Condé Nast CEO Explains Why Human Journalism Wins in the AI Era

Anyway, uh, we have the perfect guy to ask.

I don't know if he's gonna comment on any of this, but we can certainly try and ask him about it, uh, because we have Roger Lynch, the CEO of Condé Nast, with us here in the TBP and Ultradome. Roger, great to see you again. How you doing?

I'm all right.

Uh, for those— I mean, we were hanging out last week, but for those who don't know, uh, uh, introduce yourself. Let's go a little bit back in time, take us on your journey, and then we can get into all the hot topics in media. Sure.

Well, um, yeah, I've been CEO of CUNY Nass for 7 years, but prior to that I spent my whole career really in technology.

Yeah, and primarily a fantastic guitarist.

Thank you very much. That was my life's ambition.

That was an incredible performance. Uh, it's a little bit of just lore, I guess, but, uh, we, we can get into hobbies and, and things outside business. But, uh, yeah, take us back. What was the first job in media? How did you get to where you First job in media? Yeah, maybe that's a good place to start.

Well, I mean, it depends on how you define media. Really, I spent my career at the intersection of technology and media. So the first company that I ran was a broadband business. It was one of the first broadband businesses in Europe, going back to 1999. And literally, one of the first things we did is we did a deal with the NFL to stream live NFL games in 1999.

That's crazy. How much demand was there for that? For NFL in Europe at that time?

Well, the reason the NFL was interested in it, this is back when Paul Tagliabue was the commissioner. He came over to announce this, you know, crazy idea that we had, was they were trying to build the NFL in Europe and they had—

They're like, I hear people love football over there. Why aren't we making money?

Why isn't it our football? They had, I think there was a team called the Amsterdam Admirals at the time. There's a European football league they were trying to promote. Broadband was a really interesting technology, and I was really excited to see how it could be used to change how people consume content. And that's why we did that deal. And then I started an IPTV company, first video on demand IPTV, and then Sling TV, streaming TV. So, always sort of at the intersection of technology and media or content. Then I ran Pandora, the first company I ran that I didn't start.

I loved Pandora.

Pandora is truly, when I think of magical— when I think of magical— Very much so.

Yeah.

When I think of magical technology experiences in my childhood, I think of Pandora. I think of being in my garage with my dad. We'd be playing pool, listening to music, or tinkering on something.

I found so many obscure songs on Pandora. It was amazing. Was there some sort of unique opportunity with Pandora around treating it like a radio station? Because it feels like there was some sort of licensing deal on the back end that was not the same as Spotify or iTunes Store at the time, where—

Right.

—because of the trade-off. I remember, I must have been— intuitively at the time, I was like, OK, this is a fair trade-off. I'm used to going to iTunes, having to pay $0.99. Or I can just kind of roll the dice. Maybe I'll get my favorite song on Pandora. So I found myself on Pandora a lot.

Pandora took advantage of some rights that allowed them— compulsory rights allowed them to— stream all of that content. And, but, you know, one of the trade-offs was you couldn't choose the song. Yeah. And so they did launch a subscription— this is long before I joined— subscription service, but were late for that game. They were quite late for that game. By that time, Spotify already had a very strong presence and some of the other big tech companies were getting into it. But you mentioned AI. I mean, to me, one of the key things with Pandora was the way it combined human taste with AI. So we had a team of musicologists. And one of the, you mentioned, I've been a guitar player all my life. One of the best parts about that job is they were all fantastic musicians. So we do these company events and we'd play all the time. And these guys were so, and they were mostly men, were so good. But then we had the data scientists also, and they would take the work that the musicologists did and create their machine learning algorithms around that. And each of the algorithms they had, I can't remember now, 90 or so algorithms, each one would get tuned for every individual listener. So it'd be weighted a little bit more. Jordi likes this, John's like this. And so it creates a personalized experience. And to me, I still listen to Pandora. I also listen to Spotify. But when I want something, just to put something on and let it play, I'll go to Pandora because I think those algorithms still outperform. Yeah.

I mean, we've talked to the new co-CEO of Spotify, but that AI-driven feature, the promptable playlist, is just coming to Spotify. This year. And I'm sure it's souped up and powerful and stuff, but it is remarkable how long that internet radio— These things have long lives. I'm wondering about your view on durability in media generally. It feels like any time that there's some platform shift, there's endless think pieces about legacy media is dead, linear TV is dead, this is dead. Everyone loves to talk about that. But in your experience, how does the media industry actually change as technology arrives?

