Digital media companies are heading for a crash, Hearst Magazines president says

Two-thirds of the profits at Hearst Magazines are still coming from print. And unlike other magazine publishers, David Carey says he’s in no rush to change that.

“We reject this notion of ‘digital first,’ because we think that denigrates the core business,” said Carey, the president of Hearst Magazines. “We think there’s a lot of money to be made in the print business.”

Media businesses need a “moat” to protect themselves, Carey explained — Hearst’s is its collection of influential and credible brands, such as Cosmopolitan. And it’s becoming clear that some cash-burning web publishers don’t have much protecting them from failure, he said.

He questioned the durability of digital media companies that have historically been reliant on advertising. To last, these companies would need at least 25 percent of their revenue to come from non-advertising sources such as live events, data or e-commerce.

“These businesses that have been, early on, gaming the ad system to show 20 to 30 percent growth on small numbers — that’s kind of easy……in 2018, the rubber meets the road.”

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