(It is Friday, October 26. Jann Wenner is sitting at his desk, glasses pushed up on his head, marking up and showing off an editor’s letter from the third fortieth anniversary issue of Rolling Stone—and, yes, you read that sentence correctly. A lightly edited transcript of the ensuing conversation follows; this week’s column about Wenner can be found here.)
BusinessWeek: This is what, exactly?
Jann Wenner: A call for leadership. [Displays the page.]
BW: Who are you endorsing in 2008?
JW: A Democrat. Any Democrat. I think there are some very good candidates out there, but, I mean, I am not choosing one [yet].
BW: You’ve giving money to certain candidates already.
JW: Probably to everybody, yeah. [According to fundrace.org, Wenner has only made contributions to Barack Obama and John Edwards thus far.] Whoever comes in for an editorial luncheon, I give some money to. I finance all the Democrats. They all say interesting things, and the process of debates and primaries will help define them, who they are and—it’s interesting. Those people who are running for President, who really now have to go out and deal with the electorate have the most advanced, strongest anti-war positions on Iraq. Whereas those people who sit in Washington, who are not facing the people, hold us back from getting out of there. The democratic process will work great, if it’s allowed to work.
BW: Hmm. Well, I could chew over politics endlessly …
JW: You asked the question.
BW: I did. I’m interested. But tell me. What did the 21-year old Jann Wenner think about where he’d be in 40 years?
JW: He didn’t think about those things.
BW: Nothing whatsoever?
JW: Nothing whatsoever. It was a different time than today. Somebody who’s 21 today, who wanted to start a magazine, would have to go out, first of all, and try and round up millions of dollars. And have a marketing background, and be all trained. I had a dream. And a vision. And a lot of passion. I was a rock and roll fan and there was no publication for me, of any kind, that would treat it with the respect and dignity and joy that it really represented and deserved. It was either shut out from the mainstream media, or they ridiculed it. They put it down, like it was screaming teenage girls, what will they do when they grow up, etc. It was really looked down on. So what they were missing was one of stories of our times. Which was the emergence of the a baby boomers as a driving cultural, economic and political force of this country that would forever change the nature of our culture and our social experience.
BW: Could someone start a magazine and have it . . .
JW: It is very, very tough. Tougher than ever. If you were to start a new [successful] magazine today, you’d have to have the backing of major publishing company. Have there been any? Other than little tiny things? The last big successful magazines were People, Us . . . Us Weekly! The last really big success.
BW: Real Simple?
JW: Or Oprah. What my point is, all publications except Playboy, Rolling Stone and Us Weekly were started by big corporations. For an independent to start a major magazine is nearly impossible. It’s just too much money.
BW: It would be on the Web today.
JW: Not necessarily. People still want to start magazines. But it will cost multi-millions of dollars. You need to get that financing, and a company knows how to publish. There’s the situation, and timing, circumstances. And you need, at the center of it, some extraordinarily talented, prescient individual. Such as I was.
BW: What sticks out in your mind as the big missteps along the way?
JW: Most missteps have been with poor choices of personnel.
BW: How about starting a magazine like Family Life? [Which Time Inc. shuttered in 2001, after Wenner and then Hachette sold it.]
JW: I thought you meant about Rolling Stone.
BW: No, I mean the entire company. Strategic missteps, that sort of thing.
JW: Well, basically it comes down to poor choices of personnel. I suppose in a larger macro sense, [we didn’t] leverage the brand into licensing and nightclubs and stuff like that. But on the other hand we kept the integrity of the brand. A big mistake? Selling Outside [in 1979]. Having to sell Outside. That was a good magazine. And Family Life, I sold it, but I got out of it whole. Not so bad.
BW: Was there stuff you wish you’d bought? JW: Of properties that had been available to buy? I was offered 20% of Wired early on. Is that a big mistake? I don’t know. Did that turn out to be a big magazine?
BW: It’s something today. And when Si [Newhouse, of Conde Nast] bought it, that went—
JW: Yeah, he paid a lot of money for it. But, you have this magazine called Wired. Can you make a lot of money?
