MPA Speeches--Tom Ryder AMC 2005

October 17, 2005

Thomas O. Ryder
Chairman & CEO
The Reader’s Digest Association, Inc.
Outgoing MPA Chairman
 
American Magazine Conference 2005
October 17, 2005
Fajardo, Puerto Rico 

Thank you.  I am so happy to be here.  This is going to be a truly great program.

Evan Smith and his team have done a wonderful job, and I would like to thank them for their work.

My only disappointment is that Jon Stewart will not be here.  We did invite him back to interview a fresh group of editors.  Not a lot of volunteers for that privilege.  And, John was a little reluctant.  So, we tried to lure him with a special incentive.

We said we would assign him a full-time fitness trainer while he was here – Dave Zinzenko from Men’s Health.  Dave was especially looking forward to demonstrating a saying they use a lot at Men’s Health – “No pain, no gain!”

I end today two years as your Chairman.  And, for that matter six years as your Vice Chairman and two years as your Secretary and two years as your Treasurer and two years as your head of Government Affairs.  Enough already.  I’m even tired of myself.

The agenda I set two years ago had to do with four critical issues – advertising, circulation, postal and diversity.  I want you to know we solved none of those problems, just as I promised. But, we certainly did make progress. 

Nina will give you a scorecard of what’s been done, and I think it is actually quite impressive. 

For that work, I would like to thank Nina Link, Ellen Oppenheim, Jim Cregan, Michael Pashby and the rest of Nina’s terrific MPA staff.  And, I would like to thank people like Cathie Black, Ann Moore, Christie Hefner, John Loughlin, Mike Klingensmith, John Griffin, Jim Berrien, Cindy Stivers, Rick Smith, George Green, Mike Levy, and Ed Kelly for doing work on your behalf that was above and beyond the call of duty. 

And for others here in this room too numerous to mention who have helped me and you in myriad ways.

Special thanks to my friend, Jack Kliger, for his role as Vice Chairman.  Jack really showed me what Vice was all about.

I have always marveled at the following fact.  Our industry is enormously competitive.  Yet, there is tremendous respect among the competitors.  We genuinely care about magazines and the role they play in our society.  And, there is a willingness among the best of you to help each other on the issues that matter most.  I love that about this industry.

I leave my role at the MPA pretty optimistic about the long-term outlook for our industry.  And, yet, I recognize that most pundits – and even Wall Street – feel the opposite. 

I base my case on two trends I see developing.

First, I think magazine advertising will grow significantly in the next ten years. Our gains will come at the expense of television.  Two years ago I said from this podium that I thought television was vulnerable.  Now I think they are in deep trouble. Their audiences continue to decline. The cost of television advertising continues to rise at a too rapid rate.  And, their product is, on average, truly dreadful.

Television is in a dangerous spiral.  It is not clear to me they can continue to exist as a primarily advertising supported medium.The Internet will be the biggest beneficiary of TV's weakness, as is the case today. But, magazines will also benefit significantly, and for a simple reason. 

We have been, and we will continue to be, the most efficient and best place advertisers can go to build brands.  We all know it’s true.And, it’s up to us to keep telling our story, and taking it to everyone who will listen.The work magazines do to provide service to their audiences continues to get better.  We make great magazines.  And, the evidence I see and every instinct I have says that our readers are more engaged than ever.  That, ultimately, is the right currency and magazines have more of it. 

Of course, we’ve been through changes, and in the next 10 years the pace of change will only accelerate.  That scares people.It scares us.  And, it causes some outsiders to be pessimistic about print.  Ah, but they underestimate you.

The second trend is more fundamental. Simply put, the biggest change we face is this:  much of what we currently sell in packages of paper and ink will instead be transmitted instantly to hand-held wireless devices that do not yet exist. Some see that as the end of print.  I see it as the dawning of a golden age for magazines.

Imagine:

- Instant transmission – no lead-time issues;

- Tremendous opportunity to personalize content and its presentation for the benefit of our readers;

- The end of printing bills;

- The end of paper bills;

- The end of postage costs; and...

- The end of the headaches and costs that currently worry us most.

It’s always important to know what business you’re in.

More than 100 years ago, the great railroad barons built beautiful majestic train stations in anticipation of the unfolding 20th century.  It was to be the century of trains.They thought they were in the train business.  But their business was transportation. And they watched as the automobile and airplane passed them by.

We are not in the print business.   We are in the ideas business.  We provide people with information and entertainment that they want to receive in a convenient way. And we invite our advertising partners to share our access and come along for the ride. 

The transition we face will not be simple. But as long as we remain interesting… as long as we remain innovative…as long as we remain alert – to the needs and wishes of our customers – we will be viable.  And we will be successful.

We will still have major challenges. We will have to operate for an extended period of time in both the print and digital modes.We will have to create new business models, although the good news is that we’ll start with most of our current costs going away.    And, we will have to figure out how to optimize the tremendous new power we will possess to communicate ideas.

But, doesn’t that sound like fun?

I have great confidence in the value of magazines and in the creativity of the people in this room who make them.  Hell with the pundits.

What a spectacular decade we are facing!

Enjoy it!