Norman Pearlstine can no longer peel a banana with his bare foot.
“I lost my fastball,” said the chief content officer of Time Inc.
I read about the banana stunt when he was executive editor of the Wall Street Journal. Many years later, he needs new magic to save Time, Fortune, People, Sports Illustrated and 80 other print publications that are getting whacked by the digital age.
Pearlstine still savors a long print narrative, but he isn’t going to nobly preside over the demise of a public trust like Time, founded 92 years ago by two Yalies.
“If by public trust, you have to be resigned to killing your company, I’m not in,” Pearlstine said.
In case you’ve been on Mars, print journalism has changed drastically since the golden years of the 1980s and ’90s, when fat and sassy publications such as Sports Illustrated, Time, the Journal, the New York Times and The Washington Post printed money. The digital era has drained the business moats around most print products for the past decade.
“This is a tough time in the business and a tough time at Time Inc.,” said Pearlstine, sitting at his desk at Time’s Washington bureau, jacket off, sipping coffee. “We’re the fifth management team in five years. That destabilizes a workforce and makes it understandably suspicious of anybody new who comes in and is embracing changes that none of us came into the business thinking we’d be doing.”
Well, he isn’t exactly new. Not even to Time, where he was editor in chief in the late ’90s. Pearlstine is a longtime leading actor in the Wall Street-Washington big media drama.
He has experience managing internal crises at many publications.
His résumé includes developing the business plan for the Wall Street Journal Europe, launching a Dow Jones-Hearst co-production called SmartMoney (now dead), and working at the Carlyle Group, the big private equity firm. He has had top jobs at a pair of capitalist tools, Forbes (literally) and Bloomberg.
On a given day in 2012, the top editors of 16 publications, from The Washington Post to the New York Times, to Forbes, Fortune and Fast Company, had worked for Pearlstine.
“I’ve been in the business a long time and seen the changes. I can probably take a little longer view than other people do who are worrying about how many [unique visitors] they had last month or how many page views or something.”
I admire this about him:
At 72, he has suited up for another business challenge. No soft landing at a nonprofit. No sinecure in academia.
Months after he arrived at Time in the newly created job, the company shaved 500 employees from its worldwide workforce of 7,800, according to a report in the New York Times. Then Time Warner last summer spun off Time Inc., which reverted to a standalone publishing company. Time Inc. isn’t broke, but it isn’t growing. Print advertising in the third quarter was down 9 percent compared with last year. The company expects full-year revenue to be between $3.2 billion and $3.3 billion and operating margins to be between 15 and 16 percent.
Another quake struck in August with a report that Sports Illustrated personnel evaluations included a category called “Produces content that [is] beneficial to advertiser relationship.” Pearlstine said the wording was a mistake, but he doesn’t back away from the need for digital content that makes money.
“I don’t think you can say to a reporter that you should be writing stuff for the benefit of advertisers. But as an editor who’s a steward of a publication who has to go down on head count, do I have the right to choose to keep the reporter that is generating a lot of traffic . . . as opposed to the guy who happens to have a beat that nobody’s reading? The answer has to be yes.”
Pearlstine’s success will be measured in large part by whether he can grow digital revenue faster than print revenue is declining. Every legacy news organization in the world is trying to crack that one. Only half a dozen titles out of Time Inc.’s 85, including SI.com, are seeing digital revenues outrun print’s decline.
For answers, he is pulling from the same playbook as everyone else: videos, expert digital teams, conferences. He has the advantage of some enviable assets to play with. Time Inc. delivers 33 million subscriptions in U.S. mailboxes each month. There are 150 million names in Time Inc.’s database. Eighty-five million to 90 million women a month interact with a Time Inc. print or digital product.
“Thinking about Time Inc. as a company with the assets . . . enables us to think about ways in which we can go after audiences that we’ve never done before.”
Everything is on the table, from a new wine app to expansion of Fortune magazine’s lucrative Most Powerful Women summit. How about Most Powerful Women Asia, Most Powerful Women Europe, Most Powerful Women Next Generation?
Pearlstine is also considering going places where other editors are less comfortable.
Let’s take what is known as native advertising, labeled as sponsor-generated content on Web pages. Those are advertiser-produced videos, images and articles that are integrated onto the Web page next to reporter-written stories.
“When I think about things like native advertising . . . there’s a part of me as a journalist that says, ‘God!’ But the reality is that if we think of advertising and advertisers as an important part of our business equation, we ought to be creating great stuff for them. Stuff that would make them want to be part of this adventure.”
One experiment is reassigning a talented creative director from Sports Illustrated’s editorial side and putting him on corporate advertising for other Time publications.
Pearlstine broke a taboo earlier this year when he authorized an amoeba-size Verizon Wireless ad on the cover of Time and Sports Illustrated, eliciting a stream of media coverage.
“The customers, the readers, the viewers get it. They know that’s part of the business. There’s no effort to deceive.”
Those lines are pretty clear.
“Where it gets tricky . . . ” he says, pausing. “I’ll give you one that involves your owner.”
He tells me a story about Amazon.com, the online retailer founded by Jeffrey P. Bezos, who bought The Washington Post from the Graham family in 2013 for $250 million.
“Amazon came to us and said, ‘We’d like to do a gift guide in your magazines. And what we’d like is for your editors to choose the gifts. But we’d like them to be something you can buy on Amazon.’ ”
“I said, ‘Okay. I’m all right with that. But I want to label it. I just want to be transparent. I want to say, “Gift suggestions from the editors of Time Inc. for Amazon.” ’ ”
Amazon ended up buying a seven-page supplement that ran across Time Inc.’s weeklies, including Sports Illustrated, People and Time. Each magazine’s editors selected their own gift guide for that publication. Across the top of each page was printed: “Special Supplement from the Editors of [name of magazine] for Amazon.”
I asked Pearlstine what he called this.
“I don’t know what it is,” he said.