Hearst President and CEO Reports Record Profits for Seventh Year in a Row

In his annual letter to employees, Hearst president and CEO Steven R. Swartz reported that the company had record profits for the seventh straight

Subscription News: Hearst President and CEO Reports Record Profits for Seventh Year in a Row

Source: Hearst

In his annual letter to employees, Hearst president and CEO Steven R. Swartz reported that the company had record profits for the seventh straight year. Hearst’s biggest profit centers were Fitch Group, CAMP, an aviation safety company acquired in 2016, Hearst Health and Hearst Transportation. These businesses represented 28 percent of the company’s total profit for the year, a number that has more than tripled over the last 10 years, according to Swartz.

But the news wasn’t all good. Despite the company’s profitability, revenue at $10.8 billion was flat. Swartz attributed part of this to the drop in revenue from Hearst Television group which had posted record numbers in the prior year due to the presidential election and the Olympics.

In his letter, Swartz noted that 2017 was a great year to be a consumer of media, but not so great for content producers and providers.

‘While platform companies like Google, Facebook, Amazon and Netflix thrived through their dominance of advertising and ecommerce channels, many individual media brands struggled to get their share of the advertising pie and consumers bought fewer television bundles or magazine subscriptions,’ said Swartz.

Swartz cited a number of factors contributing to the company’s success last year, including best-in-class journalism, tenacious programming, unique local editorial products, and getting readers to pay a fair price for their print and digital products. He noted that Food Network Magazine and HGTV Magazine are among their most profitable magazines. However, the magazine business still faces some challenges.

‘Still, the magazine business needs more change. With respect to many of our titles, we need the readers to pay more for the product. And we need to find a way to make digital subscription products work for magazines in the way that they are starting to work for newspapers,’ Swartz said.

‘Near the end of 2017 we agreed to acquire Rodale’s magazine business, with such well-established titles as Men’s Health, Women’s Health and Prevention. The addition of these titles will give our magazine business a shot in the arm and some new talent to help in our efforts to keep innovating and experimenting as we reset the business model for the future,’ added Swartz.

Subscription News: Hearst President and CEO Reports Record Profits for Seventh Year in a Row

Source: Hearst

Other highlights for the year include:

  • Fitch reported  record revenue.
  • Hearst Television won its ninth straight Walter Cronkite Award for outstanding political journalism.
  • Hearst Newspapers hit a milestone with group revenue from subscriptions – print and digital – and from digital advertising represented 57 percent of total revenue.
  • Traffic to Hearst Newspaper websites grew to 7 billion page views and 42 million unique users, representing increases of 12 percent and 60 percent respectively.
  • In a joint venture with Verizon, Complex developed three streaming shows, Everyday Struggle, Hot Ones and Sneaker Shopping, that drew more than 2 million weekly views.

‘The media landscape is not promising to get any easier in 2018, but I can’t imagine a company with a stronger team, a stronger and more diversified collection of businesses, and stronger balance sheet ready to meet these challenges,’ Swartz concluded.

Insider Take:

The media landscape is not an easy one to navigate right now, but Hearst’s diversification into a variety of industries and types of businesses will keep the company strong. It plans to leverage those areas where it is already experiencing success, make acquisitions that continue to diversify its portfolio, and shed or transform unprofitable assets. Hearst is not alone in competing against Google and Facebook for advertising dollars, but like everyone else, they’ll have to find the right mix of products, services and revenue streams to make up for advertising dollars that are no longer a slam dunk.

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