Mr. Magazine

Mr. Magazine™ Presents… Conversations With Magazine and Magazine Media Leaders…

Bonnier Corporation is one legacy media company that may have been around for over 200 years, but is definitely not showing its age. In fact, it’s looking forward to 2020 and beyond with steadfast vim and vigor. The USA portion of this heritage company opened its doors in 2007 and under the guidance and leadership of its present CEO, Eric Zinczenko, has enjoyed immense success, creating better quality content with less workforce. And it’s a success that Eric is determined to see continue into the next year and beyond.

Strong magazine brands with consumer engagement and equity are key to Bonnier’s plans for 2020, along with event growth and their many other revenue streams. I spoke with Eric right before the holidays and he shared with me success stories and the many challenges he faced in 2019, the success stories far exceeding any obstacles he may have encountered. And while he admits these are challenging times for magazines and magazine media, they’re also hopeful times and a great season for new opportunities.

So, please enjoy this intriguing conversation with, Eric Zinczenko, CEO, Bonnier Corporation, as Mr. Magazine™ brings you the next in his series with the magazine and magazine media executives that make the industry world go-round.

But first the sound-bites:

On his assessment of magazines and magazine media in 2020: I believe the evidence is in front of us, that the future will be challenging for magazines and magazine media. Changes in media consumption behavior; accelerating technology disruption, giving consumers more control; the proliferation of content on all platforms; the fight for viewership and engagement; I think all of this points to times getting more complex and difficult before getting easier. With that said, I still believe there are magazine brands and smart companies that will be able to weather these challenges and market forces. Magazine brands with strong equity and connections to the consumer will always have their place.

On whether he thinks there are lessons American magazine media can learn from European business models: They’re heavy freelance in Europe, very heavy. And they look to have the smallest organization possible, they’re not reliant on a lot of corporate overhead and corporate allocations. And there is a level of efficiency there that we certainly have learned from having Swedish owners. And at Bonnier Corp. we have reduced our employee headcount over the years, over my tenure as CEO, by about one half in the last five years, of the entire workforce.

On any accomplishments or successes for Bonnier USA that he is proud of in 2019: My fiduciary responsibility as the company CEO is to deliver on expected results and 2019 will be another year where Bonnier Corp. will meet or exceed our financial objectives. We will exceed our targets for consolidated revenues for 2019, and reviewing our financials recently, we should be able to meet our 2019 EBIT budget target. Our current cash position is strong enough for me to make the call now that we will meet or exceed our 2019 cash flow budget as well. Considering the challenges around us, and what I know of our peers in the industry, I’m very proud of this result and our teams should be proud too of this exceptional performance.

On whether 2019 was a walk in a rose garden for him or he had some challenges along the way: No, it wasn’t a walk in a rose garden. (Laughs) It was a challenging year; it was one of my most difficult years, but yet we found a way as a company to still meet our financial obligations and I couldn’t be prouder of that. But the event in Saudi Arabia was extraordinary and the other points that I mentioned here, in terms of accomplishments, helped fill the gaps and the variances coming from media and other places where we had challenges.

On whether he thinks the magazine industry was slow to change when it comes to the traditional advertising business model: I do, but I think everybody now is following this diversified model. But I think the answer to your question is yes, a lot of companies were slow because it’s hard. When you have large organizations built on decades of success under one model and then you’re forced to explore a new future path for sustainability, that gets difficult for an organization; it gets difficult for cultures. And there is a resistance to change, orthodoxies are present and oftentimes people are scared or hesitant. And I think it’s a typical response.

On whether he considers social media platforms friend or foe to magazines and magazine media: I think social media is both a friend and foe. It’s such a powerful medium. The sheer scale and immediacy is so powerful, how can it not be both? Used correctly, magazine brands can reach new audiences, deliver content and news instantaneously. And then there are metrics, so thanks to those metrics we are closer to understanding the consumer more than ever before, and while doing so I think you have a chance to add brand awareness and equity overtime. But used incorrectly, we’ve all witnessed the damage that can be done with social media platforms. They’re so powerful that brand equity and reputations can erode in minutes or even be destroyed with the medium.

