By JEREMY W. PETERS, New York Times
Published: December 12, 2010
WASHINGTON — How did a 153-year-old magazine — one that first published the “Battle Hymn of the Republic” and gave voice to the abolitionist and transcendentalist movements — reinvent itself for the 21st century?
By pretending it was a Silicon Valley start-up that needed to kill itself to survive.
The Atlantic, the intellectual’s monthly that always seemed more comfortable as an academic exercise than a business, is on track to turn a tidy profit of $1.8 million this year. That would be the first time in at least a decade that it had not lost money.
Getting there took a cultural transfusion, a dose of counter intuition and a lot of digital advertising revenue.
“We imagined ourselves as a venture-capital-backed start-up in Silicon Valley whose mission was to attack and disrupt The Atlantic,” said Justin B. Smith, president of the Atlantic Media Company, who arrived at the magazine’s offices in the Watergate complex in 2007 with a mission to stanch the red ink. “In essence, we brainstormed the question, ‘What would we do if the goal was to aggressively cannibalize ourselves?’ ”
What that meant more than anything else was forcing one of the nation’s oldest magazines to stop thinking of itself as a printed product.
Separations between the digital and print staffs in both business and editorial operations came down. The Web site’s pay wall was dismantled. A cadre of young writers began filling the newsroom’s cubicles. Advertising salespeople were told it did not matter what percentage of their sales were digital and what percentage print; they just needed to hit one sales target. A robust business around Atlantic-branded conferences took off.
The strategy is not a cure-all template for troubled media companies, of course. The Atlantic, a tiny enterprise compared with vast corporate magazine empires like Time Inc. and Condé Nast, has only about 100 business and editorial employees and a circulation of 470,000. A scale that small means that a few million dollars could push the company over the top — an amount that would barely register on the balance sheets of many other publishers.
Since 2005, revenue at The Atlantic has almost doubled, reaching $32.2 million this year, according to figures provided by the company. About half of that is advertising revenue. But digital advertising — projected to finish the year at $6.1 million — represents almost 40 percent of the company’s overall advertising take. In the magazine business, which has resisted betting its future on digital revenue, that is a rate virtually unheard of.
It did not always appear The Atlantic would get here. The magazine has long enjoyed a certain intellectual cachet. It was the kind of publication devotees knew made them well read (“Did you see that piece in The Atlantic?”), and a destination for writers that burnished a résumé like few others (“As I said in my Atlantic piece …”).
But what it enjoyed in prestige it lacked in business success. Efforts to turn even a modest profit failed, with some setbacks the result of management decisions and others the result of tragic misfortune.
“I thought, ‘How hard could magazine management be?’ ” said David G. Bradley, who made The Atlantic his second magazine purchase in 1999, two years after he bought the National Journal Group from the Times Mirror Company. He paid Mortimer B. Zuckerman $10 million for the privilege.
Mr. Bradley, an exceedingly polite man who carries himself with a gentility that can make it seem as if he comes from a different era, ruefully recalled in an interview that buying the magazine quickly began to look like a mistake.
“Immediately it was turmoil for me,” he said, the panorama of Georgetown and the Potomac River providing the backdrop to his eighth floor corner office.
The Atlantic lost $4.5 million in its first year under Mr. Bradley’s ownership, and that figure grew worse. Grappling for a solution, Mr. Bradley went through what he called his Inspector Clouseau phase, likening himself to the hapless Pink Panther detective.
He tried going out on sales calls with his advertising staff, only to find that his presence in meetings was a distraction. He sank money into printing the magazine on higher quality paper, only to find that it was a waste. He raised the price of a subscription. He lowered the price of a subscription.
Then, in 2003, the magazine’s celebrated editor, Michael Kelly, was killed while on assignment in Iraq. Two years later, with losses approaching $7 million a year, Mr. Bradley decided to move the magazine to Washington from Boston, its ancestral home.
Mr. Bradley, ever self-effacing and independently wealthy from the public offering of a corporate research firm he founded at age 26, said he finally realized he had run out of ideas.
“Atlantic had so serially failed,” he said, “that it was overwhelmingly likely the next thing we would do was fail, and the next thing we would do was fail.”
Mr. Bennet, a former foreign correspondent with a clean-shaven bald head, a goatee and a passion so intense for The Atlantic that he can recite the founders’ 1857 mission statement from memory (“The Atlantic will be the organ of no party or clique”), began refocusing the magazine’s efforts in print and online. He and Mr. Bradley set out to assemble a team of bloggers who were known quantities and could attract a devoted following.
They lured Andrew Sullivan away from Time.com in what proved to be a major coup. Today Mr. Sullivan’s blog, The Daily Dish, accounts for about a quarter of TheAtlantic.com’s monthly unique visitors, which reached 4.8 million in October.
A year earlier, traffic to the site was three million unique visitors. Another experiment, an aggregator of online opinion columns called The Atlantic Wire, exploded to nearly a million unique monthly visitors in the year since its start.
For a publication as refined as The Atlantic, such a rapid refocusing toward the very uncivil world of the Web did not come without anxiety.
“If what you produce is a highly polished, absolutely beautiful, totally fact-checked error-free magazine, the kind of anarchic, often raw environment of the Web was pretty scary,” Mr. Bennet said. “But it turned out our 150-year-old magazine could make that transition very naturally.”
On the business end, there was an equal sense that the company needed to be run like a digital enterprise. The online marketing and sales staffs were merged with their print counterparts — a move many magazines are making just now. All sales representatives were moved to New York from Washington. Mr. Smith set out to eliminate $2 million in costs in his first year, in part by reducing the head count.
Mr. Smith also hired away the publisher of Wired, Jay Lauf, who did something fairly radical for the magazine business: He told his staff they did not have to meet separate targets for print and digital ad sales.
“If you do $1.8 million in digital and $200,000 in print, that’s fine.” In the last year, digital advertising revenue at The Atlantic rose almost 70 percent while print revenue climbed more than 25 percent.
The Atlantic’s leaders have become something of a marvel in the publishing world. David Carey, president of Hearst Magazines, who during his time at Condé Nast led The New Yorker back from the brink, said The Atlantic’s turnaround was truly a feat.
“Justin and Jay proved the cynics wrong, that the Atlantic would never work as a business,” he said. “They are terrific managers and marketers.”
Another major ingredient for growth has been Atlantic-branded conferences. The company started hosting events in 2006, and they now make up more than 14 percent of its total revenue. An annual conference in Aspen, Colo., a joint project with the Aspen Institute, draws 1,200 people who pay $2,700 for a four-day pass.
Profitability is a new enough concept at The Atlantic that some there seem almost giddy about it. Mr. Bradley asked his accounting department to find out which subscriber’s check officially put the company into the black. They pinpointed a woman from Livingston, Tenn., who sent in a $29.95 check for her renewal on Oct. 1. Mr. Bradley got her phone number off the check and called her to say thank you.
At first she mistook him for a telemarketer and almost hung up on him, but not before he promised to pay for her subscription for the next 10 years.
