The Playboy Series: Key Tricks to Business Success

Christie Hefner, former CEO of Playboy Enterprise, wants someone to write a book about the things she decided not to do as head of one of the world’s leading erotic brands. “Everything I did always got so much hype around the company and externally from the media, but no one knows about the things I decided not to do,” says Christie. Like there was this one time, when Hard Rock Cafes and themed restaurants were all the buzz. “Every solid brand was coming out with a chain of restaurants and an agent came to me and proposed that Playboy come out with at themed restaurant too. The second he told me we could put my dad’s slippers on the wall,  I said heck NO.”

Listen

Being a good leader is about listening, says Christie. She found that most of her success at her 20 years at Playboy came from surrounding herself with an intelligent and diverse team of people to help her along the way. She also found that when the company was struggling in her earlier years, not everyone wanted to know every harry detail about how much financial trouble the company was in. “They just wanted to know how I was fixing it.”

Dare to Be Bold

Us college kids are in a new career-age, according to Christie. Before us, our grandparents and parents worked in the system with 3 stages of life: school, work, retirement (where all the fun stuff happens). Now, that idea is shifting and people don’t want to wait till they retire to travel the world, buy a boat or volunteer at the soup kitchen. So instead, people are working longer and retiring later to make room for their career and hobbies. “This is really cool because you kids have so many options. When I was growing up there was a set way things were done, but now.. heck you could graduate college and go work on a dairy farm in southern Wisconsin for a year before working on Wall Street and no one would think anything less of you.”

Learn

Education shouldn’t stop. “If you stop learning after you graduate college, prepare yourself for a long, boring, unfulfilled life and career.”

Exercise your Intellectual Agility

Christie talked about “intellectual agility” as the ability to adapt yourself in a business situation, not based on the skills you may or may not have, but based on your natural smartness. This means seeing the big picture, knowing your company (or magazine’s) identityinside and out. “You’d be surprised how it doesn’t even occur to many people out there to figure out a solution to a business issue. So many business professionals are just like machines. They do what their told, but thats it. I looked for that really sharp person who could think for themselves, imagine that.”

Measurable Progress

“Being a leader is always harder for good leaders than it is for bad ones because they have much more invested, they see the big picturemore clearly and they can foresee negative outcomes of their decisions.” Christie learned how to lead by talking to people lower down in the company. She started an internal newsletter system where every week she’d report her activities as CEO to show the company what progress she had made. “I’d sit down for the week and think  about what I’d done, and if I’d only made a few phone calls and had some meetings, well that wasn’t good enough. So I’d rehash out my goals and keep chomping at the bit until we made the change happen.”

Meeting with Christie Hefner last week (or a few weeks ago?) was an enlightening experience. When she spoke to our group of magazine journalists she addressed problems the publishing industry faced. When she spoke to a larger Newhouse journalism school audience, she talked about her career (and inserted some juicy stories). She also touched on two possible print and online media market solutions to solve the free content dilemma.

Many students were thrilled that she came to Newhouse, and they shared my sentiments on meeting her and learning from her years at Playboy. Some people were absolutely not happy that she came, perhaps because her company, arguably on of the world’s strongest brands, is also a huge staple of the porn business. Regardless, she offered insights into stronger business models that adapt for the digital revolution we find our selves in, and her advice applied across the board to marketing, advertising, publishing, business, public relations etc.

Hopefully by doing this series you readers have enjoying getting into the head of the nation’s longest standing female CEOs and one of Forbes’ 100 Most Powerful Women. Christie is responsible for turning around the floundering Playboy brand during her tenure there, and she puts it best when she said: “Playboy did well not because it was competitive with the delivery of explicit sexual content — in fact, it never was — but because it was able to create a world that was a combination of intelligence, entertainment and lifestyle that appealed to young men. . . In a world where there is more media than ever — more clutter, if you will — the power of the strong brand is greater than it may have been 40 years ago.”

The Playboy Series: Christie and Gourmet

When former Playboy CEO Christie Hefner spoke to our small group of magazine students, she shared her insights on why Gourmet Magazine folded, what problems the mag industry faces, and two possible solutions to make our future as magazine journalists just a little brighter.

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Thanks to free content on the web, magazines and newspapers are having a tough time keeping their head above water let alone actually making money. Recently Conde Nast folded a few of its newer publications–Cookie and Modern Bride–but the publishing house also decided, surprisingly, to fold Gourmet. For those of you who’ve never read Gourmet before, it was a lifestyle magazine that featured good food and wine, and had a niche audience with up-scale taste. It was famous for its beautiful food photography, unique thicker-stock paper, and for sending writers all over the world to get in depth international coverage on food and culture.

When she gave a talk to our magazine group, Christie Hefner used Gourmet’s folding to illustrate what happens when a good magazine undervalue content and doesn’t nurture its younger reader base.