BW: There’s things you can do online with it. But let me ask--
JW: I will say one thing. We never lost tons of money chasing down ridiculous online ideas. Right now we have two online, two Web sites [for Rolling Stone and Us Weekly] that are both profitable and big and well-used. And we have yet to ramp them up to be as big as we’re planning, which we are planning to do now. We’re not just trying to replicate the magazines, but we’ve got strong brands that stand for something, and we are going to build those Web sites up.
BW: Do you still have a licensing agreement for Rolling Stone Online [with RealNetworks]?
BW: If I recall correctly, when you struck that you were getting around $2 million a year.
BW: Are you now missing out on a big pot of online advertising by not having control of the site?
JW: I don’t think so. We get percentage of the revenue. Our online operations have been profitable since day one. I don’t know how many magazines you can say that about. So I am feeling pretty good. And Us online, it’s ours. We own 100%. We brought that to profitability.
The Internet . . . I don’t know that it’s primarily a medium, in the sense that it’s primarily a transactional service and media delivery system. My formulation is this: Rolling Stone represents a really good idea of a brand, concept, whatever you want to call it. Community, any one of those buzzwords. You can integrate the Internet into your brand, if you do it correctly, and you can broaden the depth of the experience. That’s what you can bring to peoples’ lives, beyond what’s on the printed page--if you do it correctly.
BW: To turn to Us Weekly for a second, do you feel any pressure from sites like tmz.com, which are always banging--
JW: No, no, no. My feeling is that, just like the TV shows Entertainment Tonight and Access [Hollywood], these Web sites build interest and build an audience, a really involved audience, in much the same way that MTV exploded interest in music.
BW: Do you ever think, oh, MTV. I should have done that?
JW: No. We’re a magazine company. That’s what we really do well. We are not a television company. If I was a television person, I’d be in television. My abilities and skills are in magazines, and in certain kinds of magazines. Magazines that are high quality magazines. Including Us Weekly. As trivial you may think the subject matter is, it is a really well-executed product, with high standards of writing and wit and photography and design.
BW: Still, sites like TMZ are attracting a lot of eyeballs.
JW: It just builds our audience, and builds the audience for this kind of area and gets them more deeply involved.
BW: But there’s got to be executives in your position who are saying, ‘whoa. These guys are getting really big. Will people even still want [celebrity news] in a magazines?’
JW: It just means you slightly adjust what you do in your magazine. It’s not true just for Us Weekly, vis-a-vis the Internet or televison. There are certain things TV does better than magazines, and you adjust accordingly. They should never have put Life magazine in competition with television. It drove Life magazine out of business.
BW: Or did TV, and color TV, just make the entire idea of Life magazine—the week in pictures--redundant?
JW: It didn’t mean Life magazine didn’t have a place. But it certainly wasn’t going to compete with bringing you photos of the latest news event. Instead they tried to ramp up circulation to get the numbers that TV was delivering, and beat it at a mission that TV did better. When TV came along, it didn’t put radio out of business. It did end those national broadcasts, those theaters of the air. Then radio became local, and music. When you get down to it, Internet and TV shows mean breaking news. The latest Lindsay Lohan arrest, it’s [now] not a cover worthy story. It’s not a news-breaker. Let them do that and you do something else that you can do better as a magazine. Bring them more in depth and perspective. Better photography. And exclusive interviews.
BW: Do you worry about the future of magazines as a medium?
JW: No. I don’t.
BW: At all.
JW: No. Reading is not going away. There are things that magazines do better than other mediums and you just have to do that and do it better than ever. There are so many media choices out there now in the world—Internet, other magazines, blah blah blah blah--that if you don’t do a really, really good job, if you’re just half-assed, why bother? The audience is just gonna wander away. If you do it really well, you hold onto the audience and you build real value. It has to be meaningful. It can’t be casual [expletive]. It has to be meaningful, in some way, in peoples’ lives and do things that magazines do really well, [like] photography and editing. I’ve seen so many magazines trying to imitate Web sites in their redesigns, of doing all these little bits and pieces, and it’s like, if you are going to do little bits and pieces go to the Internet! They do it better!
