Publishers Diversify Their Businesses with Innovative Brand Extensions

There's certainly nothing new, or even particularly unusual, about magazine publishers trading on the public recognition of their brands to create new lines of consumer products and services. Back in the mid-1980s, for instance, Southern Living launched what would eventually become a very profitable cottage industry by selling architectural home plans to readers who wanted to literally live the lifestyle depicted in the magazine's pages. Today, the Southern Living blueprints are so popular they're sold from a dedicated call center. The average order price for a buildable set is $1,200, and the House Plans division now brings in over half a million dollars for the publisher annually. As the realignment of the publishing industry continues, a new normal seems to have emerged: one in which tenacious publishers must consistently create entirely new sources of revenue and extend their brands into new, profitable territory. In recent years, publishers have repurposed their content into new formats (ebooks, TV, streaming video, podcasts), launched thought-leader conferences and enthusiast events, and developed direct-to-consumer or affiliate ecommerce platforms. These nontraditional ventures have become nearly as important to publishers as the ad sales and subscription revenue they once relied on almost exclusively. Bonnier jumps feet-first into the streaming video land-rush. "Video seems to be a white-hot space in content for all brands these days," says Anthony Licata, the editorial director of Bonnier's Men's Group and editor-in-chief of Field & Stream. "We all see how consumers are watching more and more video online, on their mobile devices, streaming through their televisions. And so certainly that's a space our brands here have been pushing into." Publishers, take note: Thanks to the growing popularity of smart TVs and the near ubiquity of connected mobile devices, streaming video is not just the latest industry trend, but is poised to be one of the most crucial income generators of the second half of the decade. It was that hypotheses, Licata says, that led Field & Stream earlier this year to ink a revenue-sharing deal with Net2TV, an internet-based television programming company that teams with blue-chip publishers to create branded channels for so-called "smart TV" streaming players, such as Roku and Google Chromecast. Net2TV also streams its programming for free through a traditional website, Portico.tv, that's accessible to anyone with a high-speed internet connection. Bonnier's Men's Group, as it happens, is no stranger to video programming. A number of its titles have been producing short-form online videos for years now. Field & Stream has even partnered with traditional cable producers, like the Outdoor Channel, to create original TV content. "But the deal with Net2TV," says Licata, "was a very innovative way to expand the reach of video that we've already done." That's because the majority of Net2TV's Field & Stream content is curated from the brand's existing video. The Net2TV team edits that content, adds the occasional program host or voiceover, and then packages it into a unique show. Other Bonnier titles with branded Net2TV channels include Saveur, Cycle World, and Popular Science. And while the partnership is still too young to have yielded any usable metrics, Licata claims that Bonnier is viewing the experiment in terms of a long-term play. "I'll be honest," he says. "I don't expect huge numbers right out of the gate. But I think it's important to be there from the start, right there at the head, before things get too cluttered." Southern Living branches into home goods with a longtime advertiser. The 48-year-old Southern Living, currently one of the largest regional lifestyle publications in the country, has always been something of a forward-thinker in the brand development space. Along with its aforementioned house plans, the publisher launched two other Southern Living branded services some 25 years ago: a landscaping service and a network of custom homebuilders. According to executive marketing director Kristen Payne, "Our consumer has said to us for decades, 'We want to create the look [inside] our own homes that you show in the magazines.'" It was that interest, Payne says, that led to the title's first brand extension involving actual consumer goods: a line of licensed housewares now available at Dillard's department stores throughout the Southern U.S. Known as the Southern Living Collection, its duvets, dinnerware, and bath towels were ultimately the result of a close relationship with a longtime advertiser -- Dillard's -- that shares a nearly identical customer, demographically speaking, with the magazine. "The consumer is a perfect brand fit," says Payne. "It's basically the same woman." To construct the line, Payne and her staff developed a close collaboration with the Dillard's Home Division, which worked to translate trends from the pages of Southern Living into actual products. Launched in March of 2014, the collection has already proven successful by both brands' estimation. And in spring 2015, Dillard's will begin rolling out select pieces of Southern Living-licensed furniture items in some of its stores. As Payne points out, "We didn't come at this thinking, 'Let's have a bunch of products we can go to retail with.' We said, 'People want to live the Southern Living lifestyle. How do we help them do that?'" Hearst launches a subscription video-on-demand channel featuring tailored workout routines. When the Hearst Corporation created its Hearst Digital Studios division in mid-2014, the newly-created team had two primary objectives. The first involved choosing the perfect product to launch with. "We knew we wanted to be in the subscription video-on-demand (SVOD) business," says Chris Grosso, senior vice president and general manager of the Studios' video team. "Video is hot right now, and being Hearst, we have a long tradition in the subscription model." The second objective -- searching for categories within the Hearst empire for which SVOD would make the most editorial sense -- was a bit more nuanced, but eventually the Digital Studios team settled on the goal of fulfilling what Grosso calls "a real human need." At the time, one of Hearst's most powerful and internationally recognized brands, Cosmopolitan, was in the process of significantly beefing up its fitness coverage. "It's a key part of the empowerment message they're really driving," Grosso says. And so a partnership was formed between Cosmopolitan editor-in-chief Joanna Coles and senior health and fitness editor Liz Plosser to design an on-demand fitness and