NYT "journalists" simply quoted Florio on September US Vogue
and its "amazing" performance - real journalists, who like to probe things further, had much more to say on the character and Conde Nast
- the text is from a 1998 Fortune
magazine issue. That was back in the "Wall Street bubble" era, so the numbers are probably even worse today, despite all their Bridal/Teen mag acquisitions.
Notice how Conde Nast
uses advertiser "marketing support", in exchange for the full rates they charge...
"...This past Memorial Day weekend, Steven T. Florio, the president and CEO of Conde Nast Publications, made a dramatic change at The New Yorker...He fired his own brother...the four years Tom Florio was president of The New Yorker, it lost $60.6 million...
Steve Florio turned a mildly profitable property into one of the greatest money pits in American magazine history. On his nine-year watch, The New Yorker dropped almost 1,300 ad pages and lost $114.4 million. In all, FORTUNE has learned, The New Yorker has lost a stunning $175 million under the two Florios.
Conde Nast is a privately held company, part of the Newhouse family's famously secretive media empire. It has no public shareholders and no fiduciary obligation to turn a profit. For a long time nobody cared much whether Conde Nast and its magazines made money; the question was more a parlor game played in publishing circles.
Certainly the 70-year-old Si Newhouse didn't seem to care. He is worth an estimated $4.5 billion. His magazines reward him in other ways--in the Manhattan currencies of status and buzz. They include some of the most important titles in their fields, including Vogue, Vanity Fair, GQ, and Glamour. Reaching more than 75 million Americans each month, Conde Nast magazines help set the nation's tastes...
Conde Nast remains a woeful underperformer; at a time when magazine companies are comfortably producing profit margins of 15% and 20%, Conde Nast doesn't even come close. FORTUNE has learned that as recently as 1996, the company earned around $55 million on just under $750 million in revenues--a profit margin below 8%. And that figure doesn't include either losses coming from The New Yorker--which had always been kept separate from the rest of Conde Nast--or some $20 million in startup costs for new magazines....But there is another dimension to Florio's way of doing business that raises eyebrows. Even his supporters acknowledge that in Florio's hands, truth is a fungible commodity. Inside the company it is well known, as a former executive puts it, that "anytime Florio tells you a number, you should cut it in half." Virtually everyone interviewed for this story--whether friend of Florio or foe, current Conde Nast employee or former employee--agrees that Florio has a compulsion to exaggerate and even to make things up...
Over the years, advertisers had learned that by playing one magazine off against another, they could force the industry to give them big discounts from their basic ad rates. So common had discounting become, in fact, that to make up for the lost revenue, publishers had been forced to find new ways to make money...magazine executives started to look for "ancillary revenues" from such things as licensing deals and television specials. More important, publishers began looking to circulation as a key revenue source. They adopted aggressive pricing strategies, raising the prices of both newsstand copies and subscriptions. Over time, most publishers achieved a fifty-fifty balance between advertising and circulation revenues. And while circulation was still less profitable than advertising--because it's costly to replace readers who let their subscriptions lapse--it could be turned into a profit center in its own right.
Conde Nast never adopted this model. Its position was that it didn't have to change because it had never had to stoop to discounting from the prices on its rate card. But in truth, Conde Nast--especially under Florio--found ways to adapt to the new realities. One example: Conde Nast spent enormous sums--tens of millions of dollars more than its competitors--on "marketing support" for its advertisers. A fashion house that bought pages in a Conde Nast title might have its next show underwritten by the magazine. Or the magazine might pay for the fashion house's billboard advertising. Or it might conduct consumer research for the advertiser. Usually the dollar amounts for this marketing support would be negotiated as part of the deal to bring the ad pages into the magazine. Thus while the company could technically claim that it wasn't discounting, its practices had the same diminishing effect on the bottom line...a more telling picture emerged in 1995. That year ad pages increased by 1,100--yet profits only went up by $400,000 (and remember, that profit figure does not include startup costs or The New Yorker's losses). Why so little additional profit? Because these new methods of acquiring pages--whether through the corporate buying program or marketing support or so-called advertorial sections--were costing the company dearly.
Here is where one could most clearly see the essential Conde Nast illusion: Page growth did not necessarily translate into increased profits...Throuhgout, Conde Nast's margins have remained embarrassingly small...Florio...has continued to show a compulsion to stretch the truth. He told a trade magazine in 1997 that the company's revenues were "very, very close" to $1 billion, when they were closer to $800 million. He enjoyed telling the press about the company's "great margins." In 1995 he appeared on the Charlie Rose television show and insisted that Vogue's circulation was larger than its three biggest competitors' put together. In fact, their combined circulation was almost twice Vogue's...Florio loves to gloat about the fact that Conde Nast has more total ad pages than its archrival Hearst. But the financial reality is somewhat different. Unpretentious Hearst makes twice the profits of glamorous Conde Nast..
The gruesome numbers for the first half of 2005 - or why you may soon see Whataburger advertorials in AW's rag...
I also read somewhere that the average US Vogue
reader has a rather low $59,000 yearly income, below that of other fashion mags which are often bashed by AW's cronies - and hardly one that supports the image of the upper-class Vogue
What is really interesting - and puzzling- is how Florio and the Conde Nast
bosses allow A Wintour to play her personal games and in the process seriously damage Conde Nast
revenues -with impunity. One example is the episode when Giorgio Armani, after being constantly snubbed/rubbished by AW's minions, withdrew his advertising from US Vogue
- the Conde Nastie bigwigs had to travel to Milan to beg Giorgio to reconsider (#4 story here
). Any other editrix would have been fired - but it seems AW is the one who issues diktats to CN management.
This strange behaviour led some people to suggest that AW's installation as the fashion "trendsetter" may perhaps be part of a bigger plan, which has to do with New World Order reallocation of worldwide resources. Since the early 90s, the Europeans - mainly the French and Italians - are being pushed out of certain business areas where they used to dominate, and the spoils are divided between the Anglo-American axis members. Fashion biz effective control was given to the British, who need more than just fashion sales revenues - namely an outlet to provide employment for the masses of Art School graduates who the UK economy alone cannot support. The fact that Paris/Milan were flooded by British "fashion workers" after the mid-90s, when a number of UK/US designers were given control of the major European fashion labels, may be just a coincidence. Tom Ford run Gucci
from London, while AW, who currently advocates "upgrading" the status of London FW, constantly snubs the 70 billion dollar Italian fashion biz - except for a couple of major Vogue
On the political side, the stripping away of "Old Europe" power has been demonstrated in Africa, where the French, throughout the 90s and even today, are losing many of their client states through nationalist or Islamic insurgencies - with the new rulers being more favourable to UK/US interests.
The fact that public media criticism of AW has disappeared - while she was often a target of nasty attacks before she established her power base in the late 90s - is also noteworthy.
All this may be purely coincidental - it could be just a story of alpha female dominance over weak males in fashion...yeah, right.