While Meredith continues to operate editorial operations, Authentic Brands will look for new ways to extract value from the hard-won authority and prestige the SI brand has built up among its audience.
Authentic Brands CEO Jamie Salter told Variety future brand extensions could include medical clinics, sports-skills training classes, and a gambling business, to name a few.
Those wedded to traditional business models may bemoan this trend, but it doesn’t threaten journalism or well-loved brands.
It is a way to save them.
Sports Illustrated, and other iconic publications, has always possessed brand value that goes beyond the published word. Brand extensions are not new. National Geographic and Smithsonian run tours. Better Homes & Gardens is in the real estate business. Real Simple has household products. Time Out is building physical entertainment and food marketplaces.
But now, this new revenue model is evolving, expanding and beginning to take center stage, as it should. It’s time for media companies to stop being fixated on the losing proposition of chasing an ever-dwindling pot of ad dollars and embrace revenue diversification that requires a much wider framework and lens.
Doing so will take the pressure off journalism to turn a profit, and put the revenue generation responsibility squarely where it belongs: with executives charged with marketing, branding, strategic partnerships and business development.
This requires a major, but thoroughly necessary, mind shift. In order to protect journalism, what if media companies began to make the business case that their publications were vertical marketing engines at scale? They deliver an audience, optimize organic traffic, and relevant affinity-based brands. And not just to suit the needs of impressions for advertisers, but their own homegrown businesses and partnerships.
What opportunities might be unleashed by shedding the myopic lens of the traditional “publication business model” as the go-to driver for ad units, event sponsorships and other traditional media campaigns?
In fact, editorial may not even be the secondary or tertiary revenue generator.
What kinds of businesses -- obvious and non-obvious -- could be built off that type of platform? What do audiences, comprised of specific buyer personas and not just readers, really want?
Consider Active Interest Media, which publishes specialty enthusiast magazines and websites. The company has dramatically shifted its revenue stream over the past 12 years: 50% of revenue now comes from consumer and b-to-b events.
Additionally, the company, whose Equine group has an audience of 800,000, launched a roadside assistance and towing service for horse owners -- a market need the company discovered by engaging with its enthusiasts and listening to their needs.
Traditional roadside assistance services won’t take a job that involves towing a live animal, so there was an urgent need among horse owners. Because AIM had made a mental shift to pursue nontraditional business models, launching a service to meet that need was not a huge leap.
Adopting a brand extension mind-set opens up the possibility for media companies to leverage what is most important to them -- their ethos, values, audience -- to build different kinds of businesses consistent with their missions.
The key word here is consistency.
Readers who are loyal to media brands won’t tolerate the cheapening or exploitation of what is established, loved and authoritative. But in order to survive, thrive and protect the very journalism that has made these platforms incredible brands, managers and owners may need to do something quite contrarian.
They need to stop thinking about journalism as their primary product, and more as a critically important service financed by ancillary businesses.