lifestyle channel featuring themed workout challenges. Known as CosmoBody, it now streams via iOS, Android, and on the web. Priced at $9.99 per month, Hearst Digital Studios president Neeraaj Khemlani describes CosmoBody as "Netflix for fitness and lifestyle content." Five- to 15-minute videos hosted by celebrity trainers in categories ranging from yoga to strength training represent the service's featured offerings, while new shortform videos covering Cosmo-specific editorial content, such as sex and dating advice, are added daily. Now that an entire platform to build subscription video products exists at Hearst, Grosso says the company is looking into a whole new series of potential streaming products, both internally and with external partners. "We're just evaluating where we see a really good human need and a powerful brand," he says, "and a space where we can come up with a programming concept that we think is going to resonate with consumers." With five retail shops spread throughout the globe, Monocle owns the means of distribution. Back in 2007, the staff of the London-based global affairs magazine Monocle was barely into its first year of publishing when it decided to partner with a Japanese accessories brand, Porter Yoshida Kaban, on a line of limited-edition travel and messenger bags. Monocle, which is published independently, was still such a small and intimate operation at the time that orders for its Porter bags were accepted only by email. Each individual shipping label was filled out by hand. Some seven years on, those travel and shoulder bags are still some of the most popular consumer items offered from Monocle, which now sells an incredibly wide range of both branded and co-branded housewares, accessories, stationary supplies, and even fragrances and clothing through its website. According to publisher Anders Braso, it was the London launch of what was intended to be nothing more than a Christmas-season pop-up shop that led to the magazine's most unusual brand extension experiment: a collection of five Monocle retail stores and two cafes that are now spread throughout the globe, in locales as far afield as Hong Kong and Toronto. And tentative plans to open further cafes -- there's currently one each in London and Tokyo -- are already in place, Braso says. "Of course, they add an additional revenue stream," Braso says of the retail locations. "But it's [also] very much a way to engage our audience in a different way, and an opportunity to redefine what our brand is about." Aside from its wall-to-wall coverage of entrepreneurship and international affairs, the Monocle brand has become especially well known for its high-end jet-setting sensibilities and its affection toward quality design, craftsmanship, and customer service. It's exactly those editorial values and opinions, Braso says, that have been translated so successfully inside the Monocle shops, which, along with ecommerce, now account for a full 15 percent of the company's revenue. "I do think it's important not to dilute brands," Braso offers. "I think you always have to ask yourself, 'Is this extension, or this diversification, right in terms of the wider augmented product? Is it something that will appeal to the audience?' And those are two checks we always apply." "I see [the retail stores] very much as an embassy for the brand on the street level," he adds. "And I don't think there are many brands that have that." Seventeen partners with Sears to offer a private-label clothing line for teen girls. The magazine division of the Hearst Corporation has been marketing branded and licensed consumer products for well over a decade now. Whether you've seen any of them or not, the $400 million worth of branded goods sold by Hearst licensees in 2012 alone are now seemingly everywhere. Good Housekeeping, for instance, has its own line of custom blinds and shades. Men's Wearhouse is currently the exclusive retailer of Esquire-branded shirts and ties. Car and Driver sells everything from automotive car accessories to lifestyle apparel online. But when Seventeen recently teamed up with Sears to create a line of clothing aimed at the magazine's teen girl demographic, the stakes were considerably higher. As Hearst brand development vice president Glen Ellen Brown explains, "Seventeen [has been] the category leader for over 70 years of young women's maturation into adulthood, if you will. We're their partner, life adviser, fashion authority -- you name it." In other words, staying true to the magazine's mission, while also respecting the brand and especially its reader, were all of paramount importance when constructing the Sears line. And yet according to Brown, Hearst's own research not only showed that such a partnership was viable, but that Seventeen's readers were enthusiastic about consuming the brand in alternate ways, especially where apparel was concerned. "So we found a partner that we felt had really deep expertise in creating apparel products for this particular young, millennial, teen customer," says Brown. One benefit of the consumer publishing industry's move away from its once rigid definition of church and state to a more blurred interpretation, Brown says, is that modern consumers are savvier than ever in terms discerning the line between pure editorial content and advertising. "There's research that will prove that a consumer knows when they're digesting content," she says, "and they know when they have advertisers that are providing content about their products." That, incidentally, is exactly what Seventeen has done on the Sears ShopYourWay ecommerce platform, where its new line is sold, and which is populated with quizzes, videos, and beauty and fashion tips. The line is also being distributed through brick-and-mortar Sears stores, and its revenue model, Brown says, is a classic licensing deal in which Seventeen will earn a percentage of the sales. The rights to the Seventeen trademark have been licensed to the line's manufacturing partner, Adjmi Apparel Group. Brown's advice for publishers exploring their brand extension options is simple and straight-forward. "I think the more strategic you are about understanding and living your brand," she says, "you're going to be spot-on. There's a reasonable level of brand extension that fits with the consumer profile, and you need to be smart about catering to those wants and needs, and exploring things beyond that concentric circle. You keep your ear to the ground, you stay focused, you listen well ... and then you build."

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Publishers Diversify Their Businesses with Innovative Brand Extensions

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