On anything he’d like to add: These are challenging times, but I always say that I’m grateful that these are our problems to solve. I think we’re lucky to have this opportunity. I know you have interviewed many of my peers who are doing fantastic work in tough times, and watching their companies and our industry evolve over the last few years has been inspiring. I think 2019 will go down as one of our more difficult years at Bonnier Corp. and yet again, we will have another year of exceeding expectations. So, I feel fortunate for how our company is going into the holiday break here and look forward to our work in 2020.

On what keeps him up at night: With five years in this role, the nights are getting easier. But still there are some nights where a fair amount of second-guessing happens overnight. Are we moving fast enough? Did I make the right call? What did the Board really think of this or that? And I think this is pretty common for the job. Where I do lose some sleep is when there are internal operational issues where I believe we are making the task in front of us harder than we should. That’s when nights get restless and anxious and I just want these issues resolved, which we seem to somehow find a way to do.

And now the lightly edited transcript of the Mr. Magazine™ interview with Eric Zinczenko, CEO, Bonnier Corporation.

Samir Husni: As we approach 2020, what’s your assessment of the future of magazines and magazine media?

Eric Zinczenko: I believe the evidence is in front of us, that the future will be challenging for magazines and magazine media. Changes in media consumption behavior; accelerating technology disruption, giving consumers more control; the proliferation of content on all platforms; the fight for viewership and engagement; I think all of this points to times getting more complex and difficult before getting easier.

With that said, I still believe there are magazine brands and smart companies that will be able to weather these challenges and market forces. Brands with strong equity and connections to the consumer will always have their place. For companies to be successful, I believe all business models and the organizational structures of the past built around exploiting advertising and media must be replaced by new models around content, commerce, affiliate membership and more. And I think this all has to be done with the smallest and most nimble organizational structures to be able to move more urgently to innovate and explore.

Samir Husni: You mention a smaller and more nimble organizational structure, this has been the case in Europe for years. Do you think there are lessons we can learn from the Europeans or lessons that we can apply to magazine media in the United States?

Eric Zinczenko: They’re heavy freelance in Europe, very heavy. And they look to have the smallest organization possible, they’re not reliant on a lot of corporate overhead and corporate allocations. And there is a level of efficiency there that we certainly have learned from having Swedish owners. And at Bonnier Corp. we have reduced our employee headcount over the years, over my tenure as CEO, by about one half in the last five years, of the entire workforce.

Samir Husni: Can you name three accomplishments or successes for Bonnier USA in 2019 that you’re proud of?

Eric Zinczenko: My fiduciary responsibility as the company CEO is to deliver on expected results and 2019 will be another year where Bonnier Corp. will meet or exceed our financial objectives. We will exceed our targets for consolidated revenues for 2019, and reviewing our financials recently, we should be able to meet our 2019 EBIT budget target. Our current cash position is strong enough for me to make the call now that we will meet or exceed our 2019 cash flow budget as well. Considering the challenges around us, and what I know of our peers in the industry, I’m very proud of this result and our teams should be proud too of this exceptional performance. So, that’s number one.

Number two and a big driver to our financial success is our Bonnier Events. In 2019, our Bonnier Events business unit was hired by the Kingdom of Saudi Arabia to produce and manage a five-day automotive festival in the capital city of Riyadh in November. And it was an ambitious initiative; it’s a first-year event, a new venue, a foreign country; you could call it an “away” game (Laughs), and we were still able to meet our deliverables. By most metrics the event was a success, but more importantly, the success we had in Saudi Arabia now proves to international venue organizers that Bonnier Corp. is clearly capable of producing and managing events globally.

And number three for 2019 is that our diversification strategy for the company is ahead of target. And this is where we have revenues from our other business units outside of media growing, and we are nearing an inflection point where our three business units, which are events, consumer products and working mother group, will combine for revenues that will be higher than that of media.

