How to Survive without Google: People Inc's Playbook

18:22That's going to work. When that started to break down, we got to do something else. We can break this down into like two phases. First, there was like print to digital phase of the web, right? Which BuzzFeed, et cetera, was like an outgrowth of those. We navigated that pretty well. And now there is digital is like the open web is, I don't know what's going to happen. Like it's flattish for us. It's fine. Now we're in digital to brands. And if you don't have brands, you're not going to be able to do the nine different things to, quote, invert your models to do this. Like we launched an app at People.

18:56It's doing incredibly well. The average session in an app is three or four times longer than a session on the web. And if they play one of our games, it's like five times, six times longer.

19:05Peter Kafka:Who's a People app user? Is it someone who remembers people in print? Is it someone who's coming to it? So the people in print, we're still about two million copies a week. I think we're still the biggest magazine in America, but we are almost 10 million sessions a day just on the web. Do you think these are people who did not grow up with people? It's people who did not grow up but the people print magazine in there. Maybe there's some, I mean, you never know. But like the core of that, that is a young millennial Gen Z audience. Yeah, and I think one thing worth talking about, and because these changes don't happen themselves, and we made a structural change at our organization that makes us look a lot different than other publishers that really set us up to be able to do all these things.

19:41It was a little bit, when I talk about it like we've talked about it, it's a little bit like that South Park model, like the underpants gnomes. Like, like Steel Underpants Profit. The middle part of Steel Underpants Profit is we fundamentally changed how we do editorial. And I'll use people as an example, and I'll tell you an idealized version of it to make it easy to understand. When we got our hands on people four or five years ago, we thought this was the most undervalued asset in media. It was still like print-driven, command and control, like editor-in-chief sitting on top of a mountain commanding what we're going to do.

20:15Now we have this amazing editor-in-chief named Charlotte Triggs and run by a woman named Leah Weyer, and Charlotte's amazing. And what Charlotte has done or been tasked to do that we've all kind of figured out together is Charlotte's job is setting the direction of the brand. And in people's case, it's like ordinary people doing extraordinary things, extraordinary people doing ordinary things, focus on celebrity style, fashion, human interest, right? So it makes a lot of sense. But her job is to no longer pick the stories and then propagate them out. What we have is a separate group, content, creative, even product and tech in some cases.

20:56There's a team that does exclusively TikTok, a team that does exclusively Instagram, a team that does the magazine, that's a big team, a team that does the web, that's a big team, a team that does the app, a team that does all their events. And events are a huge part of our business.

21:07Peter Kafka:And what they do - And the TikTok people are not tasked with taking what was in the print magazine and making a video. They can do whatever they want, and the TikTok people can work with the Instagram people if they want or if they don't want. And this is a terrifying thing we did. We absolutely gave control of our most fire blasts at our brand to all these different groups of people. And none of them look like the person who used to be editor-in-chief. Like, the print people don't look like that, and I can tell you the TikTok Instagram people surely don't look like that. And you let them do their thing.

21:33And you end up with an ability to, oh, we want to do events? We can plug in events. Like, everybody knows what the brand is, and it's how we've gotten people younger, and it's how we've brought the energy back. It's why the app is so amazing. Like, because we let people live natively in their environments.

21:50Peter Kafka:I was going to ask you about this later, but since we're talking about people, it's such an interesting brand, right? It comes out of the 70s when it was considered this really novel thing. I'm 50 years old. A magazine dedicated to celebrity gossip, how crazy this is. And magazines were very important then, right? And this was like, how flippant. and then became the most powerful brand within Time, Inc., which was a really big deal publishing company. And then basically, I think around 2000, every time you looked into that business, someone wise was saying, this is the end of people. They are getting displaced first by Us Magazine and Janice Min, and then later, obviously, by the Internet.

22:28Peter Kafka:We're back, baby. We're back. And the idea of seeing a celebrity, you can't not see a celebrity if you boot up a screen, right? So how does people, and just saying we're going to, you know, we've got a mission about, you know, elevating people or whatever it is, that's not enough. How do you command attention for something that is literally a commodity? It may be less of a commodity than you think because the People brand is whatever you want to call it. It is the New York Times or Wall Street Journal of entertainment. It is a place of record. We don't do rumors. We don't do salacious things. Like we're not outing people.

