, that it didn’t care how many people it hired? What’s your magic wand?
I will not speak for any other company, but I think the experience here is that we had areas of improvement where we could have been more financially disciplined. And the magic wand has been to maximise shareholder value and do it in a smart way. And I think when you make changes like the changes we have made since 2015, it’s very important to communicate those changes and explain why we’re changing and how we’re going to change. Communication is a big factor.
Culture is very important here, and it’s something that I take seriously. And I think culture remains a challenge. I believe it’s an enormous challenge for any media company right now, to keep everyone motivated and leading through the unprecedented disruption. When an organisation is going through constant restructures, at times it’s like juggling eggs. It’s impressive when you can pull it off, but it becomes a real mess when it’s done in the wrong way. And we really do try. The approach has been a transformation here at Bonnier of more of a startup approach.
I think most legacy media companies start with the idea of cutting. So, they speak to the manager and find out who on their staff that they can reduce by one or two. And then the next year comes along and they have to cut more. They go back to that manager and that manager picks two more people. But I believe what companies really need to do is start from a zero base, in more of a startup mode. So, it starts with the CEO; who does the CEO need next, it’s the CFO. After the CFO, who’s next? And that’s really how we’ve tried to organise the company and that was part of our big realignment that we just did a month ago.
It’s interesting, there’s other principles we try and speak about here, and again, it’s to break these orthodoxies of the way that we’ve done things, but my view is we have these wonderful brands at this company, if it makes money it makes sense. Imagine an Amazon employee back in the ’90s saying, wait a minute, we ship books, that’s what we do. Or Google back in the ’90s; wait, we’re a search engine company and that’s what we do. There are opportunities everywhere if you just stay true to the brand and you understand your audience and your customer. There’s a lot of opportunity out there.
If you could have one thing tattooed upon your brain that no one would ever forget about you, what would it be?
He subscribed to the ethic of constant improvement in all he did.
If I showed up unexpectedly at your home one evening after work, what would I find you doing? Having a glass of wine; reading a magazine; cooking; watching TV; playing with your two children; or something else?
Reconnecting with my family and hearing of my kids’ day is the quickest way for me to separate from my work. If work stress is near a high and requires more, I’m a wine enthusiast so I will settle with a great glass of wine and break out my bass guitars and play some music.
And my typical last question; what keeps you up at night?
I know most answers from CEO’s are funny. (Laughs) They say they don’t worry and sleep just fine, but truth be told, sleep is difficult for me sometimes. My mind races for what’s next to be done; what could we be doing different; is there enough urgency in our approach; am I giving enough to the office and to my family. The good news is I care about my personal fitness and health to make sure I get a pretty exhaustive workout every day, so the body has no choice but to sleep. I do go to bed early each night and I’m an early riser to be available for communication with Stockholm if necessary.
Thank you.
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