Trusted Media Brands Engages in a ‘Re-Startup’
CEO Bonnie Kintzer works to turn around a storied company.
Back in the day, President Ronald Reagan was fond of peppering speeches and statements with a mix of stats and bromides from one of his favorite sources: Reader’s Digest. To Reagan, a lifelong reader of the Digest, the 95-year-old magazine represented a powerful connection to his vision of America. Folksy, funny in a highly proprietous way, patriotic and conservative.
In the seventies, when Reagan was on the rise as a political leader, the Digest was at its zenith: The best-selling monthly magazine in the world, with 17 million domestic circulation and millions more through dozens of international editions.
Since then, though, Reader’s Digest hit on much rougher times. So it was interesting to hear from Bonnie Kintzer, the TMBI CEO, who told me recently that big things are happening at the company since she took over in 2014.
The company has eliminated its debt, grown digital revenue, grown print audience and has more than six million paying customers, Kintzer said.
“Six million paying customers is a good place to be. I call us a ‘re-startup,’ not a startup.”
Given the company’s strong built-in customer base, it’s not surprising that consumer revenue is Kintzer’s top priority. Indeed, it’s already about three-quarters of the company’s revenue. Consumer revenue covers a wide swath of things, from subscriptions to book sales, events, newsstand sales, licensing and more. Says Kintzer, “It is the engine that drives the company because it engages the customer with the brands on many different platforms, which in addition to revenue helps fuel new customer activity and acquisition.”
The last 20 or so years have been tumultuous ones for the company, which is now based in Manhattan after having been based in suburban Chappaqua, New York, for decades. In 1990, the company, then called Reader’s Digest Association, became publicly traded. In 2002, it acquired Reiman Publications for a whopping $760 million. The Reiman titles—including Taste of Home, Country Woman, Birds & Blooms and Reminisce—joined RDA mainstays including the flagship magazine and The Family Handyman in filling out the portfolio. In 2007, the company was taken private when it was acquired by Ripplewood Holdings for $2.8 billion, most of that debt. But the debt proved to be too much, and in 2009, Ripplewood’s investment was wiped out in a Chapter 11 proceeding. Kintzer took over after the company emerged from a second bankruptcy proceeding in 2013.
Now, she says, the debt has been eliminated, the company is profitable and cashflow positive and engagement is soaring. On the newsstand, for example, Reader’s Digest was up from 2014 through the end of 2016 by 6 percent, delivering an average of 173,510 copies per issue in 2014 and 183,988 last year. The competitive set average was down by 37 percent in that same period.
Both Reader’s Digest and Taste of Home have enjoyed significant audience growth, with Reader’s Digest up 6 percent per MRI over 2016, and Taste of Home up by 4.3 percent, year over year.
In conjunction with consumer revenue and audience growth, advertising is performing well for Trusted Media Brands, especially on the digital side, according to Kintzer. “Trusted Media Brands has experienced a 27 percent growth in digital revenue across our portfolio of brands and digital properties for the recently completed fiscal year,” she said. “In fact, digital advertising is the company’s fastest growing line of business.”
RD.com, she added, has enjoyed a 34 percent year over year increase in total audience and revenues have grown 66 percent percent year over year. And The Family Handyman has had nearly a triple-digit growth in page views over the past three years, going from about 12,000 per month, on average, to nearly 35,000 per month.
“It is one of the reasons that we have added over 30 new staff on the digital teams for everything from social media to audience development to digital video to ad tech in just the past 90 days,” Kintzer added. (Overall, the company has about 400 employees.)
The Family Handyman also raised its print ratebase to 1.2 million from its current level of 1.1 million effective with the September 2017 issue. This is the second rate base increase for the brand over the past year, and reflects a consecutive streak of 74 issues where it delivered a bonus circulation.