23:03We're not doing any of that stuff. That matters maybe for a journalist, for an audience. You just want the stuff. It actually matters. And we also, for the stuff, we make the highest volume of the highest quality of this content every day across all of these platforms in a way that people want to consume it. When we took over the brand in whatever, 2021, we were here, that was not the case. but the brand was so strong that once we started to do this on other people's algorithms on our own websites on anything it just starts to work because there's something about the people brand whether it was like your mom got it or it was in the doctor's office or you still see it and you buy it in the airport there is some magic to that brand that permissioned us to do all of these things and again the proof is in the math and in the numbers i think i might get this wrong i think we're the third biggest news brand in America behind Fox and CNN, like people alone.

23:59It's that big now and that well distributed because we have been super unsentimental about how we distribute it. Like we still do the magazine. There's still 2 million copies a week, but I don't know what it used to be. It was probably 10. Like it's just not that anymore, but we produce so much content, all made by people, all made by writer, all made by every lowercase p people across so many different places that we're like back in the consciousness of things. And the math is the math. Just look at the numbers of the audiences and the reach and how well the business is doing. And we're just, that's like truly our success story.

24:36I mean, the place we're struggling is not people, it's other places.

24:39Peter Kafka:Yeah. I mean, it's not exactly now because I just sort of think of you guys as used to be the business of printing box scores or stock quotes, right? And the internet That just blows that up because you can literally get that anywhere. And it seems like I can, it's impossible for me to not know what Timothee Chalamet is up to at any given second, right? There's just a constant, and pick your whoever the person is. And it just seems in a world where that is just everywhere you can't hold it back, that that is a very tough place to operate if you're People Magazine. I mean. Or People Brand. It's either a tough place to operate or there's a great demand for this kind of content.

25:14And it's a fantastic place to operate. Right? So just because it's tough doesn't mean, I mean, we dwarf everybody. We dwarf TMZ and we dwarf us and we do all this. It has a lot to do with the fact that people want the Timothee Chalamet information from us. All right. And if we can look, I'm not like making, it's not like a, like all these things are sort of what I like about our business now. And what I do like about being public essentially is being public is a pain in the ass for many reasons. but the truth is spoken for us like we're not making this up like this is really working you

25:50Peter Kafka:can't say you can't see it but trust me there's real demand totally sound like well we were profitable last year if you add back these 19 things like if you don't include all of our expenses we made a lot of money like you can see what we're doing we'll be right back with neil vogel but first a word from a sponsor hi i'm bernie brown and i'm adam grant and we're here to We're going to invite you to the Curiosity Shop. A podcast that's a place for listening, wondering, thinking, feeling, and questioning. It's going to be fun. We rarely agree. But we almost never disagree. And we're always learning.

26:23Peter Kafka:That's true. You can subscribe to the Curiosity Shop on YouTube or follow in your favorite podcast app to automatically receive new episodes every Thursday. For the last 10 years, everything in American politics has basically revolved around one man. And as a political journalist who came of age during Donald Trump's rise in 2016, I've had a front row seat. I am officially running for president of the United States. It's going to be only America first. America first. Thousands of supporters of President Trump stormed the U.S. Capitol building. But is it possible to talk about politics without talking about Donald Trump?

27:07That's the question I'm going to ask in our new show from Vox.

27:11Peter Kafka:The idea of like a post-Trump or not exactly Trump-focused show can exist because he's not really driving any agenda items. It really does feel like so reactive. You know, I think this Iran thing is also going to cause a big split in the GOP. So far, it doesn't among like people who say they're MAGA voters are still with Trump. But like for the first time, you see on a major issue, open opposition from the start of this war. I'm Estet Herndon and welcome to America Actually.

27:41And we're back.

