Yale School of Management

Hearst Magazines International 2015

Overview:

George Green had headed an effort to expand Hearst's publishing empire beyond U.S. borders. Starting in 1989 with a slim list of international titles, he and his team had extended Hearst Magazines International (HMI) around the globe. By 2015, Hearst International Magazines had 304 editions in 81 countries, with an extensive investment to develop related websites, apps, and events. As a privately held company, Hearst did not reveal its financials, but President and CEO Steven Swartz in his annual review to employees described 2014 as continuing Hearst's "record revenue and profit for the fourth straight year. Our major businesses all posted profit gains for calendar year 2014."

In spite of its ongoing success, Hearst International Magazines faced challenges in 2015. Two issues were particularly pressing –new laws in Russia that limited foreign ownership and the continued rise of online channels.

Russian laws limiting foreign ownership of media had been signed by Russia's President Putin in October 2014. The legislation limited foreign ownership of media to 20%. Unlike earlier restrictions on foreign ownership, which had focused on radio and television, the new law also applied to print publications, even to glossy magazines like Cosmo. The implications of the law and the implications of the term foreign "control" were not yet clear, but Cosmopolitan and other HMI Russian publications had to complete transactions by January 2016. What were the best approaches to doing business under the new regulations?

The second issue facing HMI cut across all of Hearst's publications – how best to function in a world where readers and advertisers were shifting to internet sources, particularly how to engage readers and create revenue streams through social media. Many social media sites, from Facebook to Twitter, to Snapchat, to Instagram, to Pinterest, to new sites that had not yet emerged, target audiences that were also HMI's readers and buyers of HMI's advertised products. Social media advertising was also changing rapidly, and advertisers and publishers were scrambling to find their place in the rapidly evolving landscape. Was online material a supplement or a substitute for printed media? How much overlap in content should there be between print and online and between different social media sites? How do publishers and advertisers use the new metrics available from online sources?

Format:
Raw, online
Teaching Note:
No
Suggested Citation:

Jean Rosenthal, David Bach, Nathan Novemsky, and Jaan Elias, “Hearst Magazines International 2015,” Yale SOM Case 15-014, June 3, 2015

Keywords:
  • Russia
  • Internet
  • Publishing
Perspectives:
  • Competitor/Strategy
  • Innovation & Design
  • State & Society