Le PDG de Condé Nast explique pourquoi le journalisme humain l’emporte à l’ère de l’IA

Anyway, uh >> we have the perfect guy to ask. >> We have the I don't know if he's gonna comment on any of this, but we can certainly try and ask him about it because we have Roger Lynch, the CEO of Kai Nast with us here in the TBP and Ultradom. Roger. >> Great to see you again. How you doing? >> I'm all right. >> Uh for those I mean we were hanging out last week, but for those who don't know, uh uh introduce yourself. Let's go a little bit back in time. Take us on your journey and then we can get into all the hot topics in media. >> Sure. Well, um, yeah, I'm been CEO of Cunning for seven years, but prior to that, I spent my whole career really in technology. >> Yeah. And primarily a fantastic guitarist. >> Thank you very much. That was my ambition. >> That was an incredible performance. Uh, it's a little bit of just lore, I guess, but uh we we we can get into hobbies and and things outside business, but uh yeah, take us back. What was the first job in media? How did you get to where you were? >> First job in media? >> Yeah, maybe that's a good place to start. Well, I mean it depends on how you define media. Really, I spent my career at the intersection of technology and media. >> Sure. >> So, the first company that I ran >> was a broadband business. It was one of the first broadband businesses in Europe, uh, going back to 1999. And >> literally one of the first things we did is we did a deal with the NFL to stream live NFL games in 1999. >> That's crazy. >> Where was how much how much demand was there for NFL in Europe at that time? Well, the reason the NFL was interested in it, um, this is back when Paul Tiglyoo was the commissioner. He came over to announce us, >> you know, crazy idea that we had, um, was they were trying to build the NFL in Europe, and they had, >> they're like, I hear people love football over there. Why aren't we why aren't we making money? >> Why isn't our football? Um, they had, I think there was a team called the Amsterdam Admirals at the time. >> Um, there's a European football league they're trying to promote. And uh you know broadband was a really interesting technology and I was really excited to see how it could be used to change how people consume content and that's why we did that that deal. And then I started an IPv company and first video on demand IPv and then >> uh Sling TV streaming TV. So always sort of at the intersection of technology and meteor content. >> Uh then I ran Pandora the first company I ran that I didn't start. >> I loved Pandora. >> Yeah. Pandora. Pandora is truly when I think of magical When I think of magical >> When I think of magical technology experiences in my childhood, I think of Pandora. I think of being in my in the garage with my dad. We'd be like playing pool, listening to music or tinkering. >> Obscure songs on Pandora is amazing. Was there some sort of uh unique opportunity with Pandora around treating it like a radio station? to because it feels like there was some sort of licensing deal on the back end that was not the same as Spotify or iTunes store at the time where >> right because >> yeah the trade-off I remember I must have been I must have been intuitively at the time I was like okay this is a fair trade-off like I'm used to going to iTunes and having to pay 99 >> or I can just kind of like roll the dice maybe I'll get my maybe I'll get my favorite song on Pandora so I found myself on Pandora a lot and >> Pandora took advantage of um some rights that allowed them compulsory rights allowed them to >> stream all of that content and uh but you know one of the trade-offs was you couldn't choose the song >> and so they did launch a subscription this long before I joined >> uh subscription service but we're late for that game they were quite late uh for that game by that time Spotify already had a very strong presence and some of the other big tech companies were getting into it >> but uh you you mentioned AI I mean to me one of the key things with Pandora was the way it combined sort of human taste with AI. So we had a team of musicologists and one of the you know you mentioned you I've been a guitar player all my life. One of the best parts about that job is they were all fantastic musicians. >> So we do these company events and we'd play all the time and these guys were so and they were mostly men were so good. Yeah. But then we had the data scientists also and they would take the work that the musicologists did and create their machine learning algorithms around that and each of the algorithms they had I can't remember now 90 or so algorithms each one get tuned for every individual listener >> so it' be weighted a little bit more Jordy likes this John's like this and uh and so it creates a personalized experience and and to me you know I I still listen to Pandora I also listen to Spotify but when I want something just to put something on and let it play I'll go Pandora because I think those algorithms still outperform. >> Yeah. And we I mean we've talked to this the the new coco of Spotify, but uh like the that AI driven feature, the promptable playlist is just coming to Spotify like this year. And I'm sure it's souped up and powerful and stuff, but it is it is remarkable how long that like internet radio like lasted. These things have long these things have long lives. I'm wondering about your view on durability in media generally. It feels like anytime that there's some platform shift, there's endless think pieces about legacy media is dead, linear TV is dead, this is dead. Everyone loves to talk about that. But in your experience, how does how does the media industry actually change as technology arrives? You know the media industry is has a history of not changing quickly enough >> and you can start with the music industry you know music recorded music industry >> peaked in 1999 and then you know Napster >> and that's sales revenue. >> Yeah. And recorded recorded uh