In a memo to staff and other members of the media, Hearst’s CEO Steven R. Swartz detailed just how successful the publishing company was in 2017.
While revenue itself was flat at $10.8 billion, the business as a whole was profitable for the seventh consecutive year due largely in part to investments made in companies related to business data.
Our biggest majority-owned business, Fitch Group, led the way with an outstanding performance across the world, particularly in its core bond ratings business. Strong profit growth was also achieved by CAMP, the aviation safety company we acquired in late 2016, as well as Hearst Health, our portfolio of six essential healthcare businesses, and Hearst Transportation, our auto sector group. All of these businesses, which we collectively call Business Media, sell data and software that customers use in their daily activities, a powerful proposition in the increasingly cluttered information landscape.
In 2017 these businesses accounted for 28 percent of our total profit, a number that has more than tripled over the past decade, and one that will continue to grow over time. Our only regret is that we failed to make another big acquisition in this sector in 2017. We can only say it wasn’t for lack of trying.
He also mentioned the challenge of competing in a market where most of the ad dollars go to only a few players:
2017 was another great year to be a consumer of media products but less so to be a provider of that content. 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.
The memo highlights the acquisition of Rodale in late 2017, three digital productions produced with Complex that each received 2 million weekly views and its most profitable magazines over the last 10 years: Food Network Magazine and HGTV Magazine.
To read the rest of what investments and sales went well for Hearst in 2017, click here to see the full memo from Swartz.