Reader’s Digest Association president and CEO Mary Berner will announce an organizational shakeup and new responsibilities for top executives in yet another jolt for the bankruptcy-embattled company.
In the latest overhaul, to be announced Sept. 14, Alyce Alston will focus on developing new revenue streams as head of a newly created division called Emerging Businesses.
While running the company’s Home & Garden and Health & Wellness groups, Alston was behind some of the company’s new products, like Purpose Driven Connection, a multimedia collaboration with pastor Rick Warren; health and shelter titles Best You and Fresh Home.
As the publishing industry seeks to make up for the ad shortfall by growing consumer-paid content, Alston has been experimenting with various revenue models. She’s tested consumer-paid products including a newsstand magazine for walkers and related online club; services for diabetes sufferers; Dollar Savvy, a newsstand-only, ad-free title; and games and puzzles.
“I have some that are multimedia, ad-based, fee-based [and] marketing events,” she said. “The products aren’t just products but experiences and [are] innovative marketing.”
Like other companies that took on private equity financing before the economic collapsed, RDA has struggled under a crushing debt load since an investor group took it private two years ago. It’s slashed headcounts and cut the circulation and frequency of flagship Reader’s Digest.
In August, it filed a pre-arranged bankruptcy plan that involved cutting its debt by 75 percent to $550 million and giving ownership to a group of new lenders including JP Morgan Chase and GE Capital.
Alston said she didn’t foresee RDA shifting its reliance from ad revenue. But she sees growth potential in consumer-paid content, pointing out that RDA has a large amount of content that can be repackaged, distributed over new platforms and targeted to consumers using the company’s extensive customer database.
“We leverage a lot of content,” she said. “So if I can leverage those consumers, I’m halfway down the track.”
At the same time, the company is still looking for ad growth. The fledgling titles Best You and Fresh Home, while small, are ad-dependent. And RDA sees room to grow its Home & Garden properties, which include heartland titles like Birds & Blooms and The Family Handyman.
Previously run by Alston, they’ll now be part of a new unit run by Suzanne Grimes called U.S. Affinities, which will include RDA’s Food & Entertaining properties like Every Day with Rachael Ray and Taste of Home.
“These new moves are intended to enable us to bring our U.S. affinities closer together under one organization to drive growth and efficiency, as well as enhance collaboration, effectiveness and best practices among the various teams,” Berner said in a statement.
Grimes said she planned to increase the shelter titles’ revenue by leveraging integrated and digital sales teams she developed for the food titles. A standalone site for The Family Handyman, now just a channel on the Reader’s Digest site, is on the way. She also plans to ramp up efforts to sell advertising into some of the shelter titles, which only recently began taking ads.
“They have been a little bit less aggressive about it, so we’re going to put some extra muscle behind that,” she said. “We have the strength on the consumer side, and if you’re an advertiser…that’s what you want.”
The reorg is RDA’s second big one under Berner. When she took over as president and CEO in 2007, she reorganized the company around affinity groups to grow revenue by cross-selling related products to advertisers.
No jobs were eliminated as a result of the current changes, a company rep said. It also won’t affect the division that includes Reader’s Digest and which is run by Eva Dillon.