Where the market goes, the magazines follow. The money these days is in the "New Economy" -- or Net economy, or technology industry, depending on the jargon du jour. And so the publishing industry is jumping to address the growing population of managers, businessmen and financiers who hope to wrest every last dime out of their modems and CPUs.
This week, maverick-geek publishers Imagine Media launched Business 2.0, a tech-business monthly with the tag line "New Economy. New Rules. New Leaders." Business 2.0 is only two months behind the Industry Standard, IDG's weekly "Newsmagazine of the Internet Economy." Both of these magazines are up against the upstart Fast Company ("The magazine about work and life in the new economy") and veterans like the Red Herring, Upside and Wired.
It's a tight market, with increasing competition from mainstream newspapers and magazines, as well as the daily reporting available online. Why do these magazines think they can survive? Just how many people are really interested in the rise and demise of each new wave of hot start-up companies? And what happens to this whole genre if the Net balloon bursts?
Salon asked the publishers and editors themselves: James Daly, editor in chief of Business 2.0 (and a former Wired editor); John Battelle, publisher of the Industry Standard (another former Wired editor); Tony Perkins, CEO and editor in chief of the Red Herring; Richard Brandt, editor in chief of Upside; Dana Lyon, the publisher of Wired Magazine; and Pat Hagerty, publisher of Fast Company.
Why does the world need your magazine, and how is it different from the slate of other technology business magazines?
Daly (Business 2.0): Business 2.0 is a magazine which is designed for people who need to survive, to thrive, in a rapidly changing business environment. We call it a survival guide to the New Economy. I think [technology] is going to be the most important thing shaping our world over the next 5-10 years. It's going to ripple through our culture, our society, our politics.
We're for people who see an enormous promise and potential in these changes, want to ride these changes instead of being ridden by them. Right now, there is no magazine that covers those kinds of issues in depth and detail.
Battelle (The Industry Standard): None of these other magazines has created publishing models that are entirely devoted to serving the population of executives who are responsible for Internet business strategies. Which means that none can speak to these people directly. One point eight million people read the Wall Street Journal, so they're not exactly going to have the level of detail or analysis as we can. And News.com is News.com -- in no way does it feel like a weekly magazine.
I've always married myself conceptually to the Economist -- the reason being that the Economist doesn't make any pretensions to tell you everything that happened in the news of the world, but it does make pretensions to tell you all that's happened that's important and have an informed, intelligent reportorial style that gives you a take-away.
Perkins (The Red Herring): Red Herring's mission remains focused on the major trends in technology business; by technology, we have probably the broadest umbrella of industries: We look from semiconductors to digital Hollywood to enterprise software to cable and telecom. We look for the most important strategic trends -- discerning the six-month to three-year strategic direction of the biggest and most important companies in technology.
If you look at the Red Herring vs. these other publications, what I would propose is that the Wireds are really out past that two-year window (it often ventures into science fiction), and on the other end of the spectrum, you have the Industry Standard, which is really a news publication looking at what happens today. The Red Herring falls between Wired and the Industry Standard.
Hagerty (Fast Company): We're a different kind of business magazine. The people who read Fast Company aren't as interested in the Lou Gerstners of the world as in the other people who built IBM -- the people behind the scenes who do the day-to-day stuff. Our psychographic is interested not just in how their work lives go, but also in their personal lives -- how to balance the two.
Given the choice, why would the world read your magazine instead of the others?
Perkins (The Red Herring): I was with Bill Gates in my last interview with him. He said, "I read Business Week and Fortune and Forbes to understand how the rest of the world is viewing the technology market and my company. I read the Red Herring because my competitors tell you things they would never tell us." That's our ultimate goal -- to add value to the thinking of a Bill Gates. If you think about it, they're thinking about that six-month to 20-month window; what's happening today is basically done. They've already made that decision a long time ago.