The media industry has a history of not changing quickly enough. And you can start with the music industry. Recorded music industry peaked in 1999. And then Napster— And that's sales revenue. Yeah, and recorded music industry.

We found out like last week or the week before that vinyl record sales are like something like 10% of streaming revenue, which sounds—

So vinyl records. So that's an interesting trend to talk about. But what the music industry did or didn't do is, and this is one of the big mistakes. And, you know, like most lessons that you learn, you learn the biggest lessons from your mistakes. What the music industry didn't do is look at how their customers were behaving and say, "Okay, let me craft my business around that." They said, "No, I don't like that behavior. I'm gonna change the behavior. Let me sue these teenagers in Iowa who are downloading music or sue the ISPs or their parents or whatever so I can change the behavior back 'cause I really like it when they buy CDs. That's really good for my business." That was disastrous for the industry. So, finally, once they had embraced downloads and then streaming, it started growing again. It's only just gotten back to the size it was in 1999, 27 years later.

There's more people and people still like music just as much as they did before. Of course. It's purely fickle. Of course.

But they fought it for far too long. And it's a mistake. Vinyl records have grown every year for the last 18 years, sales of vinyl records. And it used to be, people my age buying vinyl records and collecting them. Now there are as many people in their 20s buying them as there are people in their 50s or 60s buying them. A lot of people in their 20s don't even own a record player, but they buy the vinyl records. There's an interesting trend that we— and we see it a bit in our industry too, like young people buying physical magazines. Yeah. Yep. It's like, why? Well, I think it's a search for authenticity. I think when you have so much—

I got the paper right here.

Digital content that is in your pocket and it's all free or free to consume, it becomes less valuable and maybe less authentic to you.

And so— Yeah, and there's something that's always been missing from part of the experience of being a music fan, to never actually go and trade your dollars. I think people do like to vote with their dollars and express their interests and actually have this physical embodiment of their taste.

Well, they're doing it with live music. Now. That's where the money has gone. The money is, you know, really moved to live. It used to be, you know, in the '90s and '80s and everything, people would go on tour to support their record sales. And now it's the reverse. Release a record so you can go on tour and sell tickets.

And it feels like the in-person events, stadiums are getting— like the CapEx is just skyrocketing across the sphere. SoFi Stadium here in Los Angeles. There's like more and more ways to draw people in with like ever larger spectacles and these like shelling points where like, did you see Taylor Swift in the Eras Tour? Like, that was a key moment that even like the casual fans needed to find.

So after Pandora, talk about the journey into Condé Nast.

Yeah, it was, you know, we— I wasn't at Pandora very long because we sold it to SiriusXM. And, you know, I was thinking about what I wanted to do next. And I was fortunate enough to be in process on 4 different companies. 2 were in New York, 2 in LA, where we're from, LA. So, LA had a lot of attractions for us. And I was flying back and forth between New York and LA and having trouble deciding what I wanted to do. And my wife was like, "Usually, you're so decisive." I was like, "I know, it's really tough." And then I finally realized on one of these flights that when I'm sitting there, I had all the information on all these companies. Every time I'd go to the Connie Nassif I wanted to read about that. And that's literally how I made my decision. That's the most intellectually interesting to me. I'm going to go do that. But there were a couple of criteria I had for what I did next. One was, I still like the intersection of content and technology and distribution models. But non-exclusive content was going to be dominated by big tech companies. You know, music, films, TV, whatever. The stuff that I had been doing, it had all been non-exclusive. Like, I wanted to go somewhere where we had our own content, we had our own brands, we could control our distribution more. And so that was certainly one of the criteria, but also still the opportunity to innovate around technology, how you use technology to create new business models, distribution models. And, you know, Connie Nass really fit that well.

