The Uncool Success Of Rodale
High school cliques recur endlessly, and nowhere more so than within the Manhattan-centric world of magazines. The popular (read: mean) girls are at Condé Nast Publications. Student-government and school-newspaper types flock to Time Inc. (TWX ) When it comes to who sits where in the cafeteria, the Rodale table is nowhere near the cool kids.
Rodale is run by CEO and President Steven P. Murphy. He dresses well--almost too well. (Think three-piece suits in September.) He exudes the faint aura of a performer, of being aware he is being watched. Neither quality is common at the family-owned Rodale, based in Emmaus, Pa., which still retains the institutional DNA you'd expect from a company that has been popularizing "organic" since the 1940s. But Murphy is a bit of an outsider in New York media as well. He came to Rodale from Disney (DIS ), not Condé Nast. Chatter about turnover in his executive ranks, which Murphy and Rodale dismiss, persists. If his industry peers compiled a short list of top executives, there's a good chance Murphy wouldn't crack it. And yet his track record at Rodale since his arrival in 2000 is likely as good as anyone's and better than most. Today the struggles of Time Inc., long the gold standard of the industry, earn it stepchild status at Time Warner (TWX ), and suddenly someone in the out crowd looks good.
MURPHY ARRIVED AT RODALE after an impressive growth spurt had waned. From 1990 to 1997, Rodale's revenues doubled, to around $515 million, but then began to slide. One early task was reorganizing the company, followed in 2001 by staff cuts. Combined with Murphy's outsider status, such moves did little to endear him to some of Rodale's tight-knit employees, several of whom were not shy about sharing their objections with reporters. (When asked about such comments, Murphy grins and mimes someone throwing a bomb his way.) But to a person they concede that Murphy has done a good job, an assessment the numbers bear out. Rodale's aggregate ad pages have risen during his tenure, which, given magazines' ill fortunes since 2000, is no mean feat. Men's Health, while soft this year, saw annual ad pages jump from 714 to 1,117 between 2001 and 2005. And Murphy gave niche titles like Runner's World, Bicycling, and Backpacker a second wind through an old-school form of upscaling: adding longer-form narratives while virtually every other publication was truncating word counts. Note to publishers convinced that readers don't like to, you know, read: Bicycling and especially Runner's World have prospered under this strategy.
Some of this success is due to luck and prior groundwork. Rodale focused on health and what we now call "wellness," which turned out to be a better niche than, say, mass-market women's service magazines. (Rodale's most prominent flagging title, the 3.3 million circulation Prevention, most closely resembles a women's service title.) It's true that The South Beach Diet, which was published in 2003 and sold at least 5 million copies, covers many sins. It's also true that Rodale built a Martha Stewart-esque multiplatform business off that idea--a task at which many others have failed. (There is a uniquely Rodalian way to communicate this notion: "I knew [Murphy] was the right guy when he drew a mandala to describe the business model," says Vice-Chairman Maria Rodale.)
With South Beach, Rodale cracked the code of getting consumers to ante up online, teaming with Waterfront Media on a South Beach-branded site that has so far drawn more than 500,000 subscribers who pay $19.95 a month--and stick around, on average, for six months. Sites themed around French Women Don't Get Fat and the NBC (GE ) hit The Biggest Loser have followed. Next challenge: making that model work with Men's Health and Prevention. But if enough of the 20 or so subscription sites Murphy promises by '08 succeed, they will more than make up for failures such as Organic Style (a magazine that ran through four top editors in four years). "I don't think our size"--revenues now approach $600 million--"or not being any part of any club has held Women's Health back," shrugs Murphy, referring to a new magazine he's sweet on. As we all found out, the high school in crowd was wrong about almost everything.
For Jon Fine's blog on media and advertising, go to www.businessweek.com/innovate/FineOnMedia
By Jon Fine