Mr. Magazine

“Advertisers and consumers want to pick something up; they want to have this luxury experience of flipping through pages and all of those types of things, so I don’t see digital-only as being the future for how we move forward or the space as a whole moves forward, but I think there will be some subsets in there that will knock it out of the park.” Todd Paul

City and Regional magazines are niche marketing at its best, focusing in on the topical area and presenting its audiences with information they both want and need. They are the answers you receive when you Google the question: where do I find out the intricacies of a certain city or region.

Open Sky Media has five titles that are producing quality content to a decisive audience and doing it successfully. From Marin to Slice, Austin Monthly, and San Antonio Magazine to Gulfshore Living; the magazines are enjoying a robust present and have a healthy diagnosis for the future.

Todd Paul is president of Open Sky Media and reached out to me on a recent trip he made to Oxford, Miss. We met in my office at the Magazine Innovation Center, enjoyed a cup of coffee together and talked about the city and regional space and how the niche was doing as a whole, and more specifically how the five titles under his umbrella were weathering the storms of the digital age.

His answers were insightful and offered a definitive perspective from the financial aspect of his business for the city and regional category. The trajectory he presented for the future of his titles was a positive-print tomorrow, with an added dash of digital to achieve that ever-so important balance between the two.

I hope you enjoy the Mr. Magazine™ interview with Todd Paul, a young man who’s at the helm of some very profitable city and regional titles and knows how to keep them that way. In Mr. Magazine’s™ opinion; if it ain’t broke, don’t fix it.

But first the sound-bites:

On the status of his titles: Our titles are spread out from California to Florida, with a big focus in Texas and Oklahoma City and they’re growing pretty significantly on a revenue and profitability basis.

On whether his magazines are the exception to the rule or he’s seeing this positivity across the city/regional board: I think on the whole that people are really seeing this work. On the whole, all of these boats are rising; the people are focusing on the core things that differentiate the city and regional magazines in their space and in their community. And the people who are focusing on that are winning; they’re growing their business and revenue and growing the quality of their products.

On what he’s doing differently today than in 2007 to produce his magazines: Over the last couple of years, we’ve definitely had to think of those as almost little sub-businesses; we’ve had to add some editorial staff and those kinds of things, so there are some functional things that we’ve done differently.

On whether he believes digital-only is the way to go for city and regional titles: On the broad scope of things, no. I don’t think that would work for the city and regional magazine space as a whole.

On why he believes the city and regional audience still wants print: I think people view digital as utility and print as luxury. The audience and advertisers don’t seem to be moving away from that print experience.

On why he thinks investing in print in 2015 is a wise thing to do: From a sheer economics and financial perspective, it’s a really good investment. People would be shocked at some of the profitability that we’re able to achieve in our divisions. From an investment perspective, it works from that standpoint.

On the biggest stumbling block he’s had to face: When we entered this space, we thought that maybe part of the approach was to take the newspaper strategy of consolidating a lot of services like production, accounting and things like that and then have five or six magazines with most of their business centralized and have the editorial and sales out in the local markets. We played around with that idea because the centralization of services was one of the big things that newspapers were doing. We realized very quickly that it wasn’t going to work.

On why he believes the media keeps preaching about its own demise: I think that these businesses are very structural in nature, economically and financially-speaking, because of the nature of marketing dollars and how they survive recession. When you take this narrative of there’s this big area of media that’s struggling to get moving and make the digital transition, coupled with the giant recession that we had; it naturally takes ad dollars out of the market . It really just created an easy story to tell, but I think it glossed over the broader picture.

On what keeps him up at night: I think I’d be lying if I didn’t say I’m spending a lot of mental energy on how to balance this digital transition; in our space no one has figured it out yet. And how to give the consumers and the advertisers what they want and be true to our core brand and what we’ve built in all of these different divisions. I spend a lot of time thinking about those things.

