Sunday, December 12, 2010

The Atlantic Turns a Profit, With an Eye on the Web


How did a 153-year-old magazine — one that first published the “Battle Hymn of the Republic” and gave voice to the abolitionist and transcendentalist movements — reinvent itself for the 21st century?

By pretending it was a Silicon Valley start-up that needed to kill itself to survive.

The Atlantic, the intellectual’s monthly that always seemed more comfortable as an academic exercise than a business, is on track to turn a tidy profit of $1.8 million this year. That would be the first time in at least a decade that it had not lost money.

Getting there took a cultural transfusion, a dose of counterintuition and a lot of digital advertising revenue.

“We imagined ourselves as a venture-capital-backed start-up in Silicon Valley whose mission was to attack and disrupt The Atlantic,” said Justin B. Smith, president of the Atlantic Media Company, who arrived at the magazine’s offices in the Watergate complex in 2007 with a mission to stanch the red ink. “In essence, we brainstormed the question, ‘What would we do if the goal was to aggressively cannibalize ourselves?’ ”

What that meant more than anything else was forcing one of the nation’s oldest magazines to stop thinking of itself as a printed product.

Separations between the digital and print staffs in both business and editorial operations came down. The Web site’s paywall was dismantled. A cadre of young writers began filling the newsroom’s cubicles. Advertising salespeople were told it did not matter what percentage of their sales were digital and what percentage print; they just needed to hit one sales target. A robust business around Atlantic-branded conferences took off.

The strategy is not a cure-all template for troubled media companies, of course. The Atlantic, a tiny enterprise compared with vast corporate magazine empires like Time Inc. and Condé Nast, has only about 100 business and editorial employees and a circulation of 470,000. A scale that small means that a few million dollars could push the company over the top — an amount that would barely register on the balance sheets of many other publishers.

Since 2005, revenue at The Atlantic has almost doubled, reaching $32.2 million this year, according to figures provided by the company. About half of that is advertising revenue. But digital advertising — projected to finish the year at $6.1 million — represents almost 40 percent of the company’s overall advertising take. In the magazine business, which has resisted betting its future on digital revenue, that is a rate virtually unheard of.

There's a discussion of publisher David Bradley, who bought the magazine in 1999 and immediately drove it into the ground. Banging his head against the wall, he conceded failure and adopted the changes cited above, along with new editorial leadership. What's fascinating is the decision to turn The Atlantic into a blogging headquarters and destination for online readership (looks like a model to me, although NYT discounts it). Andrew Sullivan accounts for 25 percent of The Atlantic's traffic, and both Matthew Yglesias and Ross Douthat did well there before moving on. Megan McArdle is an interesting voice, and perhaps Ta-Nehisi and Goldberg add some utility, although not for me. Longstanding Atlantic writer James Fallows also blogs there. But it's mostly Sullivan that's interesting to me. No need to provide much background. He went so far overboard that even folks at The Atlantic questioned his sanity. That said, I don't ever recall the top editors questioning Sullivan during his years-long descent into an obstetric gynecology-induced paranoid personality disorder. He hardly
speaks for America, in any case.

That said, The Atlantic is a heavy-duty high-brow magazine, and while I don't blog it too often, I still respect it and enjoy reading it.

I can just do without all those lefty bloggers.

Added: R.S. McCain links: "Math Problem: If the Atlantic Monthly Makes a Profit of $1.8 Million a Year ..."


dave in boca said...

My wife subscribed and we get issues that I read from time to time. Of course, Sullivan has descended into gibberish difficult to disentangle any meaning out of unless you are fluent in his unknown language---gynecological paranoid personality disorder doesn't begin to cover this freak's issues with women in particular and life in general.

Goldberg and McArdle are the only two I read more or less faithfully, although Fallows is interesting as he spirals down into tomfriedmanism, a disease of hyping the PRC as the solution for the problems of our planet, evidence to the contrary notwithstanding.

Steven Givler said...

If the NYT is resisting it, then it's fine with me.