As Gourmet grew, readers aged. Content remained the same and there wasn’t a huge editorial effort to reach out to younger readers. Especially in this digitally-driven world, young readers won’t read if content isn’t angled for them.  Though it’s important as a magazine to maintain an identity, it’s equally as important to make sure that your  readership isn’t an 8 thousand year old audience.

I’m not saying Gourmet should have refocused its content to target 20+ year olds (because college kids cook Mac N Cheese, not soufflé) but they should have nurtured the 30+ and 40+ year old readers. “Not to say everyone who read Gourmet was old, but simply that they weren’t getting any  younger, and opportunity cost to keeping the magazine around without serious editorial adjustments was not beneficial to Conde Nast,” says Christie.

So what should magazines do when they run into this problem?

Christie says  the biggest market fixer is figuring out how to charge for content on the web:

iTunes Fix:

When the music industry shifted from producing 15 track CD’s where consumers bought the whole album, to iTunes where single tracks were available for download, it changed the way consumers bought music. Instead of having to buy an EP or a whole album, now you can hit iTunes to download your favorite individual songs. Christie says the magazine and newspaper industries may be headed in that direction. Maybe in the near future you’ll be able to purchase individual articles online instead of having the whole magazine PDF there for free.

 

World of Warcraft Fix

If you’re a gamer, you know what it’s like to play online: you get the basic version for free with decent graphics and beatable levels, but if you’re serious about the game, there is always a premium version available (for download and $$). If you don’t love the game, you won’t buy the premium version, but if you do, chances are high that you’ll fork over the extra jing. Same goes for magazines. If you love your magazine but you can see a free PDF of the magazines, you won’t pay for individual articles. BUT if you love the magazine and you can see a few articles for free, and purchase the rest, chances are  you might pay.

Integrated Editorial

Christie talked about integrating editorial teams on the Playboy staff. This means she took her web team that generated content for the web, and she combined them with the print editorial. Now Playboy’s editorial is consistent across the nation. She modeled this after ESPN’s business model, which makes its teams touch base with each other on a weekly basis to create editorial that is the same across the board, but shaped and angled according to the type of media (radio, web, print, mobile app etc.)

Most magazines have very separate, very distinct editorial teams, and therein lies one of the problems of the industry. While stories written for the web are not, and should not be the same as print, USA mags are behind in closing this gap.

Christie says magazines like Gourmet that struggle to renew their readership base should consider integrating web and print editorial teams. I’d agree and say that’s probably step one toward a brighter publishing future where magazines aren’t folding left and right.

Step two for the whole industry, is to figure out how to get readers to pay for online content. This will have to be an industry wide shift and it probably won’t happen for a few years given America’s slower rate of digital adaptation compared to the rest of the world,  but it will. When she met with us, I think Christie could see we were all getting slightly discouraged because the industry’s future (from the outside) seems to bleak right now.

So she offered these words of encouragement: “You guys are entering the industry at a really exciting time right now. Things are about to change and if you keep your intellectual agility– your capacity and curiosity for learning–you’ll be successful. Don’t look at it in terms of getting a job in this crap economy, but look at it like you’re jumping into a big mess and you get to fix it, but every day we get closer and closer and the challenge is actually fun.”

Stay tuned for The Playboy Series wrap up about Christie’s advice on how to become a good leader, how to max out life’s opportunities, and why you’re in a different workforce than your parents and grandparents.

Read about Christie’s time at Playboy here.

Meet Christie Hefner here

The Playboy Series: Magazines… Front and Centerspread

Christie Hefner thinks 10-year plans, business and personal, are “bullshit”. She told me so herself. “I’d never, ever construct a 10 year business plan for a business, and you shouldn’t set a 10-year plan because you won’t end up where think you will, I promise you that.” To Christie, goals are good, but she says with her experience as CEO of Playboy Enterprises, she’s learned that the media market develops too fast to even guess where it’ll be in 10 years.

“The main challenge for all professionals now is to think in a different way than we did even just 5 years ago,” she says in reference to how the world has developed digitally. The US is way behind the rest of the world when it comes to spreading content across digital platforms (blogs, texting, mobile devices, internet, email–everything counts) . Thats basically a fancy way of saying that even though it feels like the US has branched out in the last three years with technology (like iPhone apps, smart phones etc) European and Asian consumers are ahead with how they can use technology to access information–its so much easier to buy stuff online, make reservations for restaurants or get magazine content on your mobile device in Europe and Asia. Even though getting content on a mobile device isn’t the same as a bigger computer, laptops are becoming a thing of the past. The US is working on it, but magazines have a huge potential for growth in this area, and a lot of digital ground to catch up on. Spin, the indie/alternative music pub, has an iPhone/iTouch app you can download to get different content, but it’s one of the few magazines that does.