Brandt (Upside): There is too much gee-whiz coverage of technology these days. We tend to have a bit of attitude. We're not afraid to tell executives, or the industry, when we think it is wrong. And we do it as strongly as we can. We have a lot of venture capitalists and entrepreneurs who read the magazine, as well as the big business executive. Bill Gates and Andy Grove and Scott McNealy -- we know they read us, because they complain to us all the time.
Battelle (The Industry Standard): My hope is that things will settle down, people will go to what the normal capacity for human information input is, they'll return to their sanity and start reading the weekly Industry Standard. How the hell are you going to stay up with global politics, if you were to read everything ever published about global politics? You can't. But if you're a decision-maker in global politics, you get what you need through various sources you get, and you read the Economist.
I don't think that the target audience for a well-produced monthly is so huge that five of them can exist. I'm not sure that they will all be able to survive if they all go after the New Economy story. But there are no other weeklies doing what I'm doing. So I'm pretty comfortable.
So just how big is the audience for technology business magazines?
Daly (Business 2.0): I can't really even guess at the top of it -- this is such an enormous story, and it's impossible for me to spin it out and see if there's a cap on it right now. The ramifications of this are so huge ... Instead of demographics, we look at psychographics: what's driving a person. We're going after "visioneers," people who have a sense of this promise and have the wherewithal to do something about it, to seize hold of what's going on right now.
Battelle (The Industry Standard): It's a very tight, and by that I mean small, market right now. If you look at this as a pyramid in terms of size, the foundation of the pyramid is 100 million people on the Web worldwide. That's the general market, the Internet market, the people everyone's going after [as customers]. Above that, according to a recent IDC white paper, there are 626,000 builders, people whose jobs are to build, Web-enable, Net-enable the economy, in whatever industry they are in.
But there are only 80,000 people who are architects, the senior-level strategic decisionmakers, who employ the builders to take advantage of the big market of 100 million. That is exactly what our circulation strategy is -- to own the top of the pyramid.
Will the advertising market support this many magazines?
Brandt (Upside): One has to admit that the reason that all these publications are getting started is not because of the audience, it's because they see all the ad reps out there. That's what everyone is looking at.
Lyon (Wired): There's a definite ad market there. Technology advertising is growing substantially. Even though there's a decrease in hardware sales this year, there's been an increase in other Internet-related things: telecommunications and financial advertisers who are going online. So for everything that we've lost, we've gained again with a new upswing.
But business advertisers can only go so deep -- let's say they can afford six magazines. After a while they say, OK, I've covered the business category. This other category that Wired defined is really about where technology and culture meet -- it's more profound than just business, it's got world implications. The kind of things that aren't just for me-too managers.
Perkins (The Red Herring): I would challenge you to count the number of ad pages in the Industry Standard -- it just hasn't grown. Fast Company has been very successful, but they're hitting a wall on subscriptions, which is disrupting their strategy to be a big circulation magazine. Big publishers feel they need to have 300,000 subscribers or they don't have a legitimate magazine. That was Wired's fault. Though I think Fast Company has operated with more experienced people, so I don't think they'll blow the tens of millions that Wired did.
In order to come out a winner in this market -- and eventually compete with big magazines like Forbes or Fortune -- will these magazines need to have mainstream appeal? A global appeal?
Perkins (The Red Herring): Will the Red Herring stand alongside Forbes one day as a competitor? I doubt it. But clearly the mainstream publications have to extend their coverage of the technology industry. And as long as the big publications are covering the "Business of America" -- from cosmetics to donuts -- they are never going to be able to cover the technology industry as thoroughly as we do.
Lyon (Wired): What Wired hopes to do is stay as broad as it has been, covering this as a phenomenon rather than going after the Internet or business leaders specifically. The kind of reader we have comes from all walks of life, from graphic design to educational systems to the chairman of a large company. It's much more broad, and as a result we're going to be able to grow bigger in circulation. We're at 425,000 right now, and are growing at 100,000 a clip.