There are some news magazines that fail to see the writing on the wall some years ago with cable news. The Internet has finally ended that. Who needs a newsmagazine? And they have reacted so late, in my view, that they are in really dangerous territory now. Is it too late? I don’t know. They’ve got to be really fast. They’re with very huge bureaucratic companies. Do they move fast? I don’t know.
BW: I want to pull back for a minute, and go back to the view from 30,000 feet--
JW: I like it when I’m seeing you 30,000 feet.
BW: Ha. What did you not know . . .
JW: About what?
BW: . . .about all of this when you started out?
JW: Well, I know how to run a business [now].
BW: How long did that take to figure out?
JW: Quite a few years! [laughing.] The slow process of learning on the job. It’s been a long time. But I think I figured it out ten years ago. It’s been a wonderful learning experience, piece by piece. I got into it because I loved music. And as a writer and an editor, I’ve been doing this since I was seven years old in my neighborhood, when I was putting out a neighborhood newspaper. I never meant it as a career. But I was always ending up doing that, high school, college, summer jobs, somehow this seemed to be . . .
JW: Not even logical. I wasn’t even aware I was doing it. It was just what I was doing. And I was able to do it really well. It just came naturally. I just did it partly because I could, because I knew how to do it, and I loved music. I didn’t know how much money there would be, how much I could get, or how much access [I could get]. I’ve been able to meet the big players of our time. The people who made changes in politics, arts, business. What a reward.
BW: If the 21 year old Jann were out there [gesturing to the street below Jann’s office window] looking up at this office—if you airlifted him out of the Sixties and dropped him here now, what would he think of you?
JW: I’d think, Wow. I’d think, how incredible. What a lucky guy. What great writing. He’s covering all that music I like. He’s friends with all those people. He gets to go to all the great concerts. God. What a fantastic job. Which is exactly what 21 year olds think of me right now.
BW: The young Jann wouldn’t think, “is he the right guy to be doing this? He’s been doing it forever.”
JW: No. Honestly, [the 21-year-olds] want to be me. I mean, really. It’s a dream job. Doing a great magazine [Rolling Stone] that’s just as relevant today as it ever has.
BW: Are Rolling Stone’s revenues now at a peak--
BW: . . .or was there a previous high-water mark?
JW: [Shakes head.]
BW: With Us Weekly, company revenues now have to be bigger than ever.
JW: [nods, smiles]
BW: . . . and I think they’re somewhere between $350 and $400 million a year.
BW: You can tell me if I sound crazy.
JW: You don’t sound crazy. BW: Did Jack Kliger, the CEO of Hachette, make an offer for Men’s Journal around 2004?
JW: No, he talked about wanting to do something together. It never got beyond one casual conversation.
BW: How long do you want to do this? JW: I’m happy to do it as long as it’s kind of fun and I can do a good job at it.
BW: Ever think about retiring?
JW: No. No! I got a great job, I’ve got plenty of time to travel, ski, and raise children. Which are my other principal outside obligations. The job is so much fun and I get to do important work.
BW: What about succession planning?
JW: I haven’t thought about it.
BW: Never thought about it at all? JW: Well, I have some smart kids.
BW: Two of them have been getting involved, yes?
JW: Two of them have been working here.
BW: Gus and Theo?
JW: Gus and Theo. You are well up on . . . [to secretary in other room] CANCEL THE MOVIE! I have very talented kids. They’ve been enjoying interning here and showing real skills at what they’re doing. One is a photographer and one is a writer, and both were published several times last summer.
BW: They’re still in school?
JW: Yes. So [that succession]’s a possibility. It’s always a possibility.
BW: Ever think about selling the company?
JW: That’s also a possibility.
BW: When you struck a partnership [in 2001] for Us Weekly, with Disney and Michael Eisner [in 2001, in which Wenner sold a 50% interest in the magazine] . . .
JW: How about that. There’s a mistake. There you go.