And now the lightly edited transcription of the Mr. Magazine™ conversation with Todd Paul, President, Open Sky Media…

Samir Husni: Todd, welcome to Oxford.

Todd Paul: Thank you.

Samir Husni: Tell me a little bit about the status of your titles and then, in general, where do you see the city and regional magazines heading?

Todd Paul: Our titles are spread out from California to Florida, with a big focus in Texas and Oklahoma City and they’re growing pretty significantly on a revenue and profitability basis.

And one of the things that we do is we really push quality of the product first. We see the advertising base, and our respective geographies are really starting to grab onto that; and we see it in a couple of different ways. We’ve just been through a big recruiting cycle this spring, and what we noticed was our quality of recruiting candidates was so much better than we’d seen previously, because people would say, Austin Monthly, I really like what they’re doing and I want to work there. So, we’re starting to see that come back. And we’re seeing that same behavior from the advertisers too.

So, it’s really been interesting to watch some of these, I guess you’d call them archaic things today (Laughs) happen, but they’re coming back around. People are saying, wow, that’s a good product or it’s a good magazine. From a business perspective, we’re seeing that those things are really starting to pay off and work and do well. Our businesses as a whole are doing really, really well.

Samir Husni: Are you the exception to the rule in the city and regional marketplace or is this something you’re seeing across the board?

Todd Paul: The city and regional space is really interesting because it’s not competitive and everybody is pretty open to talking about their businesses, so it’s one of the luxuries. When I’m talking to various other people of our size and other people in the community of the city and regional space, they’re always seeing those kinds of things happening.

A mutual friend of ours, Todd Matherne in New Orleans; he launched a business title last year that is just knocking it out of the park. Then I talked to Dan Denton in Florida and his titles are doing great.

I think on the whole that people are really seeing this work. On the whole, all of these boats are rising; the people are focusing on the core things that differentiate the city and regional magazines in their space and in their community. And the people who are focusing on that are winning; they’re growing their business and revenue and growing the quality of their products.

From the people who I’ve talked to, it seems to be making more movement in that direction.

Samir Husni: I hear people ask from time to time; who needs a city magazine nowadays; I can go to Google and get everything I want and need to know. What differentiates today’s city and regional magazines, especially yours, from how you were producing them, let’s say, back in 2007 prior to the digital age?

Todd Paul: Over the last couple of years, we’ve definitely had to think of those as almost little sub-businesses; we’ve had to add some editorial staff and those kinds of things, so there are some functional things that we’ve done differently.

And I think there’s this big rub of do you recreate the magazine on a digital platform or do you use the brand of the magazine to create a different product? We kind of go back and forth. One of the interesting things about how we run the businesses is we realize what makes these businesses successful is that they’re local. So we keep the decision-making largely in the local hands of the publisher and then I serve as consultant accountability metric to those publishers.

One of the interesting things about that is our publishers use different strategies around that vein, so we have people doing different things in that market.

From an advertising perspective, when we get people wanting to advertise with us, it’s primarily driven by print, but then they want to talk about what we have in digital; what are we doing with events; they want to have those conversations, of course, still around the print, but if you have print and don’t have digital; you’re at a disadvantage. We see it as definitely an auxiliary request and something that people are wanting, but we’re still primarily focused on print.

Samir Husni: If we reverse that formula; I’ve noticed recently that some magazines have decided to kill their print edition and go digital-only. Do you think that’s the way to go?

Todd Paul: On the broad scope of things, no. I don’t think that would work for the city and regional magazine space as a whole. I think there are some pockets, as we were discussing earlier; some like 7×7 Magazine and what they’re doing out there, because they’re geographically located in San Francisco, kind of the epicenter of a lot of this kind of thing; I think they’re doing some really interesting stuff and seeing a lot of success at it.

In Austin we see some of those kinds of trends too, just because of the geographical nature. Is that going to work in Naples, Florida? No, I don’t think so. At Gulfshore Life that’s never going to be the case. From a broad perspective, I don’t think that’s a strategy that we would go forward with at all.