There are Companies and Then There are BRANDS

There are really good magazines that are a brand, Christie says, and there are really good magazines that are just magazines. For example, ESPN is a brand, Sports Illustrated is a magazine. Nike is a brand, Reebok is a shoe company. The main thing that differs from these companies and publications is ESPN and Nike’s ability to transform its identity and apply it in several different ways to cater to several different sections of their audience/consumer base. Buying a women’s sports bra from Nike is a very different consumer experience than buying men’s compression shorts. Reading ESPN and ESPN.com is much more interactive than reading Sports Illustrated.

Challenges to the Magazine Business Model

As media consumers (which we all are) we’ve operated under a silo model (like the tall steel cylinders that farmer’s put hay in) for decades. Radio was always radio. TV was always just TV. Print was always just print. Content was shaped for each media outlet, but now with internet and more than ever with mobile devices, content is integrating. Christie recognized this as an opportunity to advance Playboy, so she integrated her Playboy.com team with her print editorial team. Most magazines still have separate web and print teams and consider content separate. But as a journalist, I’m getting trained to think cross-platform. With every story, I have to ask myself ok, how could this story be angled for the web, how about print. Christie thinks the answer to solving some of the print industry’s financial and reader base struggles is to integrate the editorial teams. I would have to agree. “Magazines have to be fluid and allow for change in the organizational structure or they’re screwed. Print will never fully go away, but premium content, advertising and commerce are changing everything, fast.”

Newspapers, Magazines and Free Online Content

Magazines count on investment spending every year to built their rate base (the amount of people they target) which then leads to an increase in ad revenues because more advertisers want to put themselves in the pages. The magazine jumps in circulation and everyone is happy. Till it all comes crashing down like it has been lately.

This all sounds great, but magazines are not, I repeat, not making a sustainable profit, if at all. The main weakness in this model lies in the lack of magazines to make consumers pay their fair share for content. Think about your magazine subscriptions: you pay, on average,  between $0.50 and $2.00 per issue. If you buy one on the newsstand, you’ll pay between $5 and $7. Thats a huge price discrepancy.Throw in access to free content online  –you can go to your magazine’s website and click on stories, read issues for free digitally, click into blogs, take quizzes, register for contests– so why the hell buy the magazine in the first place? That’s how more and more consumers are starting to think, and its resulting in a publishing mess. Magazines are folding left and right. “It goes back to the canary in the colemine– newspapers.” says Christie. “Magazines don’t have the same magnitude of challenges that newspapers do, but putting up content online for free, plus the loss of classified ads, have sent newspapers down the drain. Now magazines are feeling the effects of free content online.”

Solutions and The Future

Christie says consumers need to start valuing magazine content more, and predicts they will if magazines prod them in the right direction. Most big magazines have loyal readerships (your grandma has probably subscribed to Readers Digest for 50+ years, your mom to Redbook, and your brothers to ESPN) and if you think about the amount of content in an issue that you get for $2, its ridiculous for magazines not to charge more. Christie says if we lower the rate base to readers who are willing to invest in the magazine by $0.50 or $1 more, we spend less money on direct mailings to attract readers that wont pay for content. Sure magazines will have a lower rate base, but they’ll have a consumer base that is paying a “reasonable price” for the magazine.

When I asked Christie what she thought a reasonable price for a magazine was (obviously we’re biased since we put so much effort into them) she laughed and said, “You know, thats a good question because I don’t really have an answer. I think what a good magazine and a good brand can bring to someone is invaluable, but I’d venture to guess that consumers would be willing to pay a price somewhere in between the $6 newsstand price and the $.50 subscription price. Charge $2 to $3 an issue, readers who don’t love the mag will leave but you aren’t losing money and newsstant prices go down so there’s an opportunity to attract new readers.”

Now I realize thats a lot of numbers to throw at you readers, but you can actually see what Playboy has done by dropping their rate base 38% this year here.

Stay tuned for more on The Playboy Series and Christie’s leadership and her view on Gormet Magazine’s folding and what actually makes a good magazine good.

Check out previous posts in The Playboy Series Here

Meet Christie Hefner Here

The Playboy Series: Meet the Younger Hef

I didn’t have time to google Christie Hefner beforehand so I had no idea what she looked like. When this gorgeous 57 year old woman, came up to me and extended her tiny hand for a handshake, I was astonished. Honestly, part of me expected a young, blonde bomb shell with an enormous bust and a tiny waste to breeze into the Miron room at Newhouse–maybe as Hugh Hefner’s daughter, I thought, she’d look something like a slightly older version of the Playmates in the magazine.  I was wrong. She reminded me a lot of Michelle Obama. Through fashion, she rocks her feminine side in a once-male dominated professional world .  She appeared to be in great shape, and at 57, shes definitely wasn’t afraid to show off a little leg in her designer cream skirt-suit.