BW: OK, but think about where you were when you made that deal. JW: Where we were as a company--by most accounts Us Weekly was worth, like, a dollar. And that [deal] gave us $35 million. And it gave confidence, not only to advertising and publishing people, but also to the staff here, and to myself. It wasn’t a rescue, by any means.
BW: But you told me at the time that with Us Weekly the money was pouring out, week after week.
JW: We were spending money at a high rate. And we needed to continue doing that. It was an injection of confidence, and the [of] back-up capital to spend with confidence. So, it was what it was. But [laughing] buying that piece back was pretty expensive.
BW: It was $300 million [in August 2006].
JW: But you know what? That tells what the Us Weekly part of [this company] is worth. And it’s even bigger than when we bought it back from them.
BW: In that Disney deal, was there any sort of right of first refusal, should Wenner Media decide . . .
JW: Yeah, and it was two-way. We had to offer to them first--
BW: I meant, for the entire company of Wenner Media.
JW: Never anything to do with the company. That never was there.
BW: Could you see being a kind of Hugh Hefner figure, where you have a hand in all of this but you’re semi-retired?
JW: It’s possible. I don’t know. It’s so down the road.
BW: Are you and Jane [his estranged wife, Jane Wenner] still the only company shareholders?
JW: There’s trusts [for the kids] It’s still family-owned.
BW: There are very few family-owned media businesses left. Does it make sense at some point to not be family-owned?
JW: Well, we’ll see. Yes, we get offers. It’s not inconceivable. All bets are on the table at some point. [But] it’s not on the table now.
BW: What would make you want to retire?
JW: I don’t know. Ill health.
BW: So with this cautious approach on the Internet you haven’t lost money. Any concern you missed out on some big opportunities?
JW: No. What?
BW: You’re the guy who makes media. I write about it. JW: If you show me one thing you thought we could get in and lost, I’d be happy to hear about it. Of the ones kind of related to what we do, like iTunes—
BW: How about something that’s not an application? Like a bigger hub where you could have been watching music videos a few years ago . . .
JW: You know, YouTube, I never figured it out. It’s a good insight and a great technology . . .
BW: I mean somewhere you could watch videos you guys put up, like MTV.
JW: They haven’t done it.
BW: Actually, they did.
JW: I don’t know. I think there’s still a big Internet opportunity for Rolling Stone and for Us Weekly, and we are on it. We are going to be delivering on it.
BW: There is a fair amount of angst among executives that feel their brands are not being built up fast enough online.
JW: But you can’t take a weak brand and say, ‘oh, we are going to resuscitate it by moving it onto the Internet.’ I’m sorry. It’s a weak brand as a magazine, and it’s going to be a weak brand on the Internet. What does Time magazine stand for on the Internet? About the same thing it stands for as magazine. Well, who wants it? You’ve got CNN online. You got New York Times online. Got the Washington Post online. You’ve got so many other journalistic news organizations online, why would you turn to Time?
BW: Do you still read it?
JW: No. Rick Stengel is a good editor. I’ve seen some covers and they’re smart. I have read some pieces. They are trying hard and Rick Stengel’s a smart guy. But he’s got a very, very tough road ahead, and the road ahead is not the Internet.
BW: What do you still read?
JW: I read the Times, the Journal and the Washington Post. I might stop reading the Journal.
JW: Well, we’ll see what happens, and how damaging he [Rupert Murdoch] is to it. I read my magazines and I read the New Yorker. And Vanity Fair. I’ve got so much [expletive] going on.
BW: Were there moments in the past 10 or 15 years when the business looked a little shaky?
JW: Not really. The biggest challenge was Us going weekly. And just at the point where we were learning what the mistakes in the plan that had to be changed, we ran into 9/11. We had to deal with two heavy duty shocks at once. That was it. And smaller things, like [losing] cigarette advertising.
BW: You’ve been operating since early 2006 without your longtime #2, Kent Brownridge. What was that adjustment like?
BW: Miss him?
JW: Do I miss that function, and him doing that function? No, not at all.
BW: Any concerns that he’s at a new company, publishing magazines like Maxim and Blender, that compete with aspects of Rolling Stone?