Yeah. Yeah, there is this interesting, I mean, we've talked about this a ton because, uh, you know, thinking about all the new categories of media, which we joked about, we put out this, uh, really like unhinged market map of, of media, uh, as a joke. And then unfortunately people, we like called ourselves neo-traditional media, which was a joke. And then now people will tell us and be like, you guys are a pioneer of neo, neo-trad media. We're like, we created that category as a joke. Um, uh, but, but something that we've, I think what I've come back to over and over is just the value of these legacy brands that have been built across decades and how, you know, take away like the business models and how those are evolving. Like, it just seems like the value of a Vanity Fair or a Vogue or The New Yorker are shockingly durable because we're just— you can make more of these kind of properties, but you need decades. right? And so I'm wondering your strategy around kind of how you think about counter-positioning these brands against the content that is flowing so freely across— You're referring to the trough. What's that? Oh yeah, yeah, yeah. The trough of social media apps. But yeah, but yeah, like even, you know, I've also talked about the, —challenges with Substack around certain stories. Substack, if you're an individual selling a subscription, it wants— it will reward people that publish multiple times a week that sell a subscription. And yet there's so many stories that take months to tell. There's great stories out there that you'd want somebody writing, spending a year on it.

Seymour Hersh is not going to break the My Lai Massacre on Substack.

And so there's this opportunity of like the value of brands and curators that is maintained. And we're not creating— we are, like, again, I would say we're creating new iconic media brands, but it'll take, you know, 20, 30 years, right? It's just, you cannot do it overnight. And then how these things can operate as platforms where there are a lot of super talented writers that shouldn't be trying to publish every single week because their calling is to publish maybe once a month or even once a quarter at different points, right? And finding those lanes. I'm curious about how you're thinking about the role of the different brands under Condé Nast and, you know, counterpositioning against platforms like traditional social media or Substack.

Look, I think you bring up a really good point about Substack in particular, which is it is a great platform for certain creators. Yeah. And if you are, if you want to be on that bit of a hamster wheel, meaning, but it may not feel like a hamster wheel to a lot of people. Like they love to publish content. Multiple times a week, that's great. It's a great platform for that. If you want to spend 6 months, 12 months deeply researching something, Substack is not the medium for that. It won't reward that behavior. The New Yorker is. It really is. And we get rewarded for that by our subscribers. When we come out with these really deeply researched investigative pieces that, you know, we have a huge army of fact-checkers at New Yorker that comb through every single word in that so that when it is published, it has really, really been thoroughly fact-checked. When we publish that, we see the numbers spike on subscriptions. Our subscribers reward us for that type of journalism in a way that I don't think works so well with Substack. Other things work really, really well with Substack.

Yeah, yeah. That said, there's been, there's been, uh, you know, we, we're, we cover tech primarily, so we've seen a lot of people from tech leave about the sort of like brands or platforms to go to Substack. And some of the times they come out and they're just scooping every single day, and it's amazing. But more often than not, I'm like, I actually wish that at least a few of you guys would go to one company and I could subscribe to you and you weren't feeling this pressure. And I don't actually want— like, for a lot of people, I'm like, I think selling ads is a waste of your time. You should just be writing. And a lot of them feel that. And then the hamster wheel thing, I was talking to, you know, really big Substacker yesterday and they were feeling that. They were like, I don't want to publish every day, right? But you built a business around that and then you're sort of like trapped to this business model. So anyways, I think we're gonna, I've said it, I think in this age of AI and this age of slop, and sort of like ultra-fast media. I believe that being a true journalist, being a reporter, being a writer is only gonna— I think it was always relatively high status, but I think it will even go up and up and up over—

And become more valuable.

Yeah, and it's more valuable. It's like we want people that are doing original journalism, fact-finding. It's so essential. And then also, yeah, just spending the time. I mean, we're sort of a symptom of the internet, right? Ultra-fast content, right? I don't expect people to watch most of any of the shows from last week, right? Maybe there's some interviews that are sort of durable, but the majority of the commentary, it's just, it comes and goes, right? We expect people to watch it in the 24, 48 hours that we create it. But there's so much content that I think about, you know, sitting down on a Saturday where I'm like, well, maybe I want to read. I have limited time. Maybe I want to read something that somebody put 6 months into.

Look, I think it's important to know what you're good at and take advantage of that and not try to be something that you're not good at. And you guys are really good at exactly what you just described. And so you've made the most of that and you've attracted a really important audience and it's really worked for you in a business model. For us to try to chase that would be to move away from what we're really good at and try to become something different. And I agree with you. I think where, you know, with the amount of AI-generated content or low-quality content that is being flooded into the market, that only, I think, accrues to the benefit of companies that can really stand out from that. And so don't try to be that. Like I always tell our, you know, we're gonna always have human-created content. First of all, I think it's what our, I know it's what our audiences expect and want. Secondly, we have no competitive advantage over just creating AI-generated content. That doesn't leverage any of the advantages we have. And so knowing what your advantages are competitive and really building upon that, I think is always important in any business. And for the industry changes that are happening right now, I think there's real value in it because unfortunately there's gonna be fewer places that can do that because the ones that are more marginal may not survive the changes that are happening. And, you know, our brands have been really thriving in it.

