The Pomp Podcast - #379: Keith Grossman on The Future of Media

Episode Date: September 8, 2020

Keith Grossman is President of TIME, where he leads the business operations of the company, including global advertising, marketing, and their digital and consumer businesses. He previously served as Global Chief Revenue Officer at Bloomberg.  In this conversation, we discuss the legacy media business model, the rise of creators, the importance of distribution, existing shift to digital, challenges with scaling, and the future of media.  ======================== Athletic Brewing is re-imagining beer for the modern adult. We love beer. But we also love being healthy, active and at our best. No matter your motivation, if you want to keep a clear head and drink healthier, we are here for you. Athletic makes non-alcoholic beer that you don't have to compromise to enjoy. The beers are fully flavored, clean ingredient, and a fraction of the calories of full strength beer - they fit in any occasion. Check out www.athleticbrewing.com for more details and free shipping nationwide. ======================== Pomp writes a daily letter to over 50,000 investors about business, technology, and finance. He breaks down complex topics into easy to understand language, while sharing opinions on various aspects of each industry. You can subscribe at https://www.pompletter.com

What's up, everyone? This is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Let's kick this thing off. Keith Grossman is president of Time, where he leads the business operations of the company, including global advertising, marketing, and their digital and consumer businesses. He previously served as global chief revenue officer at Bloomberg. In this conversation, we discussed the legacy media business model, the rise of creators, the importance of distribution, existing shift to digital, and challenges with scaling and the future of media. I really enjoyed this conversation with Keith, and I hope you do as well. Before we get into the episode, though,

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and finance. I break down complex topics into easy to understand language while sharing my personal opinion on various aspects of each industry. You can subscribe at pompletter.com. Again, pompletter.com. All right, let's get into this episode with Keith. I hope you guys enjoy this one. Anthony Pompliano is a partner at Morgan Creek Digital. All opinions expressed by Pomp or his guests on this podcast are solely their opinions and do not reflect the opinions of Morgan Creek Digital or Morgan Creek Capital Management. You should not treat any opinion expressed by Pomp as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. This podcast is for informational purposes only.

All right, guys. Bang, bang. I've got Keith here. Thanks so much for doing this, man. Thank you. Thank you. I'm looking forward to it. Absolutely. For those that don't know you, let's start with where were you born? Where did you grow up and how the hell did you end up in media organizations? Sure. So, I was born in New York City. As I was telling you, or as you know, at this point, you know, a bubble unto itself. I grew up Upper East Side and now live on the Upper West Side. So, you know, essentially gone very far in my life. And I, you know, went to school upstate New York and joined Condé Nast out of college. I interned at Condé Nast and interned at Wired and then interned at Ars

Technica. I interned at Wired and ran Wired ultimately and then ran Ars Technica and then went over to Bloomberg Media and became ultimately over time the Global Chief Revenue Officer. and then uh joined time and i had a brief stint in between but uh you know mark and win benioff the mark being the ceo of salesforce um and his wife bought time as a private asset and uh you know their vision for it was that you know it's a challenging time for media and they ultimately wanted to make sure that they could preserve what they felt was a you know rational centric perspective on the world for the next hundred years? And how do you modernize that and preserve sort of the integrity and the trust that it's had for the past hundred years?

And so I've been at the brand now for, I want to say a year and a few months. I think when I, you came on board over, you know, to check out the offices. When was that? That was November of last year, right? You know, we just moved into our new offices in Times Square, But I've been in the industry for, you know, close to 20 years now. So your background is not in journalism. You've always been on kind of the business side. And many people are more familiar with the journalism side just because that's what they interact with. They understand, you know, generally that there's writers and that content is what they're consuming.

Help people understand how are these organizations kind of structured from a business perspective. and then as either the global chief, you know, officer of revenue or as president of time, kind of what your day-to-day responsibilities are? Sure. So, you know, when I was introduced to Condé Nast, you know, which is the publisher of Wired and The New Yorker, Vanity Fair, Vogue, the first time I ever heard about it, you know, I knew it too from the editorial and the content side. And when somebody said, you should check it out, my first reaction was, that's a business. and uh and and i couldn't believe it and um and you know what i learned very quickly was there's a few different ways in which you know brands that produce content actually

can monetize themselves um they can do it episodically which is either marketing support right so a big marketer comes in and says they want to buy advertising and some sort that goes alongside the content. They can do it episodically, meaning e-commerce, right? So we sell a lot of items in the time cover store, for instance. Episodically is also affiliate marketing, so like revenue that we could derive from selling products and then taking a rev share off of that, or through annuity streams, which are subscriptions, right? And when you look at that, Right now, we have an annuity stream with the print subscription of Time magazine, but we also have an annuity stream with Time for Kids digitally, and we'll have another annuity stream with Time as we continue to evolve the digital infrastructure of the brand. That's really the two big ways in which a media company makes their revenue.