27:42Peter Kafka:We've talked about you moving away from Google sort of earlier than other folks and away from that platform dependency. And then at the same time, you are cutting deals with AI companies that many sober, rational people believe are going to be like the other platforms, but even worse because they're going to give you less. And if you thought that being batted around by Meta or Google was rough, wait till you see what happens when ChatGPT's newest set up your daily news thing is available to everyone and no one ever goes to a website again. So walk me through your logic in doing these deals because you're aware of all those issues.

28:23Yeah, we're very aware and we've been very much at the front end of doing these deals.

28:28Peter Kafka:So what I would say is if you take a step back. I should do the disclosure. Both media companies I work for and with have open AI deals as well. If you zoom out and you think about what an AI company, right, at LLM needs, they need three things. They need a model, they need a lot of power, and they need data to put in that model. The world is currently out of data. Everything that can be crawled has been crawled, right? There's a little new stuff created every day, but that's about it. And who's making that is us. So we're very important, plus we're a source of truth for everything else. We did an open AI deal first, and then we did soon thereafter deals with Meta and Microsoft, and we're talking to everybody.

29:09The real discussions got kicked off last summer in July when we essentially took our content off the internet for the purposes of LLM crawlers. We blocked everyone using a partnership with Cloudflare. Cloudflare has been great. We helped them develop it. All of a sudden, when our content wasn't around anymore, people seemed to be able to figure out the value of it, Where before that, they just couldn't figure out what the value was, right? No one is going to work on their own benevolence here, which we know.

29:35Peter Kafka:Just to stop there for a second. So you said you could no longer get our stuff, OpenAI or whomever. Correct. Just scraping it. If you want it, you've got to pay us. And again, the pretty standard conventional wisdom was, well, maybe they're going to need you for this specific thing or that specific thing. And yes, they need new news, but there's so much of it. If they're not getting the latest Timothee Chalamet update from you, they can get it from somebody else. They can get it from someone who summarized your work. Very possible. That your stuff is not worth nearly as much as you think it is.

30:04Peter Kafka:It's your entire business, but to these guys, it's a fraction of a fraction and it's substitutable. Maybe. It's possible. I don't think that's true based on what's going on and what has happened, but it's possible. So this has evolved for us and there's two types of deals for us, right? And people, we produce a ton of new content every day, every month. They want that. They want our historical archives. They want our videos. They want our pictures. They need our things. And remember, we're not news. We're not traditional news in that sense. We're all of these called enthusiast categories, whatever, the old service categories.

30:38Deals are working two ways, it seems. One is the all-you-can-eat deal, which is people can have all the access they want to our content for the purposes of some consumer model.

30:49Peter Kafka:That's essentially OpenAI, and that's essentially what we did with Meta. And it's one price no matter how much your stuff, how much of people's stuff, how much of people's stuff gets used. Plus or minus those accelerators and all kinds of stuff. But it's essentially a, we have one deal with them and it's however they pay us. They get unlimited access to all of our things. The other thing is Microsoft's a marketplace. So for everyone who uses Azure or Azure, I'm going to pronounce it Azure or whatever, that needs to power an LLM model. that is all their corporate clients that needs rights-cleared things for their model, which is very important, will theoretically pay more of an a la carte as they build their models and do their things.

31:27And we help Microsoft create this thing, and we're very optimistic about where this is going to go. This is going to end up being for smaller clients, and particularly for corporate clients, I think, and this is going to end up being much more of a consumer side. What's the unit that they're paying for?

31:41Peter Kafka:Is it per crawl, per article, per thing retrieved? Everyone wants to solve that problem now. it's not totally solved yet because it's all everything is so new like to use like a shitty sports analogy we're like first pitch not even not even like first inning um so that's the that's the the landscape and we're talking to other people about doing other things similarly falling into these two buckets there is a chance we are 100 wrong on all of this there's a chance that we're 100 right the truth is probably somewhere in between right now i think it's leaning towards right. In case we're not right, none of our deals are more than a couple of years long.