I was also very impressed because unlike some important people who don’t take the time to meet us students, she met my eyes and gave me a bright smile. Her too-firm grasp in my hand suggested that as the first female CEO, she’d been shaking too many male hands over the years, perhaps overcompensating her grip to make them take her seriously right away.

Her Chicago, midwest accent came through in her “ohs” and “ahs” right when she started talking about her career. In the 1980’s as popularity in cable TV skyrocketed, Playboy Enterprise was doing really well. TV’s success in the 80’s was more than just a promotional extension of the magazine. Playboy enterprises had a whole media group and owned the only casino in England (with exclusive gambling rights).

After the initial boom in success, the company started to realize it was losing money, and losing money fast. It had spread itself too thin and couldn’t keep up with all of the outlets it had invested in– casino, magazine, cable TV, merchandise, the mansion, the playmates, the photographers, everything. At this point Hugh was still CEO but was mostly concerned with the editorial side of the business and had let the money side slack off.

Christie was fresh out of college, she was 22 years old and interested in law, journalism, and politics. Her parents split when she was 5 years old and she lived with her mother, her step father and her younger brother in Chicago. Back in California, Hugh invited her out one weekend just to show her the business after graduation. He knew she needed a job and according to Christie, probably wanted to spend some time together, so he asked her to work for the company for a year while she sorted out her other interests. “I said okay, sure, why not, and that’s when I learned your life never goes in the direction you think it’ll go in.” So she signed on and worked all over the company–branding, marketing, research, advertising, sales.

One year turned to two, and she watched the company lose millions under the previously hired (and shortly thereafter, fired) CEO. The company needed a savior, and Christie stepped up to the plate. “I was in my early 20’s, I didn’t have a graduate school degree, I only knew the business from talking to people and observing, and I said to my dad one day, ‘Dad, I think I can help you, why don’t you let me run things for awhile and I’ll try to pull us out of the slump.’ I don’t know what came over me, because all the odds where against me, and after I pitched myself I sort of thought ‘what the hell am I doing!’”

At the same time the company went under, Hugh had a stroke. Christie got a call from Hugh’s assistant that her dad was in the hospital, so she insisted on flying out from Chicago, even though Hugh refused to see her. She stayed there at the mansion while her dad recieved in-hospice care. One day went by and he refused to see her. Then another day went by. Then another. Finally, Hugh let her come in: “I walked into my dad’s bedroom and he was propped up on the pillows watching TV and reading the TV Guide. He looked completely normal and great, but as I got closer and closer to his bed I realized he was reading the TV Guide and holding it upside down, and he didn’t know it. It was really, really scary.” So after that Christie became CEO of Playboy Inc. and began her daunting task of digging the company out of the hole.

“I’ll tell you what I did in business terms first,” she says. “I eliminated the facets of the company that weren’t generating sufficient revenue and inhibited brand expansion.” She pauses dramatically, and the audience is still. “Which means I cut the losers,” and the audience erupts into laughter.

She sold the casino in England, cut down on other company expenses, built a team of diverse associates to help her, and then proceeded to spend the next 20 years saving and restructuring the company from a top-down model to a platform model.

Christie stepped down in 2008 because as the longest serving CEO of a multimillion dollar company, she finally, 20 years later, wanted to return to her original interests of journalism, law and politics through charity work and working on the Obama campaign.

“I learned a lot from those years at Playboy. I learned a lot about people and about business, and how to be a good leader. I tell people I didn’t get my MBA but I got my MBWA–my ‘masters by walking around’. I learned that life never leads you where you think you’ll go and even though it’s good to have goals, never set a 10-year plan for yourself because it just won’t happen that way. Just as shit happen, so does good stuff.”

Stay tuned for more on Christie’s view on the magazine industry, how she restructured advertising and editorial teams, and what she thinks you can do to become a good leader.

Click here to read about Where in the World’s previous posts in The Playboy Series.

Story of the Week: How to find the perfect hotel online

By Ed Hewitt

updated 11:41 a.m. ET, Tues., Nov . 3, 2009

Before a recent stay in a hotel near Boston, William Campbell wanted to map out some alternate local driving routes to and from the hotel so he would not be late for events during his stay. What he found in his search prompted a call to the hotel that greatly improved his stay there.

Specifically, Campbell was staying at the Crowne Plaza Newton, which, as he discovered when he looked closely, just happens to straddle the Massachusetts Pike. That is, the road goes directly under the hotel — and under most of the hotel windows. Campbell called the hotel to ask if they could guarantee a room on one of the upper floors (it’s a 12-story building) to minimize noise from cars and trucks barreling down the road below.

Click here to read the rest of this story.