Wired is pretty hard to come after, because it started out with a very solid idea that was global in scope, and it did it very well. Anything coming after Wired seems like it's going for only this little piece of that idea.
Brandt (Upside): Obviously, Upside is based in Silicon Valley and it's the center of the technology universe. But we are moving more into global coverage, though it's difficult to build up the quality of reporters that we want. This is a global industry now -- borders disappear on the Internet, so some of the biggest and most significant companies are often overseas ... We are interested in starting magazines in Asia, Europe and South America. Though you have to be careful about that.
Numerous consumer-oriented Internet magazines (the Net, the Web, NetGuide, Internet World) have shut down, partly because of an overcrowded marketplace and partly because of competition from the Internet itself. How does the Internet compete with your magazines?
Daly (Business 2.0): The stuff the Net provided probably would be better served online, but the way we present this can't be presented as well online. The online medium is great for rapid delivery of information. It's not good to read a 4,000-word story online -- your eyes will pop out of your head. Print's an amazing, rich medium which allows us to present stories the way we want to present them.
But at the same time we've recognized that what the Net does really well ... is allow you to navigate stories really well, to get to multiple levels. So we've created a few new things in Business 2.0 -- the table of contents is on the cover, so you don't have to dig to find it. We've also created this navigation bar that shows you what section and subsection you're in, so wherever you are in the magazine you know where you're going and where you've been. We also don't jump stories -- so there's no graveyard of three-paragraph stories at the end. We've created a lot of hyperlinks, so you can stop and get into a person or idea.
Perkins (The Red Herring): It's a little bit ironic that a weekly publication that is supposed to be about the Internet started off on paper. By the time I get the Industry Standard, have I already read everything they're writing about on the Web? That's going to be a problem for them.
As the Internet grows and becomes less of an industry than simply an enabler for many other industries, how will that affect your publication?
Daly (Business 2.0): Right now when people think of the Internet industry, they think of high technology, but we're beginning to see that's not really true anymore. Amazon, for example, is in the book industry -- they're not a high-tech company, though they're using technology as a delivery method. The delivery of movies to your PC -- is that an entertainment story, a tech story, a distribution story? Well the fact is that it's all of them.
Battelle (The Industry Standard): The metaphor I use for the Internet story is a very large stone that's been thrown into a still pond. When it hits the water, there's a huge splash. That was last year, when suddenly everyone said, "Holy shit, what just hit the water?" ... It was a big splash. It is still splashing right now, and there are big ripples coming out of the splash. Everyone's attention is focused on this Internet thing.
But that's the stone. That's going to sink to the bottom and be a relatively boring story, and if you only focus on the stone, you lose. That's verticalizing your market. The truly interesting story, which will take years to develop, is the rippling effects out through the pond. That story is our story: both the splash, because we've got to cover the industry as this thing starts to happen, and the rippling out into the economy.
The technology industry is hyped right now, and some say vastly overvalued. What happens to these magazines if there's an industry slump?
Brandt (Upside): It's certainly going to happen to some companies. A lot of people including myself have been warning readers about serious corrections in technology stocks for several years. It hasn't happened yet ... But certainly some of these companies with huge valuations are going to fail, and when that starts happening, no one knows how much of a correction there's going to be. Look how fast Asia declined. Would that sort of thing happen in the U.S.? Personally, I doubt it. But there could be disillusion.
For magazines like Upside, this affects advertising -- if the technology stock market really suffers, if companies start suffering, that's going to seriously affect the advertising dollars out there. And that's where these technology publications focused on business are going to have to suffer the consequences.
Hagerty (Fast Company): Technology is a part of our business, but it's no more than it is for main-line business magazines. You go through Fast Company, and you see airline ads, liquor ads, car ads -- it's not all technology advertisers. I don't believe our percentage is any higher than Fortune, Forbes, Business Week. Whereas the Wireds of the world and Business 2.0 are after a techie group of people.