How do you compare your philosophy of running like a house of brands versus, let's say, an LVMH? Is there similarities, differences? What is the philosophy?

Yeah, I mean, when I first joined, I spent a lot of time talking to those companies to try to understand how they were organized because one of the things I had to figure out is what I wanted to do with the way we were structured because we were structured very differently. Really a loose collection of companies all around the world. Every country operated entirely independently from every other country. Wait, really? Oh my God, it was crazy. There was no technology collaboration. There was no— they competed, literally. I remember literally 3 weeks into the job, I start traveling. I go to Milan. I'm trying to visit all our different offices. I get a call from My assistant, like, "Some of the team in Milan is upset you're not visiting." I'm like, "I'm in the office. I'm here visiting them." The wrong office. I found out we had 7 offices in Milan. Condé Nast US had an office there. Condé Nast Russia had an office. Condé Nast France had an office. All in Milan, all different offices. Because of course, they couldn't be in the same office because they were competitors. Yeah. So, a lot of changes to make in that model. But look, actually, it was a great strategy. When the company was a print publication business. It worked by definition. Conde Nast became a very big, successful company following that strategy. But it was not the right strategy for the internet age and a digital age and how audiences had changed. Audiences moved from, oh, I read my local newspaper, my local content, to I want to see what's happening around the world. I want to consume content from Korea or China or Sweden or Israel or wherever. Much more cosmopolitan in their approach to how they consume content. And so really, we use that as a guidepost to say, okay, how should we structure ourselves? And just question everything about how we organize ourself and even the culture of the company, which was very, very territorial and fiefdom-based to what it is today, which is much more collaborative.

So obviously, plenty of efficiencies across the portfolio geographically, the brands are power law driven, right? You have a few brands that drive the vast majority of the revenue. Have you been in a portfolio expansion period or portfolio contraction period? Is there benefit to going more focused around the tentpole brands or do you want to expand further? How are you seeing like the—

What we find is— Scope of the business. Certainly our largest, most important brand brands have done very well in this. Vogue is our largest brand. Vogue has grown every year I've been at the company. It grows revenue, grows profitability every year. And— Thank you. Good news. Good news for you. It is good news. And the New Yorker also. The New Yorker just had its most successful year ever by a long shot. Those brands, whatever's happening with search algorithms or AI, they seem to just be able to rise above it. Sure. We have smaller niche brands, Pitchfork, a music brand, very small, it's 1% of our revenue, but it has a very strong loyal audience in the category that it covers. It's doing very well. And so there's this sort of barbell effect that's happening, at least within our portfolio. And then we have some that are in the middle that are impacted more. Either they don't have as strong authority in the category, or they're a little too broad that they don't go deep enough in a specific way.

Yeah, we were just talking about BuzzFeed, and it felt like for a long time it fell into that category of decent-sized audience, but ultimately built on shaky ground of another platform without that really strong core audience that would stick around through thick and thin.

How do you think about talent identification going with sort of discovered talent, let's say a writer who's established, that already has a following versus somebody who has a lot of potential but maybe hasn't had a breakout moment yet? And then the same thing with executives.

Yeah, I think, first of all, for writers, we're a great home for the best journalists in the world. In part because, I wouldn't have thought this was a necessary competitive advantage several years ago, but it is today, which is that we're not impacted by political influence. We're not under the FCC's thumb. We don't have licenses that they need. We're not trying to buy Warner Discovery and need merger approval. And so, and we're owned by a family that's owned Cunningham for 7 decades. That, you know, I've been at the company now 7 years and not once have they ever called to interfere with anything we do. Therefore, I don't need to do that with our editors. We can just hire the best editors and stay out of their way and let them do their job the best. So that is very attractive to journalists, because they know when they come to our company, they're not going to get a call from the CEO or the board or whatever about, why did you say those things about this advertiser or whatever it is? No, the journalism comes first and will always come first. So that helps us attract very established writers. But at the same time, we also are a great place for people earlier in their career to learn because they can learn from the best. So we always try to make sure that we are recruiting really high potential new journalists into the company as well as, you know, the best external. In terms of executives, you know, other than Anna Wintour, every other executive has turned over since I joined the company. Every single one. And I did most of it immediately. And two reasons. One, if you want to effect culture change, change people. Change people that don't reflect the culture that you want to have. And when I got to Condé Nast, I felt like this is not the culture of— there were great things about the culture. The focus on excellence, really, really deep at the company. Company. But there are other aspects of it, very internally competitive and political that I didn't like. And I just decided, I want to create the culture of a company that I want to work in. So, let me find people who think similarly about the importance of culture. And then secondly, because we were going from— like in the US, it had its own CEO as a separate company from the rest of the world. It was very focused on the US market. I wanted people people who had much more global perspective and global experience. And so the skill set I wanted to be broader than what the company had traditionally had.