I just mentioned events and our international growth, our consumer products and brand licensing business unit now has three Bonnier brands under license: Outdoor Life, Saveur and Popular Science. Our working mother business unit also had a successful year launching Culture At Work, which is their new consulting arm, and that’s adding solid revenue and margin to the group. And then they have year-over-year growth coming from their Diversity Best Practices membership group. So, all of this is exciting and energizing to see, the diversification strategy coming together.

Samir Husni: So, was 2019 a walk in a rose garden for you, or you had some challenges along the way?

Eric Zinczenko: No, it wasn’t a walk in a rose garden. (Laughs) It was a challenging year; it was one of my most difficult years, but yet we found a way as a company to still meet our financial obligations and I couldn’t be prouder of that. But the event in Saudi Arabia was extraordinary and the other points that I mentioned here, in terms of accomplishments, helped fill the gaps and the variances coming from media and other places where we had challenges.

Samir Husni: With Bonnier, you have a sort of three-legged stool business model, with events and other revenue units, do you think that the magazine industry was slow to change when it comes to that traditional advertising business model?

Eric Zinczenko: I do, but I think everybody now is following this diversified model. But I think the answer to your question is yes, a lot of companies were slow because it’s hard. When you have large organizations built on decades of success under one model and then you’re forced to explore a new future path for sustainability, that gets difficult for an organization; it gets difficult for cultures. And there is a resistance to change, orthodoxies are present and oftentimes people are scared or hesitant. And I think it’s a typical response.

The harder response is to lean into disruption and I always say don’t adjust, but disrupt and go for bold, and you’re beginning to see companies do that. I know you’ve interviewed other peers who are beginning to make bold decisions and move as quickly as they can.

Samir Husni: Do you think digital, with all its platforms, including social media, is a friend or a foe to magazine media?

Eric Zinczenko: I think social media is both a friend and foe. It’s such a powerful medium. The sheer scale and immediacy is so powerful, how can it not be both? Used correctly, magazine brands can reach new audiences, deliver content and news instantaneously. And then there are metrics, so thanks to those metrics we are closer to understanding the consumer more than ever before, and while doing so I think you have a chance to add brand awareness and equity overtime. But used incorrectly, we’ve all witnessed the damage that can be done with social media platforms. They’re so powerful that brand equity and reputations can erode in minutes or even be destroyed with the medium.

But I know you asked this question because you understand that this relationship between publisher and platform is complex, which it is. Social media platforms have their own interests and they constantly change the rules, the algorithms; really anything that will tilt the field of play in their favor to protect their business interests, as they should. Obviously, it makes things more difficult for publishers and content producers, but these platforms with their sheer scales and social influence, their impact, they’re just too big to ignore.

Therefore I think it’s our responsibility as business leaders to be relentless in finding ways to explore the power of the platforms for our interest and business objectives.

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

Eric Zinczenko: These are challenging times, but I always say that I’m grateful that these are our problems to solve. I think we’re lucky to have this opportunity. I know you have interviewed many of my peers who are doing fantastic work in tough times, and watching their companies and our industry evolve over the last few years has been inspiring. I think 2019 will go down as one of our more difficult years at Bonnier Corp. and yet again, we will have another year of exceeding expectations. So, I feel fortunate for how our company is going into the holiday break here and look forward to our work in 2020.

Samir Husni: What keeps you up at night?

Eric Zinczenko: With five years in this role, the nights are getting easier. But still there are some nights where a fair amount of second-guessing happens overnight. Are we moving fast enough? Did I make the right call? What did the Board really think of this or that? And I think this is pretty common for the job. Where I do lose some sleep is when there are internal operational issues where I believe we are making the task in front of us harder than we should. That’s when nights get restless and anxious and I just want these issues resolved, which we seem to somehow find a way to do.

One thing that helps me sleep at night, if I’ve learned anything over my time at Bonnier Corp., is that we have strong brands, great people, and a supportive and understanding Board and ownership. And I think it’s an enviable position to work from. And I’m grateful for that.

Samir Husni: Thank you.  

Next Up, David Parry, president & CEO, American News Company (ANC).