recorded music industry. We we found out like last week or the week before that uh vinyl record sales are like something like 10% of streaming revenue which sounds >> so vinyl records. So that's an interesting trend to talk about but but what the music industry did or didn't do is and this is one of the big mistakes and you know like most lessons that you learn you learn the biggest lessons from your mistakes. What the music industry didn't do is look at how their customers were behaving and say, "Okay, let me craft my business around that." >> They said, "No, I don't like that behavior. I'm going to change the behavior. Let me sue these teenagers in Iowa who are downloading music or sue the ISPs or their parents or whatever so I can change the behavior back because I really like it when they buy CDs. That's really good for my business." >> That was disastrous for the industry. So finally once they had, you know, embraced, you know, downloads and then streaming, it started growing again. It's only just gotten back to the size it was in 1999. >> Crazy, >> you know, 27 years later. >> Um, >> there's more people and people still like music just as much as they did before, >> of course, a failure. >> Of course, but they fought it for for far too long. And uh and it's it's a mistake. Vinyl records have grown every year for the last 18 years. and sales of vinyl records and it was it used to be people my age buying vinyl records and collecting them. Now there are as many people in their 20s buying them as there are people in their 50s or 60s buying them >> and a lot of people in their 20s don't even own a record player. They buy the vinyl records. >> There's an interesting trend that we and we see it a bit in our industry too like young people buying physical magazines. >> Y >> it's like why? Well I think it's a search for authenticity. I think when you have so much >> I got the paper right here >> digital content that is in your pocket and it's all free or free to consume um it becomes less valuable and and maybe less authentic to you >> and so >> yeah and there's there's something that's always been missing from like part of the the experience of being a music fan to never actually go and trade your dollars like I think people do like to vote with their dollars and express their interests and actually have this physical embodiment of their of their taste. >> Well, they're doing it with live music now. That's where the money has gone. The money is, you know, really move to to live. It used to be, you know, in the 90s and 80s and everything, people would go on tour to support their record sales. And now it's the reverse. Release a record so you can go on tour and sell tickets. >> And it feels like the in-person events, stadiums are getting like the capex is just skyrocketing across the sphere. Sofi Stadium here in Los Angeles. There's like more and more ways to draw people in with like ever larger spectacles and these like shelling points where like did you see Taylor Swift uh in the Aerys tour? Like that was a key moment that even like the casual fans needed to find. >> Yeah. >> So after Pandora, talk about the the journey into uh cond. >> Yeah, it was um you know we I it wasn't at Pandora very long because we sold it to Sirius XM. >> Yeah. And you know, I was thinking about what I wanted to do next. And I was fortunate enough to be in um process on four different companies to two were in New York, two in LA. We're we're from LA. So LA had a lot of >> attractions for us. And uh I was flying back and forth between New York and LA and having trouble deciding what I wanted to do. And my wife was like, "Usually you're so decisive." It's like, I know it's really tough. And then I finally realized on one of these flights that when I'm sitting there I had all the information on all these companies every time I'd go to the cond information. I wanted to read about that. It was like and that's how literally how I made my decision. >> Like that's the most intellectually interesting to me. I'm going to go do that. >> Um so and I I but there were a couple criteria I was I had for what I did next. One was I still like the intersection of content and technology and distribution models, >> but non-exclusive content was going to be dominated by big tech companies, >> you know, music, >> sure, >> films, TV, whatever. >> The stuff that I had been doing, it had all been non-exclusive. Like I wanted to go somewhere where we had our own content, we had our own brands, we could control our distribution more. And so that was certainly one of the criteria but also still the opportunity to innovate around technology. How you use technology to create new business models, distribution models and you know Connie and NAS really fit that well. >> Yeah. >> Yeah. There is uh this interesting I mean we've talked about this a ton because uh you know thinking about all the new categories of media which we joked about. We put out this uh really like unhinged market map of of media uh as a joke and then unfortunately people we like called ourselves neotraditional media which was a joke and then now people will tell us and be like you guys are a pioneer of neo neotrad media. We're like we created that category as a joke. Uh but but something that we've uh come back to uh over and over is just the value of these legacy brands that have been built across decades and how um you know take away like the business models and and how those are evolving like it just seems like the value of a Vanity Fair or a Vogue or the New Yorker uh are are uh shockingly uh durable because we're just you can make more of these kind of properties but you need decades. Right. And and um and so I'm wondering your strategy around kind of how you think about counterpositioning these brands against the content that is flowing so freely across. Um >> you're referring to the trough. >> Uh what's that? Oh yeah. Yeah. Yeah. The trough of social media apps. Um but yeah but yeah like even uh you know I I've