Probably 2018, this idea of content to commerce got incredibly popular. And even by the time we were starting this show—

You're thinking New Yorker protein powder. When's it coming?

Yeah, yeah. Love that. But even when we were starting this show, a lot of people said, wow, you have this audience of entrepreneurs, why don't you build your own software and spin out software companies or develop stuff internally? And we said, with what hours in the day are we gonna do that? And why would we deserve to win over a team that is entirely dedicated to a certain problem? Where has content-to-commerce worked within Condé Nast? And where have you experimented or avoided it?

You know, if you think about from an advertiser perspective, the reason advertisers have always come to Condé Nast is the influence that we have with audiences, right? That, you know, whether it's fashion or travel or home, you know, it's the influence that we have. Now, you know, that was very, very true in the print era. It's very true today. But they also had many more avenues to reach audiences than they used to. So for us, when we look at commerce, we think that ability to influence audiences certainly exists even more than before because of how much larger our reach is. And so we can use that maybe not to create the New Yorker protein powder, but to sell fashion, to sell travel, And so we've been investing in commerce, but not creating our own products per se. Partnerships. Yeah, in partnerships. And that also has grown every year. And we announced, it'll be launching soon, an initiative we announced last year called VET, which is really at the intersection of certainly e-commerce growth, social commerce in particular, and the creator economy. And so what VET is, We have relationships with all the luxury fashion companies. We're using those relationships, creating a marketplace commerce platform that then creators can use to connect with their audiences. And so we'll be working with initially a small number of real tastemakers in fashion and then using the relationships and the technology we've built to create this creator marketplace. A place called Vet.

How do you think about journalists becoming influencers? Can be great, develop their own audience, and then that draws more people into their stories when they do have something to publish. Double-edged sword because if they leave, they have an audience that might sign up on day one. They might say something that doesn't necessarily represent the views of the publication. There's sort of— some organizations have gone back and back and forth on it, either saying everyone needs to be posting on Instagram every day to you can never post on Instagram any day. How have you toyed with that or dealt with that tension throughout your career?

Because we have, as you said, a house of brands, our brands are very different. So a journalist for The New Yorker may be very different than a journalist for Vogue in their approach to that question. Have hard and fast rules that we would—

So no one size fits all?

Definitely not one size fits all. But we do know that journalists that are able to build profiles for themselves tend to be good for business. So we certainly support that.

Got it. I want to talk about events. Yeah. Are events more power law driven? Do you want to raise the long tail of events? Do more events and try and elevate to something where there's a Met Gala happening every week or something? I don't know.

Where does the event strategy go? Events for us are one of the fastest growing parts of our business, but not because we're just doing more and more events. We're actually doing fewer events than when I started. We're doing fewer events, but we're focusing on events that really are what we call cultural moments. Met Gala is a great example of that. Met Gala was last Monday. In the first 7 days, I just saw the numbers last night, we had 3.1 billion video views of the content we created. That's remarkable. It is. It was up, I don't know, 60% over last year.

And isn't a lot of it off the record, too? Like, there aren't necessarily— I've never seen, like, you can't just livestream it. You can't watch what happens inside, or there aren't microphones on the dinner table. We do a livestream of the red carpet.

Red carpet. Yeah, yeah, exactly.

So, it's even limited in terms of what you're sharing.