And so obviously, there is this seismic shift or transition going on. most businesses were, you know, majority ad supported for many, many years, a little bit of subscription on just the actual distribution of physical publications. Talk a little bit about, you know, over the last 20 years, how you've seen that shift occur. Because I think most of the people who listen to this, they're going to be well aware of kind of what I'll steal from Shopify, this idea of like arm the rebels right so this is mostly the the creators the smaller publications they've got their own perspective on this shift to digital but you you've been inside the machine and so how do you think of um kind of that shift or that transition as it's been underway

sure so god how old are you can i ask that question is that a fair question can i ask i feel like we're not a job interview right this is this is a podcast how i mean how old are you do you mind me asking? 32. Okay. So you're 32. Um, that means you have to say how old you are now. I'm 40. Right. And, and, um, but I'm like Benjamin Button. So I like age backwards. So I'm like a 90 year old. Okay. So I just want to be totally clear with this. No, but okay. So, so take this for instance, right. Um, you know, many people that I would say are over the age of 40 have a relationship when it comes to media with the platform, right? So they say print or television or radio. And they mean a magazine, their cable provider or terrestrial radio,

most likely in their car. Under 40 and plus or minus five years, right? Most people have a relationship with the experience that they have, right? So you say TV and you actually just probably mean viewing video on a screen, right? Like you don't have a relationship with what the platform is. And instead, what your relationship with media is, is it's viewing and listening and sharing and touching and reading, right? And ultimately, if it's in print, great, like it might be. And if it's digital video, great. You don't really care, but you don't distinguish between sort of how you want to actually get your content. You just say, I'm in the mood to view, right?

And if that's the case, what's happened in terms of sort of audiences is that the way in which consumers have shifted towards these experiences is very different than the way that media had historically been set up and structured. So it used to be that, like if you looked at Conde Nast, for instance,

where I started my career, they were so dominant in magazines, right? Physical magazines. And there's moats in physical magazines, right? Like there's barriers to entry as it relates to printing and distribution and securing of these paper costs. But what's fascinating about the digital revolution is all of these sort of things that created moats at one point for industries are disrupted because the tools are handed to anyone, right, to create whatever they want. And what happens in that scenario is like the consumer is now confronted with infinite choice, right? And infinite choice, because anyone can create anything now and interact with any individual, seems like it's the most amazing thing on the planet, with the exception of

it becomes extraordinarily paralyzing, right? And so then all of a sudden what happens is in a world of infinite choice, the advantage comes to the content creators that have established trust with their consumers, right? So like you, for instance, have a tremendous amount of trust with your fan base. Like I saw that yesterday when you tweeted out to them, what should we be talking about, right? Like every time you and I interact on Twitter, I get more sort of comments than in any other interaction. That's trust with your fan base. You are a filter in which sort of people believe sort of the topics that you're going to talk about, that people want to see it through the lens of. In that environment, time in this instance acts as a filter. The red border of time

acts as a sort of curator of trust. And people know that if I put the Time logo on anything, right, whether it's digital or physical, that they're going to get a certain type of experience. And that's not just for Time, it's for any brand. And so I think that what happens is that in a world of infinite choice, it actually is a very paralyzing, it's like euphemistic, it seems so amazing, but it's actually a very paralyzing existence. And what has to happen is brands exist to sort of curate and reduce and create filters. So in that world, obviously, time is a great example where you are going to and have done a great job of getting ahead of this transition to digital, right?