also talked about the u the challenges with Substack around certain stories. Substack if you're an individual selling a subscription it wants it it will reward people that publish multiple times a week that sell a subscription and yet there's so many stories that take >> months to tell year they there's there's great stories out there that you'd want somebody writing spending a year on it. more hers is not going to break the my massacre on >> and so and so there's this opportunity of like the value of brands and curators that that is maintained and we're not creating we are like again I would say we're creating new uh iconic media brands but it'll take you know 20 30 years right it just you cannot do it overnight uh and then how these things can operate as platforms where there are a lot of super talented uh writers that shouldn't be trying to publish every single week because their calling is to publish uh maybe once a month or even once a a quarter at different points, right? And finding finding those lanes. So, I'm curious about how you're thinking about the role of the different brands under cond, you know, counterpositioning against platforms like traditional social media or or Substack. >> Look, I think you bring up a really good point about Substack in particular, which is it is a great platform for certain creators. >> Yeah. And if you are if you want to be on that bit of a hamster wheel meaning but it may not feel like a hamster wheel to a lot of people like they love to publish content multiple times a week that's great. It's a great platform for that. If you want to spend six months 12 months deeply researching something and Substack is not the medium for that. >> Yeah. >> It won't reward that behavior. The New Yorker is. >> Yeah. Yeah. >> You know it really is and that's and and we get rewarded for that by our subscribers. Yeah, >> when we come out with these really deeply researched investigative pieces that you know we have a huge army of fact checkers at the New Yorker that comb through every single word in that >> so that when it is published it has really really been thoroughly fact checked. >> When we publish that we see the numbers spike on subscriptions our subscribers reward us for that type of jour journalism >> in a way that I don't think works so well with substack. Other things work really really well with substack. >> Yeah. >> Yeah. That said, there's been there's been uh you know, we we're we cover tech primarily. So, we've seen a lot of people from tech leave the sort of like brands or platforms to go to Substack. And some of the some of the times they come out and they're just scooping every single day and it's it's amazing. But more often than not, I'm like, I actually wish that at least a few of you guys would go to one company and I could subscribe to you and you weren't feeling this pressure. Um, and I don't actually want like for a lot of people I'm like I think you selling ads is a waste of your time. You should just be writing, right? And a lot of them feel that. And then the hamster wheel thing I was talking to um you know really big Substacker uh yesterday and they were feeling that. They were like I don't uh I don't want to publish every day, right? But you built a business around that and then you're sort of like trapped to this >> business model. So, uh, so anyways, I think we're going to I've I've said it. Uh, I think in this in this age of AI, in this age of slop, uh, and sort of like ultra fast media, uh, I believe that being a true journalist, being a reporter, being a writer is only going to, I think it was always relatively high status, but I think it will even go up and up and up over >> and become valable. Yeah. And it's more valuable. It's like we want people that are doing original journalism, factf finding. It's so essential. And then also, >> yeah, just just spending spending the time. I mean, we're we're sort of a a symptom of the internet, right? We make ultra fast content, right? I don't expect people to watch >> most of any of the shows from last week, right? Maybe there's some interviews that are sort of durable, >> uh, but the majority of the commentary, it's just it's comes and goes, right? We expect people to watch it in the 24 48 hours that we create it. >> Um, but there's so much content that I think about, you know, sitting down on a on a Saturday where I'm like, well, maybe I want to read I have limited time. Maybe I want to read something that somebody put six months into. >> Look, I think it's important to know what you're good at and take advantage of that and not try to be something that you're not good at. And you guys are really good at exactly what you just described. And so you've made the most of that and you've attracted a really important audience and it's really worked for you in a business model for us to try to chase that would be to move away from what we're really good at and try to become something different. And I agree with you. I think where you know with with the amount of AI generated content or lowquality content that is being flooded into the market that only I think acrru to the benefit of companies that can really stand out from that and so don't try to be that. Like I always tell our, you know, we're going to always have human created content. First of all, I think it's what I know it's what our audiences expect and want. Secondly, we have no competitive advantage over just creating AI generated content. There's that doesn't leverage any of the advantages we have. And so knowing what your advantages are competitive and and and really building upon that I think is always important in any business. And for the industry changes that are happening right now, I think there's real value in it because unfortunately there's going to be fewer places that can do that because the ones that are more marginal may not survive the changes that are happening and uh and you know our brands have been really thriving in it. >> Uh what is uh how do you compare