The livestream had 200 million tuned in to view it. That's amazing. Wow. So, every year we do the Met Gala, it just grows at a level that's hard to believe. And we finish it and we go, oh my God, how are we ever going to exceed that next year? And then it grows 65% again the next year. Wow. And it was the same thing for the Oscar party, Vanity Fair Oscar party this year, 65% growth year over year. Remarkable. So I think we found a playbook on that, but it's not a playbook where you can say, oh, great, let's just do one a week. You can't create cultural moments like that. What you can do, what we found is doing fewer and doing them at very high quality and make them global events. Like the Met Gala is a global phenomenon now in a way that it wasn't, you know, 7 years ago when I joined, it was an important, very important event that, people in the US knew about, and people in the fashion community around the world knew. But by bringing the company together into one organization, now all of our brands globally promote it and promote the livestream and the content from it. And that's really helped elevate it to become now a global cultural moment. Yeah, interesting.

Help me— I don't know how much you'll be able to say here, but help me understand why BuzzFeed is worth something like $120 million.

No, $240 million. He bought half the company for one time.

Oh, half the company. Yeah, $240 million. What's the bull case? Revenues declining, decent run rating, $60 million a year of losses. I would guess an aging audience. Do you have any idea where the value is?

Well, look, the only thing I read about that is there There was like $20 million going into it, as I understand it.

I thought it was $120.

There's a valuation of that, but there's a stage— Oh, a lot of that.

You guys may have read in the blog. Okay, okay, yeah, yeah.

But look, I can't speak specifics of that business. That was a business that did very well. They were very innovative around a different era of the internet when you could take search traffic and social media traffic and turn it into commerce dollars or other things. That era is gone. Why? Why? Yeah, what killed that era?

Like, people are still spending time on social media. They're still searching on Google. And yet publishers have not been able to monetize traffic or generate traffic for the activity.

My thing is, like, I look at BuzzFeed as, like, you know, I look at Condé Nast. This is, like, luxury media. That is what— that's my personal view on it. It's like, this is the LVMH of media. And BuzzFeed was, like a fast fashion—

Just say you've never been to the BuzzFeed Gala. But think about—

it's really interesting. We did this for a board meeting about 6 months ago. Took a snapshot of search results from, I don't know, 7 or 8 years ago. And what you saw were, you know, a few sponsored links and then the 10 blue, you know, the traditional search page. Do the same search term today, you get an AI overview. Then you get rows and rows and rows of commerce links.

I was saying, somebody last week was saying, "How is search revenue up?" I was like, "Have you done a search recently?" I basically have to go to the second page to get an organic result.

It's been good for Google. Yeah, it's been great.

It's been great for business.

If you're a publisher, you've gone down a page. So if you had a business that relied on that, to arbitrage that traffic to sell whatever, that business got very, very difficult. Yeah, yeah, yeah. So, you know, and look, the changes in search traffic have certainly impacted our business, but not to the point that we haven't been able to grow our revenues and grow our profitability. But it's a headwind. But, you know, last year, so, you know, each of the last 3 years, we would do our budgets and we'd put some forecasts in of search traffic declining, Why? Just because we'd seen the pattern of algorithm changes, and generally those algorithm changes were negative. They had negative impacts. So we're going to forecast it to be down. And then every year it was down more than we forecast. So last year I told our teams, assume there's no search. You have to have your businesses planned as if search is zero. We don't expect it to be zero, but we— Don't bank on it. We expect it to be a single digit percentage of our traffic, very low. So we started working on plans for each of our brands around that. And some of the brands we looked at said, hmm, they don't really have a good plan for that. So we're going to reprioritize on the ones that do. But if you don't have those paths forward, if you don't have really strong authoritative brands or brands that have very strong niche in certain areas or direct audiences, then you're just going to be fighting that all the way down.

Talk about subscriptions, bundles, subscription pricing in a time when we have little spurts of inflation here and there. How important has that been? How resilient has the subscriber model been? What are you seeing there?

You know, it's a very important part of our revenue stream. And what, you know, our digital subscriptions grew 29% last year revenue. Wow. And, you know, they're growing double-digit percentages this year. So it's a really important growth area of our business. And we're launching more digital subscriptions for more brands like Pitchfork, small brand, just launched a subscription earlier this year. Tatler, another small brand in the UK, launched it. But, you know, our big brands, The New Yorker, you know, very, very strong growth. Vogue is showing incredible growth in digital subscriptions. So that's an area that's important to us. And we think we've built up some really good capabilities, both on the technology side, but then also on just the people capability side too.