32:17Peter Kafka:So if you're getting abused, it turns out you are getting abused by OpenAI. Then we can deal ends and we can redo and we can figure it out. The interesting thing is the biggest player in the space is Google. And Google is set up right now that they use essentially one crawler for search and for AI because they know that it is not blockable by us. They're still a big part of our business. We can't block them from search. So that's a major sticking point. So Google searches your website, which you want them to do if they're going to send you search traffic. Correct. They also using that same crawl, go ingested for their model, which you don't want to happen without your permission.

32:56Peter Kafka:Correct. And that's why you call them a bad actor. Not because they're screwing you on referral traffic. No, no, listen. You're unhappy about that, but that's not. No. That's business. So the number one thing we don't, I will never complain about an algorithm doing things in the industry of that algorithm. But what they're doing now is, again, I'm not a lawyer. I don't know what power they're abusing, but they're abusing market power because they know that they can't be turned off because we all need search. And you are suing them over that or you attach yourself to it? We have a different, there's a different lawsuit going.

33:24I'm not a lawyer about ad tech. And they've already been found.

33:27Peter Kafka:I don't know what the word is. Why do you think other folks aren't suing Google? I hear a lot of quiet complaints about Google from people like you. and not many people are actually going out and fighting with them. Again, I think we've been very public about our complaints about Google. We have not been quiet and I have no idea what their opinion of our opinion is. I'm sure we disagree on things. My concerns are economic. We are not looking for like, we're not going to get some legislative relief or whatever. I just think it is unfair that we make content and if they choose to not pay for it, they can still take it.

34:08And that's not right. And there is no academic argument that makes it right to us where everyone else has said, you know what? You are right. We are going to pay for it. And if our content isn't valuable, then let us block it so you can't have it. So clearly our content is valuable because they won't let us separately block it, but they also refuse to pay us for it because somehow that's too complicated when everyone else seems to have figured it out. But I don't want this to be about Google and complaining because, like, here's the thing. We're still—we live in a world that has a current set of circumstances.

34:40We're just going to deal with these circumstances, and we're actually doing great.

34:43Peter Kafka:So we'll move off Google, go back to the LLMs you are working with. You get cash from them. Is part of the other premise that they're going to refer—I mean, there's links in chat GPT. I use them when I'm doing research, but I can't imagine anyone else does. We get a de minimis amount of traffic, but none of these, I don't believe going forward that there is going to be material traffic sent to us from an LL. We're not replacing Google or Meta where we're used to do that. I mean, if it happens to be great, but there is absolutely no part of our model that says that's going to happen. So if you know that going in and you're purely just selling them data for money, and there seems like there's a very good likelihood that not only will, right now they've got a product that really doesn't send you traffic, that will accelerate, right?

35:35Peter Kafka:It'll just be stuff that has things people care about. Some of it will come from you. They'll pay you some money for the fact that they're getting that information from you. But not only will people not go to your site, they won't know that that came from people that will weaken your brand. Aren't you creating another hole for yourself? Potentially we are. But I think the case that you're outlining is search. Like that's what, that's search. And we've already lost more than half of our referrals from Google and we're fine. If we lose even more, we're still going to be fine. the trick for us is our content has to be good enough and our offerings and our videos on instagram and the episodic dramas we're doing on youtube and our events and even our print magazines which is a very very small part of our business they have to be good enough to stand on their own with brands that resonate and people care about now what has happened which has been like a benefit to us that has been unexpected as we've done all these like inversion things like more events in an app and this and that.

36:38It turns out that in this current environment, with a lot of uncertainty, both in media and like in the broader universe, people default to brands because they trust them. People don't know what's real. They know that they don't just want an LLM answer or an artificial experience. And I think part of the reason why we're doing really well is we have brands that mean something. I'm not a guy that's like, oh, a brand's not your friend, but it means something to you. Like people mean something. Real simple means something. Food and wine means something. Serious eats means something. Like they mean something to people that cuts through this clutter.