And maybe we can talk a little bit about some of the public numbers you guys have released in terms of how that is going financially. But in doing so, you're going to start doing things you haven't done before. And so how do you think through the filter of keeping trust, right? Not doing anything to kind of put that in jeopardy, even though you're going to go do kind of new things, right? So not necessarily things that are new to the user, but new for time as a business. So it's really interesting that you asked that question. And I appreciate it. One of the biggest challenges I think that I face at Time is the evolution from Time Magazine to Time. And the reason is that, and it's not to dismiss the magazine, the magazine's a platform within the overarching brand, but the reason is that for 97 years, essentially, the brand has been delivered and experienced one way for many, many people. And what's interesting is it's actually been neglected for about 10 years by previous owners, whether it was Time Inc. or Meredith, as the industry shifted and changed.

It wasn't sort of invested in on a business end, but consumers still flocked to the brand. And what I found was when Mark and Lynn purchased it and they gave us the investment to start to look at where we could develop. in the first year, what I've really focused on with the team has been building infrastructure and productizing existing areas where we know things work well with our audience. So to give you an idea, when you think about the overarching ecosystem of Time, it reaches about 100 million people a month, right? Time Magazine only reaches 1.6 million people. time.com reaches close to 30 million people time social channels reach over 60 million people

twitter alone 17.4 million followers facebook 13 and a half million followers and so a lot of what we've been looking at has been how do we productize certain areas that already existed but people didn't really think about it because it wasn't getting marketed to their attention so like a A good example is Time for Kids. Time for Kids is an area that's been around for 25 years, but it's only existed as a classroom product, and that classroom product was print only. And when the pandemic occurred, what we looked at was, oh my God, there are parents that are going to be at home, and for the first time ever, they're going to have to homeschool

their kids, and they need a product that they can trust as it relates to age-appropriate sort of news curation. And so we digitized Time for Kids on March 23rd. We did not know what we were going to get into. And as of today, Time for Kids is a global product. It went from U.S. to global. It's in 185 countries and territories, all 50 states, red and blue, which I love. It has been produced in English, which has historically been the only language, Spanish, Chinese, and we're looking at other languages. We've produced creativity shows and a camp series, and over 350,000 people have registered for it since March 23rd. And what we did was, and the way that we really thought about some of our evolution during the pandemic, which sped up every plan that we had for this evolution of this, but what we did was we said, what are the real areas that people are suffering or need help in? like where can we really help people with? And we found that it was parents and teachers and children. So we looked at time for kids. It was mental health and wellness, which is why you saw

the launch of time for health the way that we did. It was executives who said, how do I navigate this moment in time? Which is why we went to Columbia Business School and partnered together to create time for learning, and ultimately expanded time for learning to, you know, Sean Harper at the USC Center of Race and Equity and Zoom to do a thing on race in the workplace. And it's also why we partnered with Red Ventures to launch NextAdvisor as it relates to personal finance, right? And so like when you think about all the launches that we've done in the past, you know, 90 days to 100 days that i alluded to in my note they were all based on looking at huge societal trends and then leaning into that and that was where we we looked at our permissions now along that way

we launched other things too and at varying degrees of success like we saw that when we did time for giving theoretically it seemed great but people weren't really into it right so like it wasn't as if we batted 100 but we really did put out a lot of things in the areas that we thought provided either value or utility to the consumer and um and then watched what the response was and when people started to really lean into it we leaned back into it so obviously um there's multiple components or kind of sequential steps that you take right so there's hey we need a product uh let's look kind of in our toolbox that we already have or we can create something new what exactly is it who are we going to target um and then it's actually getting it out from a

distribution standpoint uh many people who see this they say oh of course time can do this right they've got tens of thousands of millions of people who follow them on social media they've got the time brand like this is a walk in the park for them obviously in past conversations with you i know that that might not necessarily be true and so talk a little bit about how you think of like the product creation different from the distribution and kind of how you guys um maybe to go back and forth between the two to ensure that you end up coming up with a successful product, but also one that reaches a lot of people and can become profitable for you. Sure. So, I mean, I was thinking a lot about this question, especially talking to you on this

podcast, given I think a lot of your audience probably looks at businesses through the lens of a challenger sort of lens is that a correct statement right um and and i think that um you know one of the advantages time has as a brand is is it is a very well-known brand it's a very famous brand like i i've yet to come across somebody who doesn't know the brand but everyone always says time magazine right um and and slowly people are beginning to see sort of other things um other areas of the brand comes come to life i think that the way that we navigated q2 specifically right and i think that that was an important moment in time because it was i think every brand no matter who you were was equal at that moment in time like like you saw your fate