your philosophy of running like a house of brands versus >> let's say an LVMH? Uh is there similarities, differences? what what is the uh philosophy? >> Yeah, I mean, you know, I when I first joined, I spent a lot of time talking to those companies to try to understand how they were organized because one of the things I had to figure out is what I wanted to do with the way we were structured because we were structured very differently. We were um really a loose collection of companies all around the world. Every country operated entirely independently from every other country. >> We really >> Oh my god, it was crazy. >> Wow. There was no technology collaboration. >> There was no They competed literally. I remember literally three weeks into the job >> I'm start traveling. I go to Milan. >> You know I'm trying to visit all different offices and I get a call from my assistant like you know some of the team in Milan is upset you're not visiting. I'm like I'm in the office. I'm here visiting him office. >> I found out we had seven offices in >> KINAS US had an office there. Kanye Russia had an office France had all in Milan. all different offices >> because of course they couldn't be in the same office because they were competitors. >> Yeah. >> So a lot of changes to make >> in that model but but look actually >> it was a great strategy >> when the company was a print publication business. It worked by definition. Kany became very big successful company following that strategy >> but it was not the right strategy for the internet age and a digital age and you know how and how audiences had changed. audience has moved from oh I read my local you know newspaper or my local content to >> I want to see what's you know happening around the world I want to consume content from Korea or China or Sweden or Israel or wherever. Yeah, >> much more cosmopolitan in their approach to how they consume content and uh and so really we use that as a guidepost to say okay how should we structure ourselves >> and just you know question everything about you know how we organize oursel and even the culture of the company which was very very territorial and fft based um to to what it is today which is much more collaborative. So obviously plenty of efficiencies across the portfolio geographically. Uh the brands are power law driven right you have a few brands that drive the the vast majority of the revenue. Have you been in a portfolio expansion period or portfolio contraction period? Is there benefit to going more focused around the the tentpole brands or do you want to expand further? How are you seeing like the >> what we find is scope of the business? You know, certainly our largest most important brands um have done very well in this. You know, like Vogue is our largest brand. >> Yeah. >> Vogue has grown every year I've been at the company. It grows revenue, grows profitability every year. >> And thank you. Good news. Good news. >> It is good news. And um >> and you know, The New Yorker also, The New Yorker just had its most successful year ever by by a long shot. those brands, whatever's happening with search algorithms or AI, they seem to just be able to rise above it. >> Sure, >> we have smaller niche brands, um, Pitchfork, a music brand, very small. It's 1% of our revenue, >> but it has a very strong loyal audience in the category that it covers. It's doing very well. >> And so there's a sort of barbell effect that's happening, >> at least within our portfolio. And then we have some that are in the middle that that are impacted more. either they don't have as strong authority in the category or they're a little too broad that they don't go deep enough in in a specific >> Yeah, we were just talking about BuzzFeed and it felt like for a long time it fell into that category of, you know, decent size audience but ultimately built on a shaky ground of another platform without that really strong core audience that would stick around through thick and thin. >> How do you think about talent identification going with sort of discovered talent? let's say a writer who's established that uh that's that already has a you know following versus somebody who you know has a lot of potential but maybe hasn't had a breakout moment yet and then the same thing with executives. >> Yeah. I think, you know, first of all, for writers, we're a great home for the best journalists in the world. >> In part because, you know, I wouldn't have thought this was a necessary competitive advantage several years ago, but it is today, which is that we're not impacted by political influence. We we're not under the FCC's thumb. We don't have licenses that they need. We're not trying to buy Warner Discovery and need merger approval. Um and so and we're owned by a family as own cutting ass for seven decades >> that you know I've been at the company now seven years and not once have they ever called to interfere with anything we do. Therefore I don't need to do that with our editors. We can just hire the best editors >> and stay out of their way and let them let them do their job the best. So that is very attractive to journalists because they know when they come >> to our company they're not going to get a call from the CEO or the board or whatever about why' you say those things about this advertiser or whatever it is. No, the journalism comes first and will always come first. So that helps us attract very established writers, but at the same time we also are a great place for people earlier in their career to learn because they can learn from the best. So we always try to make sure that we're recruiting really high potential new journalists into the company as well as you know the best external in terms of executives. Um, you know, other than Anna Winter, every other executive has turned over since I joined the company. Every single one. >> Wow. >> And I did most of it immediately. And and two reasons. One, if you want to affect culture change, change people. Change people that that