37:16Advertisers like it and consumers like it. The other thing that's happening on the advertiser side of this, which is really, really interesting, is 20 years ago when you and I were like, maybe not even that young in this business, but we're in this business, everything was premium, whether it was tv or magazines or even the early web everything was premium now nothing is premium everything's a platform it's mad it's instagram it's whatever it is it's all platforms and we're still premium so all of a sudden we have this crazy reach we have increasingly direct connections we have more of an open field run in what is a premium branded place all of a sudden like I like our chances.

38:00We have a real differentiation from what is happening on Pinterest or what is happening on Instagram than we ever had before we were competing with people that looked like us.

38:12Peter Kafka:We'll be right back, but first a word from a sponsor.

38:24Peter Kafka:And we're back. You said earlier, we tried to build our own brands for About.com. We turned the health vertical into VeryWell, and we did a good job at that. And then we bought these real brands and realized what a real brand is. What has that taught you about building a brand and or maintaining a brand? When we bought Meredith, the Meredith-Time Inc. Combo, we knew that we needed brands that were stronger than ours, but we didn't understand what that meant. And how we very quickly understood what that meant when we had a playbook. We had a really good playbook. We built very well to be the second or third biggest health site on the internet.

39:03We built the Spruce. It was the biggest home site on the internet. We did these things in like five years from the carcass of about.com because we were really, really good at making content and really, really good at the internet and early social and all this stuff. It turns out that when you do that playbook and you run that playbook on Better Homes and gardens and Southern living and people, if the angle up was like 45 degrees for our brands, the angle up was like vertical for these brands. Because humans, algorithms, platforms, everybody loves a brand. They trust the brand. They know what it means.

39:35Like with the spruce, you had to teach someone what the spruce was. You had to teach about the content.

39:40Peter Kafka:So the answer, the way to have a brand is to have someone else build it 50 years ago? So in the context of our kind of brand, I think it is virtually impossible to start a new one now. So if you guys today said, you know what, there really is a space in consumer electronics. There isn't. But let's say you wanted to go after that. You would say, well, let's go buy a thing that does that already rather than try to build our own. 100%. I'd either buy one that did it already or we would find one of our brands that was permission to do that. But in the case of tech, we'd have to buy one. For instance, we have this tech brand that you've probably never heard of called LifeWire.

40:12at one point lifewire was like a top five tech site on the internet because we were just so good at the internet now it's not still a great site but it's tiny because all the things that we can do with food and wine like where we can do everything from events to talk about this part of our like immersion stuff we're going to launch a wine club we're going to launch this all can't do any of it with lifewire because it doesn't mean anything to anybody it we were we could hack the internet and get traffic but they weren't brands the question is like well if if you guys are been so incredible at rejuvenating these old Time Inc brands, these old Merith brands, how come we're only growing 14 %?

40:48And the answer is because those are up, ours are down, and the delta is 14 % in many instances. And thankfully we did it, right? Some of it, we catabolized our own audience, but having these audiences associated with these brands is much more durable than Neil Day. How do you think about that?

41:06Peter Kafka:Like try to measure the half-life of these brands, right? Like, there was a time when everyone knew what Life magazine was. And now no one does, except, I guess, for Karlie Kloss, because she bought it, I guess. They did. They licensed it. There you go. So, or people one day. What our job is, is to identify the brands we like and make sure there isn't a half-life. Like, we're on the other side of it. We're taking brands that, at one point, were on a half-life, and we have gotten them going. Now, we've not been able to do that with all of our brands, right? But I'll be very honest, like, we would love to have done this with parents.

41:41Can't get parents to go.

41:43Peter Kafka:And why do you think that is? Do you think it's about the brand or do you think it's about the space? Well, the space is, I mean, our whole audience is parents that should be good. I think it's— Is it because there's so much other parenting stuff? Yeah, there's so much other parenting stuff. And the service-y content stuff that parenting used to do has just been eaten up by AI and by search. And I think we miss the window. and there's all these incredible people on social, on YouTube that are answering these questions and doing these things. And we've just been unable to get it going. We've been unable to, and there's a whole, I mean, we have 40 brands.