Yeah. And then do subscribers get stuck in a mentality of, I pay a certain amount and they're resistant to a price adjustment in a time of inflation, or is there some price elasticity there?

You know, we have raised prices on subscriptions fairly materially over the last couple of years. And each year we think, okay, we're raising the price, the retention is gonna go down, and actually the retention has gotten better every single year. So the elasticity looks pretty good for us so far.

Yeah, in some ways, and we're the biggest fans of independent creators on Substack and other newsletter platforms. Like we really, we have a lot of them on the show, we subscribe to a lot of them. But in some ways, they're helping your guys' pricing dynamic. Oh, yeah. They're like, "Well, I want $20 a month for my newsletter that publishes twice a week, and I just kind of write what I'm thinking." And you guys are like, "Well, we're going to give you all these stories and all this video and images and these deeply researched stories." product or a subscription for one of the brands starts to look like incredible value. Because you're like, the alternative, my dollars are gonna go way less far with an independent creator in terms of volume of stories. Now you don't get the same dynamic that they have, which people just like to support independent writers and content creators. That's a part of it. It's just, you enjoy saying, putting, you know, kind of helping somebody be in business. But I think that's an interesting dynamic.

Can you talk about the further niche-ification of media? Architectural Digest, The New Yorker, these are already not niche publications, but they have a category. Vogue, GQ, right? There's a theme to the product. And what we've been tracking over the last couple of years is that the— internet-native media properties, the creators have been able to find even smaller niches. So we've talked to someone who just does car reviews or just does— Car dealership. Car dealer. The car dealership guy was a good example of like, that would not be a national magazine, but he's made a business work there. And I'm wondering if there's— opportunity for more niching or if there's value in not over-niching a product and how you're thinking about— because you see all these niches and you think, okay, maybe there's a roll-up strategy or maybe there's some sort of synergy between them, but that's already sort of playing out on the platform in the sense that like YouTube is making money from both Doug DiMuro reviewing every car and the car dealership guy talking about the dealer side of the automotive industry. And these are separate from an automotive magazine that might sort of, in previous era, address both sides?

You know, I think where publications can get hurt is if they're caught in the middle. Sure. If you try to be too broad, too large of an audience, this is not the era for that. Yeah. You know, 5 years ago, maybe that worked, but not today. You either need to be large and authoritative in a big category Vogue is a good example. Or Architectural Digest. Yes. Or Conde Nast Traveler would be another one. Or you need to be really nailing a specific niche where you have a loyal audience that's willing to pay. And ad-supported only, tough. If you have a brand where you're investing in the journalism, if you have to make significant investments in journalism, supporting that just with advertising is is a tough place to be. But if you've got really content that people are willing to pay for, then— but to do that, don't get caught in the middle.

Yeah. That makes sense.

Tough place to be. The Devil Wears Prada 2 box office hit. Do you expect that to be a pretty major catalyst for Vogue?

It's actually been a catalyst for Conde Conde Nast, broadly. Obviously, the movie is based on Anna Wintour and the company is based on Conde Nast. But I was talking to our chief revenue officer a couple of weeks ago and we had a really good first quarter. We exceeded budget and second quarter is looking strong. And I asked her, "What's driving the strength?" And she stopped for a minute. She said, "The movie." I said, "What?" Wow. Like that's driving even other brands? I think there's just more interest in Connie Nast in general. I think it's more than just that. But, you know, I think the movie has created a lot of intrigue and it's been fun.

I imagine it's good for hiring, but can you zoom out and talk a little bit about the hiring pipeline? There's so much uncertainty in the job market. Should you become a software engineer? Are there going to be no software engineers? AI can write stuff, but can't really do investigative journalism. But there's still a lot of anxiety, like, How are you seeing the next crop of great journalists develop right now? Or advice that you give to new grads who want to work at company Nest?

Well, we hire journalists and we hire software engineers. So I can talk about both. And it's different.

And everything in between, business and finance and legal.