that that don't reflect the culture that that you want to have. And when I got to kind I felt like this is not the culture of there were great things about the culture you know the the focus on excellence really really deep at the company but there were other aspects of it very internally competitive and political that that I didn't like and I just decided I'm going to I want to create the culture of a company that I want to work in so let me find people who think similarly about about the importance of culture and then secondly because you know we were going from like in the US that was a had its own CEO as a separate company from the rest of the world. It was very focused on the US market. I wanted people who had much more global perspective and global experience. And so the skill set I wanted to be broader than than uh what the company had traditionally had. >> Uh probably 2018 this idea of like content to commerce got incredibly popular. >> Uh and even by the time we were starting this show, >> you're thinking New Yorker protein powder. When's it coming? >> Yeah. love that. Uh but even when we were starting this show, a lot of people said, "Wow, you have this audience of, you know, entrepreneurs. Why don't you build your own software and, you know, spin out software companies or develop uh stuff internally?" And we said, "Uh what with what hours in the day are we going to do that? And why why would we deserve to win over a team that is, you know, entirely dedicated to a certain problem? Where has content to commerce worked within cond uh and where have you experimented or avoided it? Mhm. You know the if if you think about from an advertiser perspective, the reason advertisers have always come to cond is the influence that we have with audiences, right? That that you know, whether it's fashion or travel >> or home, you know, it's it's it's the influence that we have >> now. You know, that that was very very true in the print era. It's very true today. But they also have many more avenues to reach audiences than than they used to. So for us when we look at commerce, we think that ability to influence audiences certainly exists even more than before because of how much larger our our reach is. And so we can use that maybe not to create the New Yorker protein powder, but to sell fashion, to sell travel. And >> so we've been investing in commerce but not creating our own products per se. >> Partnerships. >> Yeah. In partnerships. And that that also has grown every year. And we announced a >> it'll be launching soon an initiative we announced last year called VET which is really at the intersection of you know certainly e-commerce growth, social commerce in particular and the creator economy. And so what VET is, you know, we have relationships with all the luxury fashion companies, we're using those relationships, creating a marketplace commerce platform that then creators can use to connect with their audiences. And so we'll be working with a initially a small number of of real taste makers in fashion >> um and then using the relationships and the technology we've built to create this uh creator marketplace called vet. >> How do you think about journalists becoming influencers can be great develop their own audience and then that draws more people into their stories when they do have something to publish. double-edged sword because if they leave, they have an audience that might sign up on day one. They might say something that doesn't necessarily represent the views of the publication. There's sort of, you know, some some organizations have gone back and forth on it, either saying everyone needs to be posting on Instagram every day, uh to you can never post on Instagram any day. Uh how have you toyed with that or dealt with that tension throughout your career? you know, because we have, you know, as you said, a house of brands. Our brands are very different. So, you know, a journalist for the New Yorker may be very different than a journalist for Vogue. Yeah. >> Um, in their approach to that question. So, you know, we don't have hard and fast rules that we would >> So, no oneizefits-all. >> Definitely not one sizefits-all, but we do know that, you know, journalists that are able to build profiles for themselves >> um tend to be good for business. So, we certainly support that. >> Got it. I wonder about events. >> Yeah. >> Are events more power law driven? Do you want to uh like raise the long tale of events? Do more events and try and elevate to something where there's a Metgala happening every week or something. I don't know where does the event strategy go. >> Events for us um are one of the fastest growing parts of our business. >> Interesting. >> Um but not because we're just doing more and more events. We're actually doing fewer events. than when I started. We're doing fewer events, but we're focusing on >> events that really are what we call cultural moments. Met Gala is a great example of that. >> You know, Met Galla was last week, you know, last Monday. >> Yeah. >> Um, you know, in the first seven days, I just saw the numbers last night, we had 3.1 billion video views of the content we created. >> That's remarkable. >> It is. It was up, I don't know, 60% over the last year. Isn't a lot of it like off the record too? Like there aren't necessarily I've never seen like you can't just live stream it. You can't watch what happens inside or like there aren't like microphones on the dinner table. >> We do a live stream of the red carpet. >> Yeah. Yeah. Yeah. Exactly. So it's it's even limited in terms of what you're sharing. >> The live stream had 200 million tune in to view it. >> That's amazing. >> Wild. >> So it it every year we do the Met Gala. >> Yeah. >> It just grows at a level that's hard to believe and we finish it and we go, "Oh my god, how are we ever going to exceed that next year?" And then it grows 65% again the next year. >> Wow. >> And it was the same thing for the Oscar party Oscar party this year. 65% growth