With the advent of digital media, traditional print media publishers have struggled to survive. The Economist, however, has bucked this trend and evolved to thrive on both print and digital media platforms. In this interview with Andrew Rashbass, former CEO of The Economist, we learn how the publication has come out stronger despite the disruption in print media
The last couple of years have been some of the most tumultuous for the world of media. In the early 2000s, the web disrupted the traditional model of print advertising causing major publishing houses to bleed. Disruptive and non-traditional online businesses, such as classifieds website Craigslist, started drawing away advertisers from traditional print publications further denting their business model. That wasn’t all. Next, the web forced publishers to question the relevance of traditional journalism and news delivery as new websites did a better job of breaking news online.
Today, there’s even more to contend with. If the disruptive impact of the web wasn’t enough, today publishers have to contend with a multiplicity of platforms, such as mobiles and tablets that are once again changing the mode of news delivery. Also, increasingly hyperlocal journalism has come into prominence.
Combined, these disruptive forces have led to several casualties. Newsweek, for instance, a very popular news magazine for over eight decades, suffered a fatal blow and finally discontinued its print edition in 2012.
Funnily enough, one publication—The Economist—has somehow bucked the trend of decline in print. The Economist, a magazine launched in 1843, has actually seen its print circulation grow in this tumultuous time. At the same time, it has also launched successful online and digital models that are also growing. The Economist seems to be a classic case of what management theorist Vijay Govindarajan calls ‘Box 1, Box 2 and Box 3 thinking’— manage the present (Box 1), selectively forget the past (Box 2), and create the future with breakthrough innovation (Box 3).
How has The Economist managed to buck the trend and stay relevant to its readers? How has it continued to grow its readership and circulation across platforms? Andrew Rashbass, former CEO of The Economist, attributes this to something he calls ‘lean-back 2.0’ thinking. During a recent visit to China, Rashbass sat down with CKGSB Knowledge’s Neelima Mahajan and explained how The Economist has continued to do well. (Ever since his visit to Beijing, Rashbass has stepped down from his post as CEO of The Economist. He is now with Thomson Reuters as CEO of its news agency and media business):
Q. In the last 10 to 15 years, the world of media has undergone the biggest disruption ever. The Economist, a brand that is 170 years old, has been able to weather the storm and actually come out stronger whereas most other brands have been hit very hard. How have you really managed to stay both relevant as well as profitable?
A. The thing about us as a company is that we are very lucky. Darwin said about evolution, that it doesn’t seek particular goals, it’s just that people who happened to be better, the organisms that are best placed, survive. It is very easy to sit and do the job I do and take all the credit for that. But actually, a lot of our success comes from things that are innate in the DNA of The Economist.
The very first article ever written in The Economist in 1843 was an article about Brazil. Back in 1843, no one was very interested (in Brazil), so the circulation back then was incredibly small. What (has happened) is that we have become relevant. It is not that The Economist has changed to become something different. The thing is that The Economist has always talked about issues around globalization, issues around the interweaving of politics and economics and innovation and science and technology and social trends, and The Economist is all about those connections. We’ve always done (those things). Then the world has kind of moved in our direction and that’s why we are relevant. We haven’t sat there and said that this is happening there in the world, and this is what we need to do to become relevant.
Q. As things stand today, how does your readership vary across the different platforms you are present in—print, online and digital, and how do you see those numbers changing? I’m sure the scales will tilt at some point.
A. A few years ago we identified that digital would be a big issue for us, and actually we had a realization that the distinction was actually not between print and digital, but between what we call ‘lean-back’ and ‘lean-forward’. That’s to say that reading is fundamentally a ‘lean-back’ experience. It’s something where you physically lean back, you spend a lot more time, it's immersive, you exclude distractions and you concentrate on this thing in front of you. We are finding that people who are reading our digital editions, are actually reading, if anything, longer than they are reading in print. In the case of the web, however, that’s much more a ‘lean-forward’ experience. It’s much more interactive: people are coming not just to hear what we have to say, but to meet each other, to share, to participate, to discuss and to debate.
In terms of the reading experience I had assumed that there would be a migration from print to digital. Our research showed us a few years ago that people expected quite a fast migration from print to digital. What we are finding is that the take up of digital reading is faster than we thought, but it’s not actually happening particularly at the expense of print. We are moving from a single platform world of print to a multi-platform world. What we call multiplatform is that some people are reading print and some people are reading digital.. We actually charge a premium if you want to receive The Economist both in print and digital. Of all our new subscribers, half are choosing to buy the premium offer, and of the remaining half, roughly a quarter (25%) are choosing digital only, 25% are choosing print only and 50% are choosing to have both. So it’s very much more this multiplatform world that we are seeing, and that’s been a bit of surprise to us.
Q. How does your audience profile vary across mediums?
Q. You still derive a huge chunk of revenues from subscriptions. How do you manage to do this at a time when most other publications which were still heavily advertisement-dependent, are really facing a hard time because ad revenues are down and subscriptions are unable to make up for the shortfall?
[This article has been reproduced with permission from CKGSB Knowledge, the online research journal of the Cheung Kong Graduate School of Business (CKGSB), China's leading independent business school. For more articles on China business strategy, please visit CKGSB Knowledge.]