06 Mar AiroAV Antivirus Reviews: How Reader’s Digest transformed into a digital multimedia b…
When Bonnie Kintzer took the helm at the Reader’s Digest Association in 2014, she had her work cut out for her. The behemoth, which began as a magazine in 1922 and grew into a direct-marketing powerhouse, with offices in 45 countries, was going through its second bankruptcy in five years and was on life support, having failed to adapt to advances in technology or recognize the way customers preferred to interact with content.
The upshot: It was struggling with $100 million in debt and hemorrhaging red ink.
At the time, RDA was home to a number of books and video collections; its flagship magazine; DIY lifestyle magazine “The Family Handyman”; and Reiman Publications’ “Taste of Home,” “Birds & Blooms,” “Reminisce,” “Country Woman,” “Country” and “Farm & Ranch Living.”
Yet fewer customers were interested in buying the aging brand’s books and other home entertainment offerings, and revenue was declining rapidly, down more than 26% year-over-year.
RDA was not the first publishing company to struggle in the age of technology. With readers and ad dollars swiftly moving toward digital — in 2007 U.S. magazine publishing revenue totaled $49.3 billion; in 2015 it sunk 43%, to $28.3 billion — old-line print media companies universally were fighting for survival.
Bonnie Kintzer, CEO of Trusted Media Brands
Trusted Media Brands
To stay afloat, Kintzer, the fourth CEO in three years, was presented with a monumental task: to lead a bold rebrand of the company as part of its broader growth strategy to transform the business into a digital-first, multiplatform media company that could prosper.
Fast-forward six years and the brand is now profitable, with the company’s print and digital products reaching nearly 1 in every 4 adults in the U.S. What’s more, according to Comscore’s 2019 rankings, 1 in 3 of the company’s digital audience is a millennial, and 27% of millionaire households in America read or visit a Trusted Media brand property.
Out of the red
In 2017, just three years into Kintzer’s tenure, the company retired its debt, said a Trusted Media spokesperson in an email to CNBC, adding that from January 2015 to December 2019, total digital revenue grew by 98%, with a compounded annual growth rate of 19% due to Kintzer’s rebranding and digital initiatives.
The Reader’s Digest Association — renamed Trusted Media Brands to echo its transformative growth into a modern multimedia platform — is reaching more than 60 million consumers monthly across its print and digital platforms and new direct-to-consumer products, such as Family Handyman’s DIY University and Taste of Home’s Coffee, Cookware and Special Delivery subscription boxes.
Although the private company would not disclose revenue figures (Ripplewood Holdings took RDA private in November 2006 under a definitive merger agreement, acquiring RDA’s outstanding common shares at $17 per share and assuming its $800 million debt), it did say it expects a 6% increase in overall revenue in FY20 and 48% growth in digital ad revenue for FY20.
Strategic goals for growth over the next three years include expanding its video creation; growing its Trusted Studios content division; expanding its affiliate e-commerce, newsletter and book programs; and acquiring more digital magazine subscribers.
In September, Trusted Media Brands celebrated a milestone in the company’s digital expansion with the launch of its first digital-only brand, TheHealthy.com. The most recent ComScore release showed TheHealthy.com at 2,183,000 monthly uniques. The company plans to launch additional single-subject websites starting in 2020, using RD.com as an incubator for this expansion.
Transforming an iconic brand
Modernizing a then-93-year-old company known primarily for an American general-interest magazine was not easy, said Kintzer. “It was very bleak. Morale was tremendously low. I think there was a loss of pride that they couldn’t be successful.”
With an aging audience that was dying off, the company had been hemorrhaging profits since 2005 as it tried to shake its stodgy image. To cut its debt by 75%, Reader’s Digest began laying off its U.S. staff, selling off assets and rapidly extinguishing employee perks. Even the 700,000-sq.-ft. headquarters in Chappaqua, New York, built by the founders Dewitt and Lila Wallace in 1939, had been sold. The Georgian-style brick building, whose halls were once adorned with Monets, Cezannes, Van Goghs and Modiglianis, until the art collection was sold for near-$90 million in 1998 to stem declining profits — is now 64 mixed-income apartments, its sprawling, 116-acre campus a mix of commercial and retail space.
Reader’s Digest was in desperate need of a rebrand — fast.
The Reader’s Digest Association headquarters in Chappaqua, New York, was built in the 1930s and reflected the Early American architectural and decorating tastes of Lila Wallace. In 2004 major changes in the publishing industry led the Reader’s Digest management team to sell the property and relocate its headquarters to Manhattan. It has since been developed into 64 residential apartments.
Trusted Media Brands
The Harvard MBA was a promising choice to turn the company around: No stranger to the brand, Kintzer had already served a nine-year tenure at Reader’s Digest a decade earlier, as general manager of North America and president of U.S. Publishing. Under her tutelage she was responsible for a number of the company’s largest publishing and digital properties, including Allrecipes.com and “Every Day with Rachael Ray” (both later sold to Meredith Corp.). In between she served as CEO of Women’s Marketing, a media strategy firm serving emerging brands targeting women.
Charting a way out of the company’s second Chapter 11, Kintzer was convinced that Reader’s Digest still possessed two keys for success: Its products were still strong — “Pick up any ‘Reader’s Digest’ or ‘Taste of Home’ magazine and it was clear the editors had never lost sight of their audience,” said the CEO — and there was a floodtide of unmonetized…