year-over-year. >> Remarkable. >> So I think we found a playbook. Yeah. >> On that. But it's not a playbook where you can say, "Oh, great. Let's just do one a week." >> Yeah. >> You can't create cultural moments like that. >> What you can do, what we found is doing fewer and doing them at very high quality. >> Sure. >> Um and make them global events like the Met Gala is a global phenomenon now. >> Yeah. in a way that it wasn't, you know, seven years ago when I joined. It was an important, very important, >> you know, event that people in the US knew about and, you know, people in the fashion community around the world knew. >> Yeah. >> But by bringing the company together >> into one organization, now all of our brands globally promote it and promote the live stream and the content from it and that's really helped elevate it to become now a global cultural moment. >> Yeah. Interesting. Uh, help me. Uh, I don't know how much you'll be able to say here, but help me understand why BuzzFeed is worth something like 120 million. >> No, 240. That about half the company for >> Oh, half the company. >> Yeah. 24. >> Uh, what's the case? >> Revenues declining. Decent, you know, run rating 60 million a year of losses. Uh, I would guess an aging audience. Do you have any idea where the where the value is? Well, look, the only thing I read about that is there was like $20 million going into it. My understanding >> I thought it was 120. >> There's a valuation of that, but there's there's stage I you guys may have read about. >> Okay. Okay. Yeah. Yeah. >> But look, I can't speak specifics of that business. That was a business that did very well. They were very innovative >> around >> a different era of the internet when you could take >> search traffic and social media traffic and turn it into commerce dollars or other things. >> Yeah. That era is gone. >> Why? >> Why? >> Yeah. What killed that era? Like people are still spending time on social media. They're still searching on Google and yet publishers have not been able to monetize traffic or generate traffic from the thing is like I I look at BuzzFeed as like, you know, I I look at Nast. This is like luxury media. That is what that that's my personal view on it. It's like this is the LVMH of media and BuzzFeed was like a fast fashion. Just say you've never been to the BuzzFeed gala. >> But think think about it's really interesting. We we did this for a board meeting about six months ago. >> Took a snapshot of search results from I don't know seven or eight years ago. >> Okay. >> And what you saw were, you know, a few sponsored links and then the 10 blue, you know. >> Yeah. >> The traditional search page. >> Yep. >> Do the same search term today. You get an AI overview. >> Yep. >> Then you get rows and rows and rows of commerce links. >> Yep. >> And then you get Somebody somebody last week was saying, "How is search revenue up?" I was like, "Have you have you done a search recently?" >> I got I basically have to go to the second page to get an organic result. >> It's been good for Google. >> Yeah. Great. It's been great. Great for business. >> If you're a publisher, you've you page. So, >> um if you were if you had a business that relied on that >> to arbitrage that traffic to sell whatever, >> um that business got very very difficult. >> Yeah. Yeah. Yeah. So, you know, and look, the changes in search traffic have certainly impacted our business, >> but not to the point that we haven't been able to grow our revenues and grow our profitability, but it's a headwind. >> Yeah. >> But, you know, last year, so, you know, each of the last three years, we would do our budgets and we'd put some forecasts in of search traffic declining. You know, why? Just because we'd seen the pattern of algorithm changes and generally those algorithm changes were negative. They had negative impacts. So we're going to forecast it be to be down and then every year it was down more than we forecast. >> Yeah. >> So last year I told our teams assume there's no search. >> You have to have your business's planned >> as if search is zero. We don't expect it to be zero. >> Yeah. >> But we you know bank on it. We expect it to be a single digit percentage of our traffic. >> Very low. >> So we started working on plans for each of our brands around that. And some of the brands we looked at said they don't really have a good plan for that. Yeah. >> So, we're going to rep prioritize the ones that that do. And uh >> but if you know, if you don't have those paths forward, >> you know, if you don't have really strong authoritative brands or brands that have very strong niche in certain areas or direct audiences, >> um then you're just going to be fighting that all the way down. >> Talk about subscriptions, bundles, uh subscription pricing in a time when we have little spurts of inflation here and there. um how important has that been? How resilient has the subscriber model been? What are you seeing there? >> You know, it's um it's a it's a very important part of our revenue stream and what you know, our >> digital subscriptions grew 29% last year revenue. >> Wow. >> And um >> you know, they're growing double digit percentages this year. So, it's a really important growth area of our business. >> Yeah. And we're launching more digital subscriptions for more brand like Pitchfork, small brand, just launched a subscription earlier this year. Tatler, another small brand in the UK, launched it. But, you know, our big brands, the New Yorker, >> you know, very very strong growth. Vogue is showing incredible growth in digital subscriptions. >> So, that's that's an area that's important to us. And we think we've built up some really good capabilities both on the technology side, but then also on >> just the people capability side, too. >> Yeah. And then uh do subscribers get stuck in a mentality of I pay a certain amount and they're resistant to a price adjustment in a time of inflation or is there some price elasticity there? >> You know, we have