Digital Contributes Around One Third Of Hearst's U.S. Profits

At a time when it has become harder to find reliable data about the magazine industry's overall financial performance, information from individual publishers gains even more significance as a bellwether for the broader business -- especially regarding the critical subject of the transition to digital platforms.

On that note, digital businesses contributed over 30% of Hearst's total profits in the U.S. in 2015, according to Hearst President David Carey's annual letter to employees rounding up the past year.

It should be noted that this statement is not a financial sleight of hand: Carey stated that Hearst's overall profits are up in 2015, and even surpassed its profits in 2007, so digital is in fact contributing a bigger piece of a bigger pie (unlike other companies where digital's share increases proportionally, but only because the overall figure fell so much, reflecting big declines in print ads). Total digital revenues were up 35% in the U.S., although Carey didn't share a specific dollar figure.

Carey added that profits at many of the publisher's print operations were also up year over year, with some posting record earnings, while others were able to stage a comeback from a weak 2014. Meanwhile six out of seven of its overseas operations also beat the previous year's profits in their own currencies, although exchange fluctuations sometimes decreased their value in dollar terms. 

Carey wisely went out of his way to avoid any sign of complacency, however, pointing to the extremely rapid transitions now underway across the media landscape: “That's not to say 2015 was a walk in the park; in fact, I've never seen a more disruptive period in the broader media industry, with every sector being transformed: newspapers, music, books, magazines, advertising agencies -- and now television.”

Against this background it is only reasonable to expect even more rapid changes in the year to come, with a growing focus on mobile: looking ahead, Carey said he expects Hearst to acquire a “dynamic mobile solutions company,” and the company will also extend iCrossing's digital marketing services through acquisitions and partnerships.

Carey also revealed that Hearst plans to bring all its automotive properties under one roof, combining enthusiast titles Car and Driver and Road & Track with its Jumpstart Automotive Group online ad business to create Hearst Autos. The new group will also include Veretech, currently part of Hearst Business Media.

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