JW: No, I’m happy he’s back in the business, and happy he’s having a good time. Good luck, you know.
BW: Anything you hadn’t done that you wish you had?
JW: I wish I had spent more time skiing. I’ve been skiing nearly 60 days a year for the last ten years. In the larger scheme of things, no. Sure, there’s small things I wish I’d done, like personal relationships, or Jane didn’t buy that painting that we should have bought, or I didn’t go to that great party. But nothing meaningful.
BW: Men’s Journal has not been as strong as the other titles here.
JW: We’re making real headway. We decided, I decided over a year ago that I wanted to bring Men’s Journal up from being a B-level title to being an A level title. We’ve made enormous progress in the last year. We’ve just published our biggest September issue. [Makes phone call] What are our big ad categories, gainers, in Men’s Journal? No, not the numbers. Just tell me what the categories are. [To interviewer] Automotive, liquor, and tech.
BW: Not direct response?
JW: [Back to phone] Not direct response? What about direct response? [To interview] It’s not a grower. It’s solid. [Hangs up phone].
BW: How do you feel about the editorial positioning of Men’s Journal?
JW: I think we got it now, finally. Just in this very last issue. Which I’ll give you a copy of. [to secretary in the next room] COULD I HAVE THE NEWEST MEN’S JOURNAL? Once I got Us settled, then I meant to finally turn my attention back to Men’s Journal. Us took a lot of time. Which it deserves. Along with my constant involvement in Rolling Stone. I’m not involved in the day-to-day management of any of these magazines, or the company itself. I have no day to day role.
[New Men’s Journal arrives.]
JW: Look at this. It’s really got the mix. The new editor [Brad Wieners], he and I, totally turned it around. A ninety degree turn. Kaminsky [Jim Kaminsky, who was just poached by Brownridge to edit Maxim], honestly, god bless him, I’m glad he left. He was taking it in a direction I didn’t like. Kind of an airline magazine. Little bits and pieces like Maxim. His basic experience was Maxim and Playboy. I believe this magazine should be in-depth, and quality. These magazines that have all these little bits and pieces, like I said before, they’re not our kind of magazines.
BW: Rolling Stone—over the years has its revenues and profits been essentially steady?
JW: They’ve been essentially where they are. Might vary two or three million dollars a year.
BW: n its mix of subjects like music and politics, Rolling Stone is a very unusual animal . . .
JW: There has never been any real, solid competition for it. Over the years little blips have happened, but no one has really come here and taken us on. But I am thinking--you could compete with Rolling Stone if you wanted to.
JW: Forget it. I’m not gonna tell you.
BW: Is the growth at Us Weekly over?
JW: I just think the growth will be slower. We’ve got a way to grow still.
BW: Any impact from the lower-priced celebrity titles from Bauer, like In Touch?
JW: I think they marginally impact us on the newsstand. But the vast majority of buyers are buying more than one of those titles. And if you do your job really well, you’ll be one of those titles.
BW: Any concerns its genre might turn out to be more ephemeral magazine form than Rolling Stone?
JW: No. That field—gossip, celebrity-- has been around for hundreds of years. It’s got more historical roots than—
BW: Your former editor of Us Weekly, Bonnie Fuller, has made the exact same argument.
JW: This is my argument, and she picked it off the table. [This form]’s been around forever. What’s ephemeral is when you trash people, and thrive on scandal and you thrive on denigrating people. There is always a revolt against that stuff. We’re keeping it much like People did. Making it intelligent and thoughtful and fun ensures a long-term audience. Being the second-rate guy, whether it’s Star or any one of the Bauer [titles], is not a good long term position. You’ve really got to be number one in the field.
BW: There is less long-form journalism around in magazines than there once was. This is, obviously, one of the things that really animates you about the medium. Do you find this worrisome?
JW: Not really. It’s harder to do because so many other people are covering things that certain stories are used up. Like the Presidential campaign. Covering that story is very, very difficult. It’s done to death by every other medium.
BW: And nothing is actually happening yet.
JW: Yeah. And when it does happen, it happens really fast.