um we have raised prices on subscriptions fairly materially over the last couple years. Okay. And >> you know each year we think okay we're raising the price we're going to the retention is going to go down and actually the retention has gone gotten better every single year. Yep. >> So, um, elasticity looks pretty good for us so far. >> Yeah, in some ways, uh, you know, and we're the biggest fans of independent creators on on Substack and other newsletter platforms. Like, we we really, >> uh, we have a lot of them on the show. We subscribe to a lot of them, but in some in some ways, they're helping you your guys' like pricing dynamic. And they're like, "Well, I want $20 a month for my newsletter that publishes, you know, twice a week." And I just kind of like write what I'm thinking. And you guys are like, "Well, we're going to give you, you know, all these stories and all this like video and images and and uh you know, these deeply research stories." And so your product or a subscription for one of the brands starts to look like incredible value because you're like the alternative, my dollars are going to go way less far with an independent creator in terms of volume of stories. Now you don't get the same dynamic that they have which people just like to support independent writers and content creators. That's a part of it. It's just you enjoy saying putting you know kind of helping somebody be in business. But um I think uh that's an interesting dynamic. Can >> you talk about uh the further nichification of media? Um Architectural Digest, The New Yorker. These are already not niche publications, but they have a category. Vogue, GQ, right? There's a there's a a theme to the to the product. Um, and what we've been tracking over the last couple of years is that uh the internet native media properties, the creators have been able to find even smaller niches. So, we've talked to uh someone who just does, you know, car reviews or just does uh the >> car dealership >> car dealer car dealer the car dealership guy was a good example of like that that would not be a national magazine, but he's made a business work there. And I'm wondering if there's opportunity for more niching or if there's value in not overning a product and how you're thinking about because you see all these niches and you think okay maybe there's a rollup strategy or maybe there's some sort of you know synergy between them but that's already sort of playing out on the platform in the sense that like YouTube is making money from both Doug Deurro reviewing every car and the car dealership guy talking about the dealer side of the automotive industry and these are separate from an automotive magazine. that might sort of in previous era address both sides. >> You know, I think where publications uh can get hurt is if they're caught in the middle. >> Sure. >> If you if you try to be too broad, too large of an audience, >> this is not the era for that. Yeah. >> You know, five years ago maybe that worked, but but not today. >> You either need to be large and authoritative in a big category. >> Yep. >> Vogue is a good example. >> Or architectural digest. >> Yes. or Kanye Traveler would be another one. Or you need to be >> really nailing a specific niche where you have a loyal audience that's willing to pay >> and and and you know ad supported only tough. That's that's if I if you are if you have a brand where you're investing in the journalism. If you have to make significant investments in journalism, supporting that just with advertising is is a tough place to be. But if you've got, you know, really content that people are willing to pay for, >> then but to do that, don't get caught in the middle. >> Yeah, that makes sense. >> Tough place to be. >> Uh, the devil wear Prada's uh The Devil Wears Prada 2 box office hit. Uh, do you expect that to be a pretty major catalyst for for Vogue? >> You know, it's uh it's actually actually been a catalyst for Kanye Nast broadly. you know, obviously the movie is, you know, based on Anna Winter and the company is based on Kand Nast and uh but uh you know, I was I was talking to our chief revenue officer a couple weeks ago and like you know we had a really good first quarter we exceeded budget and second quarter is looking strong and I asked her like you know what's driving the strength and she stopped for a minute she said the movie I said what movie >> wow >> like that's driving even other brands said I think there's just more interest in Connie Nast in general now I think it's more than just that. But, you know, I think the movie has created a lot of intrigue >> and uh and it's been fun. >> I imagine it's good for hiring, but can you zoom out and talk a little bit about the hiring pipeline? There's so much uncertainty in the job market. Should you become a software engineer? Are there going to be no software engineers? The AI can write stuff, but can't really do investigative journalism, but there's still a lot of anxiety. Like, how are you seeing the next crop of great journalists develop right now? >> Yeah. or advice that you give to like new grads who want to work at Nast. >> Well, you know, we hire journalists and we hire software engineers. So, >> and it's it's it's difficult >> and everything in between business and finance and legal. >> Um, look, >> you know, I remember my mom growing up, she always said there's always room at the top, >> right? And it was good advice like if you can be at the best of what you're doing, there's always going to be room for you. That's >> remarkable. Moms have the best. >> So good. Um so for us you know journalists who really excel I think they'll always have a home. >> Um >> you know in terms of software engineers you know we we we brought in a new head of product and technology >> really fortuitously in December and December was >> really you guys covered this very well was moment a stem function change. Yep. >> And so when he started you know I I told him you need to question everything we