42:16There's, again, seven or eight that matter. Most of the brands we have still have one or two things that really resonate and really work. But our whole focus is on these big seven because to make sure they don't have a half-life is an incredible amount of effort. on the on you know we're 3 500 people i'm gonna guess i'm gonna get these numbers wrong 2 000 of them are creative or creative adjacent in some way or supporting creatives in some way making stuff because the other thing we believe and we've always believed is if you are cutting creative expense you're dead you're doomed and everyone's like well ai is gonna make you not need no answer is going to let us make more stuff.

42:57And if you can make more really great stuff, you have like a real chance. Because in this distributed world, you don't know what's going to work. So like we get a lot of questions and our board is, you know, it's like David Rosenblatt from DoubleClick and Michael Eisner and Barry Diller and Bonnie Hammer and all these people. And they'll ask you like -

43:16Peter Kafka:All people who've seen their businesses disrupted. All people who know what it looks like, right? And they'll be like, well, how do you know what content to make? And we always make the joke all the time, like, half our content is not going to perform. We just have no idea which half. And you just got to make it all. And if you try and slice it too thin, you're just going to lose. Cannot let you leave without talking about Barry Diller, because it's entertaining to talk about Barry Diller. I always have the same question for you, which is, does he care about this? I know he does, because it's his business and it's a growing business, but it's not sexy.

43:50Peter Kafka:whenever he's interviewed constantly, he's always being interviewed about Hollywood and what this studio ought to do and what a good streaming strategy is. And maybe he'll buy CNN, but he hasn't been in Hollywood for decades now. That's the thing he's still talking about. When you're talking about improving yield on a people.com page, does he glaze over or is he into it? I can't speak for Mr. Dealer. I spend a lot of time with, I can show you the inbox of my phone and tell you that he really cares. What I would say is he has believed in us from the jump, which from the time we were about dot com and we went to him and said we need to change this and launch brands through today.

44:25I mean, he's given us a couple of billion dollars to buy Time Inc. and Meredith. And I think I would hope to think that he's very proud of where we've landed now as this like profitable, stable, growing media business that has brands that America cares about that he cares about. Like, Travel and Easier is the biggest publication in high-end travel. Nobody knows more about travel than Barry Diller, right? Between Expedia and I'm Jim Grant. He's incredibly helpful with his ideas. Like, we go through people. We go through food and wine. And I don't want to speak for him again, but I think what is most interesting to him is what's most interesting to me and to a lot of the other people is that all of us are roughly the targets for the things we're making.

45:09So it's easier to understand what's good and what's not. And when you say to people, like, don't throw an event you don't want to go to. Don't write something you don't want to read. Don't put out a recipe that you haven't made that isn't great. Like, he really gets that. And look, every day working for Barry Diller is not Christmas. But that's kind of the good part, too. Like, he calls it creative conflict. Like, the encouragement of the argument. And, like, best idea wins.

45:33Peter Kafka:What's a particular non-picnic day you can recall? I mean, there's always non-picnic days. Is he still a yeller? No, I mean, is he, I mean, I'm a yellower too. Yeah, because you're not supposed to do that anymore. That kind of management is supposed to be gone. Well, again, like what I would say is like, it is not always the easiest room, but it's a fun room. Okay, I want you to keep your job, so I'm going to stop asking about Barry Doerr. Well, I'm not going to ask you anyway, I just keep talking like this. Yeah, exactly. At the end of the interview. Look, it's fun. Again, if you just zoom out, fact to the fact, she's been nothing but supportive of us.

46:06I mean, we were these knuckleheads with about.com, and then we bought the biggest print publisher in the world, And like, you know, so he has the vision for this, which is pretty incredible.

46:15Peter Kafka:Neil Vogel, CEO of People Inc. Thank you for joining us. Maybe we'll continue to have that title next time I see you. Well, maybe it will be something else. Thanks, Neil. Thanks. Thanks again to Neil Vogel. Nice to see him in person again. Thanks to Charlotte Silver, who produces and edits this show. Thanks to our advertisers who bring this show to all of you for free. Thanks to you guys for listening. See you soon.

46:40Oh