Custom publishing and all of those inserts around magazines; people crave that stuff. And I think they still see that in the industry. Advertisers and consumers want to pick something up; they want to have this luxury experience of flipping through pages and all of those types of things, so I don’t see digital-only as being the future for how we move forward or the space as a whole moves forward, but I think there will be some subsets in there that will knock it out of the park.

So, some will spend the dollars and put the energy into creating a model that works in that type space and some people will be successful at that.

Samir Husni: You mentioned earlier that even though the audience expects the digital and mobile; they still want the print. Why do you think that’s the case?

Todd Paul: I think people view digital as utility and print as luxury. I don’t know if that works out perfectly on the print side of that statement, but when we look at our digital use on a monthly basis for Austin, for example, it’s super-high mobile, because you know what, people come to Austin and they get on their phone to learn about the city, where should they go eat barbecue and they click it and Austin Monthly comes up as being this brand authority in this space, which I think is really part of the core values of a city and regional magazine; we’re the authority on lifestyle, culture and the longer formed editorial voice in the community.

The consumer wants that experience; they want to know if they should go to Franklin Barbecue; they want to read about that in two seconds. The flipside of that is the people in the local community subscribe to the magazine every month or pick it up on the newsstand, they want to have a different experience; they want to sit down and read more, just consume the whole culture of that environment as opposed to being focused on just one specific thing. I think that’s how we see the audiences differently. And there is very little overlap in that in most of our markets. The audience and advertisers don’t seem to be moving away from that print experience.

Samir Husni: You seem like a person who’s putting his money where his mouth is. You’re expanding, buying and growing in your space. Put on your futuristic hat for a minute and tell me what does tomorrow hold for your titles? Are you out of your mind investing in print today, in 2015? Or do you believe it’s a wise investment?

Todd Paul: From a sheer economics and financial perspective, it’s a really good investment. People would be shocked at some of the profitability that we’re able to achieve in our divisions. From an investment perspective, it works from that standpoint.

And we are growing. We have a pretty focused niche on where we’re looking to buy magazines, but I’m still trying to buy. I’m actively talking to three people right now, trying to partner with them, buy their magazines. So, we’re in that mode.

Five years from now, I believe our business will be twice the size it is now. People may think we’re crazy for investing in this space, but it has a lot of characteristics that just aren’t going away. People in the community still want to have the experience they get through a city and regional magazine.

For example, I live primarily in Evanston, Illinois and I go to the mailbox on Saturday and there’s a new Evanston magazine sitting there and it just launched. And it’s a good quality product. People are still entering the space and it has a lot of opportunity in it. Advertisers still need to reach the audience that we provide and I think the audience still demands a quality editorial product with thoughtful and well-placed advertisers. They want that experience because they want to learn about the advertising base as much as they want to learn about the content base.

One of the things the digital world has programmed and we learned this through all the studies out there that are saying, you’re automatically blocking banners and certain things on a website that one side of your brain has already learned to overlook. So, that kind of advertising to me is just throw-things-against-the-wall and hope that there’s some fraction of people who see it and want to click on it.

Our audience is really picking up the experience and is interested in what’s new in the marketplace as far as commerce as much as they are reading about whatever editorial topic is going on. So, there’s a really interesting meshing of those two worlds that happens in our type of product that consumers are interested in.

Samir Husni: What has been the biggest stumbling block that you’ve faced and how did you overcome it?

Todd Paul: When we entered this space, we thought that maybe part of the approach was to take the newspaper strategy of consolidating a lot of services like production, accounting and things like that and then have five or six magazines with most of their business centralized and have the editorial and sales out in the local markets. We played around with that idea because the centralization of services was one of the big things that newspapers were doing.

We realized very quickly that it wasn’t going to work. You start to lose the product and the local feel. It was a learning curve. We thought it would work here and here, but we realized that it didn’t. It wasn’t a catastrophe, by any stretch of the imagination, it was just one of the things we tried and we stumbled a lot around it, culturally, within the business and community-wise, when it came to having those connection points.