Look, I remember my mom growing up, she always said, there's always room at the top. And it was good advice. Like, if you can be at the best of what you're doing, there's always going to be room for you. That's remarkable. Moms have the best. So good. So for us, journalists who really excel, I think they'll always have a home. In terms of software engineers, we brought in a new head of product and technology really fortuitously in December. And December was— really, you guys cover this very well. It was Agent Milman. A step function change. And so when he started, I told him, you need to question everything we do. Start with a blank sheet of paper, rethink everything that we're doing, how we do it, and how we can use AI. And the first thing he did is he started some small pilots, 3 or 4 people on a team eliminating certain roles that would have been on a much bigger team to create new products. And he ran the pilot 6 or 8 weeks and there was enough information already where we said, okay, let's go make big changes now. And so, we just last month made big changes in that org, really centered around how we use AI at the core of not our content, but how we develop technology and products. So, the result of that is there were whole departments that we no longer needed. Like, we used to have— it might be a team of 10 or 12 people on a big project. When you have that big of a team, you need a technical project manager, you need QA engineers, you need product analysts, and all these other things. Well, we just redesigned it and said, actually, you have a product manager, and they're going to be the product analyst also. Maybe there's a designer, and there's an engineer, and we're going to have AI create the software and also do the QA of it. And so these teams that were 10 or 12 people became 3 or 4 people, and they moved at 3 times the speed. So what does that mean if you're a software engineer? It means there's going to be fewer jobs for entry, without a doubt, fewer jobs for now. But if you're a product manager, you can do things that you could never do before, 'cause you could actually create the code yourself using AI.

Well, yeah, and Condé Nast is a unique company because you guys don't sell technology, you sell content. And so you want to make great technology to serve the content, but it's not the core. That's not the thing that you sell. Whereas, yeah, we've noticed something is that we basically hired a full-time software engineer early in the company, Tyler, sitting over there. Tyler. And we're the kind of employer that never would have hired a software engineer historically because for a small podcast at the time, why would you— Build software. Yeah, why would you build custom software? And so there's job creation happening by companies that never made sense to hire software engineers, but now they can.

Yeah. Cool. How are you thinking about— I imagine that at almost all the publications, there's essentially no AI doing, right? Writing or creative work, but have you had to confront anything on the advertising side? Like, I imagine if I flip over the back of The New Yorker, I'm sure I've seen a 3D render of a watch at some point. Will I be seeing an AI render of a watch? Does that matter? Does anyone care? It matters.

Last June, There was an ad that was run in Vogue print magazine. And the ad used an AI-generated model. That's right. And it blew up. Yeah. But people who were angry, they were angry a little bit at the advertiser. Yeah. They're mostly angry at Vogue. Interesting. And I loved it. I thought it was fantastic because it reaffirmed what I had hoped was going to be the case, which is our audiences want human-generated content. They want to know what they're reading and seeing is real and not AI-generated. Interesting. So to me, that was a really important indicator of, frankly, our future, that our future strategy about using AI in many, many places to drive efficiency, to reach audiences faster, speed up the velocity of what we do, all to enable us to invest more in human-generated content, that that was a really—

Yeah, it's very— especially clothing is really interesting. There's a slippery slope where, let's say you generate, you know, you have a real piece of clothing and you say, put this on this, you know, even if it's a real model, but put this on this model. And then what happens if like, you know, you could just prompt it and say, make it fit like slightly different. It's like, well then now that's not the product that you're selling. You're now selling a product that doesn't really exist anywhere. So there's certain categories that I think And just, yeah, it'll be a brand decision. And I think ultimately that is why I think your brands will endure because there will be plenty that make the opposite decision. We're going to lean into it, but there's always room at each end of the barbell.

So lots of care with regard to AI advertising. Zooming out, are ads a bug or a feature? A feature if I open up a copy of Vogue?

Well, in a print magazine, it's absolutely a feature. I think so. Yeah, without a doubt. I think for digital, it can be both. Sure. Programmatic display ads may be more of a bug than a feature. Yeah. But really high quality—

Yeah, because it's mostly the visual disruption of like, I'm reading this beautiful story. I actually like integrated, sort of a native ad from the publisher that was considered, but anything that becomes display ads, just the—

So our biggest advertising category is branded content. And it's great because it leverages a big competitive advantage we have. Our brands, our audiences, but our creativity. And so that, to me, is a really— great place to be in our business and to see the growth of that every year. Of course, we have display ads, we have print ads, some of which can be branded content, a lot of video, video ads. Yeah. Anything else, Jordi?

No, this was fantastic. This was fantastic.

I'm really glad to see you do this work. We'll wrap the show right now. Leave us 5 stars on Apple Podcasts and Spotify, sign up for our newsletter at tbpn.com, and we will see you tomorrow at 11 AM Pacific sharp. Goodbye.