do. start with a blank sheet of paper, rethink everything that we're doing, how we do it, and how we can use AI. And the first thing he did is he started some small pilots, >> three or four people on a team, >> eliminating certain roles that that would have been on a much bigger team >> to create new products. And uh we he ran the pilot six or eight weeks and like there was enough information already >> where we said, "Okay, let's go make big changes now." And so we just, you know, last month made big changes in that in that org really centered around how we use AI at the core of not our content but how we develop technology and products. >> So you know the result of that is there there were whole departments that we no longer needed. >> Like we used to have a you might be a team of 10 or 12 people on a big project. When you have that big of a team you need a technical project manager, >> you need QA engineers. you need, you know, product analysts and all these other things. Well, we just redesigned it and said, actually, you have a product manager and they're going to be the product analyst also. >> Uh maybe there's a designer and there's an engineer and we're going to have AI create the software and also do the QA of it. And so these teams that were 10 or 12 people became three or four people and they moved at three times the speed. >> Um, so what does that mean? If you're software engineer, it means there's going to be fewer jobs for entry. Without a doubt, fewer jobs >> for now. But like if you're a product manager, you can do things that you could never do before because you can actually create the code yourself. >> Yeah. >> Using AI. >> Well, yeah. And cond NAS is a unique company because you guys don't sell technology. You sell content. And so you want to make great technology to serve the content, but it's not the core. that's not the thing that you sell. Whereas, >> um, yeah, we we've noticed something is that we basically we hired a full-time software engineer >> early in the company, Tyler sitting over there. Um, and we're, uh, uh, we're the kind of employer that never would have hired a software engineer historically because it for a small podcast at the time, why would you >> why would >> build software? >> Yeah. Why would you build custom software? And so there's job creation happening by companies that never made sense to hire software engineers, but now they can. >> Yeah. Cool. >> How are you thinking about I I imagine that uh at almost all the publications there's essentially no AI doing writing or or creative work, but uh how have you had to confront anything on the advertising side? Like I imagine if I flip over the back of the New Yorker, >> I'm sure I've seen a 3D render of a watch at some point. Will I be seeing a AI render of a watch? >> Very uh >> does that matter? Does anyone care? >> It matters what you know last June >> Yeah. >> There was an ad that was run in Vogue print magazine and the ad used an AI generated model. >> That's right. >> And it blew up. >> Yeah. >> But people who were angry, they were angry a little bit at the advertiser. Yeah. >> They're mostly angry at Vogue. >> Interesting. >> And I loved it. I thought it was fantastic because it reaffirmed what I hoped was going to be the case, which is our audiences want human generated content. Yeah. They want to know what they're reading and seeing is real and not AI generated. >> Interesting. So to me that was a really important indicator of frankly our future that our future strategy about using AI in many many places to drive efficiency to reach audiences faster speed up the velocity of what we do >> all to enable us to invest more in human generated content >> that that was a really >> yeah it's very especially clothing is really interesting there's um a slippery slope where let's say you generate you know you have a real piece of clothing and you say put this on this you know even if it's a model, but put this on this model and then what happens if like you know you could just prompt it and say make make it fit uh like slightly different. It's like well then now you're that's not the product that you're selling. You're now selling a product that >> doesn't really exist anywhere. So there's certain uh certain certain categories that I think will yeah um and just yeah it'll be a brand decision and I think um ultimately that that is why >> that is why I think uh >> your brands will will endure because there will be plenty that make the opposite decision. We're going to lean into it but there's always there's always room at each end of the barbell. Yeah. >> So, lots of care with regard to AI advertising. Zooming out, are are ads a bug or a feature? If I open up a copy of Vogue, >> well, in a print magazine, it's absolutely a feature. >> I think so. >> Yeah, without a doubt. I think for for digital, it can be both. >> Sure. >> You know, programmatic display ads >> may be more of a bug than a feature. >> Yeah. But you know really >> because it disrupt it's just it really it uh it's mostly the visual disruption of like I'm reading this like beautiful story I actually like integrated sort of a native ad from the publisher that was you know considered but anything that becomes you know display ads just the >> so our biggest advertising category is branded content. Yeah. And it's it's great because it it it it leverages a big competitive advantage we have. >> Sure. >> Our brands, our audiences, but our creativity. And so that's a that to me is a is a really great place to be in our business. And to see the growth of that every year, >> you know, of course we have display ads, we have print ads, some of which can be branded content. Um, a lot of video video ads. >> Yeah. >> Yeah. >> Anything else, Jordy? >> No, this was fantastic. This is fantastic. Really glad this work. We'll wrap the show right now. Uh, leave us five stars on Apple Podcast and Spotify. Sign up for our newsletter, tbn.com. And we will see you tomorrow at 11 a.m. Pacific, sharp. Goodbye.