That was one of those about-faces in the business where the strategy and the reality started to differ pretty quickly. We went down that path briefly and then we quickly about-faced the other way because if you’re an advertiser and you’re working with the ad designer in one of our businesses, you don’t want to talk to that person in Marin if you’re in Austin, Texas. You want to talk to somebody in Austin, Texas. If you say you’re local, that’s got to penetrate all the way down to all of your consumer experiences, whether that’s your advertiser, subscriber or whoever, because that’s really where the value of this niche is at this point in the game. That was one of the interesting learning curves for us.

Samir Husni: You told me how good your titles did last year and that you’re on track to do great this year; Norm Pearlstine at Time Inc. told me that all their magazines were profitable last year. Everyone that I’m interviewing is telling me how good things are going for them. Why then do the media keep preaching about our demise?

Todd Paul: I think there are certain areas of media and print products that are definitely in that vein and a lot of that led the charge through the 1990s and the early 2000s into today. Like all people, we enjoy stereotyping; creating east mental constructs in order for us to understand parts of the world and I think that’s what we do in an information-rich society. I think that people look at that experience and those areas of media and assume that it’s happening across print as a whole.

And then I also think that these businesses are very structural in nature, economically and financially-speaking, because of the nature of marketing dollars and how they survive recession. When you take this narrative of there’s this big area of media that’s struggling to get moving and make the digital transition, coupled with the giant recession that we had; it naturally takes ad dollars out of the market . It really just created an easy story to tell, but I think it glossed over the broader picture.

I communicate a lot with people in my space, but I also talk to people who are doing trade publications and other types of media, and niche media and media with a very specific audience and that have a very good way of communicating with that audience, is knocking it out of the park. They’re doing what they’ve always done and they’re kind of head-down, not talking about it as much as say The New York Times is talking about it. (Laughs) When you are the platform and you talk about it, it’s a little different than all these little niche spaces that are pretty fragmented around the U.S. If they’re doing well, the cumulative voice of them doesn’t matter, so it’s a combination of those three things. There are definitely some people who are struggling in the space and some of the niches, but there are a lot of other ones that are doing really well.

Samir Husni: How many titles do you have in total?

Todd Paul: We own Marin magazine, Slice magazine, which is in Oklahoma City, Austin Monthly, San Antonio magazine and Gulfshore Life in Naples. Within those five areas there are quarterlies and annuals; we do Austin Home, Design Oklahoma, some of those are bi-annuals or quarterlies. On an annual basis, we’re producing around 120 products.

Samir Husni: Is there anything else you’d like to add?

Todd Paul: These conversations are what I’m having with friends or what we’re having within our business units. Nobody has the answers, for sure, and we definitely know that we’re in a great period of change, but it’s fun conversations to be had when your businesses are growing and getting product and design awards and growing financially; when all of those things are clicking along, these are fun conversations to have, because you can put the energy in, not putting out fires, but really creating the next version of whatever it is your doing in the space.

Samir Husni: My typical last question; what keeps you up at night?

Todd Paul: I think I’d be lying if I didn’t say I’m spending a lot of mental energy on how to balance this digital transition; in our space no one has figured it out yet. And how to give the consumers and the advertisers what they want and be true to our core brand and what we’ve built in all of these different divisions. I spend a lot of time thinking about those things.

I think that there’s a big prize for whoever figures out the right balance in that. What keeps me up at night is making sure that balance is right. You can go too far one way and not far enough another, so I’m trying to bite that off in increments. I don’t ever, in the foreseeable future, the next five years, it will never be even 50% of our business from a revenue-based perspective, but if I think about our businesses as curators of eyeballs and I want to make sure that I’m thinking about those eyeballs proportionately and getting that balance right. Getting the balance is really the core of what makes me anxious. (Laughs)

Samir Husni: Thank you.