and it was a very humbling humbling sort of moment and um and at that moment like what i really wanted to make sure and i know my team really felt was was important to do was be as scrappy as possible right so it wasn't like we didn't launch time for kids after you know six months of market research like we just felt in our gut that this was the right thing to do and it was like we weren't going to miss this opportunity and so um you know we found a partner that was willing to with e-magazines who was willing to distribute quickly we promoted quickly and you know if you remember the day that time for kids went digitized if you look back at your dms on twitter you and paulina i sent you both notes that was like can you please promote this

right like it was like there was no there was no budget that went into it there was no um grand scheme major deck that went into it, it was, you know, a handful of us saying, hey, this is this has to happen. And it has to happen now. Right? Like we've run out of time. And, and I like that. I mean, I, I, you have to remember, like, you asked me where I was where I grew up, like, I'm a neurotic Jewish male, you know, who grew up in New York City, believing that the world was always going to end. I was made for this moment in time. But I looked at it and we were very fortunate that we had great owners. We have great owners that allow us to think long. And as we started to see success in time for kids, and as we start to see things pick up, we were able to take that success

and say to our owners, will you invest in us in this area to allow us to continue to build upon this? And that's how we started to get funds. But we really did it with our existing budgets and everything just shifting around. And there's a great quote. I never thought I would say it from this individual, but it's a great quote from Mike Tyson. And I don't know if you know what I'm going to say. This is everyone has a plan until they get punched in the mouth. And it was like we had these gigantic plans set forth and of how we were going to evolve the time brand and you know q2 came about and it was like a huge wake-up call and it was like what are we going to focus on and we had to really go straight down to core sort of roll up your sleeves brute tactics and so

everything was launched on minimum viable products everything was scrappy there was no incremental money thrown at anything. There was no testing theories. And we succeeded on a few things, which we're leaning into in the second half of the year and beyond. Time for Health was a success. Time for Kids was a success. Some of the franchises, the Time 100 franchise and the Time 100 Talks was a huge success for us. Our ability to think about how we could take Time studios and apply it to network television from a business perspective is a huge success. And then there are other things that we did that just failed. And like, and then we, what you have to just do is, is you have to just say, okay, what are we going to stop doing and forget it?

And like, we tried it. Great. Move on. And I think part of the, uh, the lesson here for people is like having a brand can sure it can help in some cases, but it doesn't absolve you of all the challenges of building a business right now you know like at the end of the day uh you know we we had huge successes for all the successes that i could point to with like time for kids or time for health or others like you look at some of the stuff that we put out like 20 people signed up 100 people signed up like i mean these are real like it's black and white Like, Hey, didn't work. Right. And so there's no, there's no magic that says, uh, because we have this great brand that storied, um, uh, what we touch all of a sudden is successful. What it, what the magic is about the brand is, is that we have established trust that people are willing to at least give it a shot or look at it. Right. And that's where, you know, we have to lean into, and that's sort of our advantage in this moment in time. yeah um i think there's a lot of people who uh are in the startup kind of technology world and

uh they generally write off uh the incumbents in any industry you know media or otherwise uh and they just say look they're so out of tune they don't know what all the new technology is they don't know the new platforms things like that uh i know for you that's not the case you spend a lot of time paying attention to some of these trends i want to talk a little bit about um kind of two of them which is one the rise of the creator so kind of these individual uh content creators that are um um kind of becoming more popular and then two is the platforms really that are empowering them so whether that is the you know shopify's on the e-commerce side there's plenty in the content space but just talk kind of from your vantage point how you evaluate you know these trends

and then kind of the pros and cons um as you see it sure so if i can like i'd love to step back and And just very early in my career, I was very extreme in my viewpoint of things. I always thought it was either like black or white, left or right. And I realized like things aren't that extreme. And David Pogue, back in 2010, before he left the New York Times, he wrote this piece. I thought it was the most brilliant piece ever. And it was called, the title of the piece is, you know, What I Learned Covering 10 Years of Tech Journalism. and what he said was essentially that things don't necessarily things are not as extreme as

people think it is like things don't necessarily kill everything like um when mtv came out and video was supposed to kill the radio star it didn't right but things splinter right instant coffee didn't kill real coffee um you know like uh and you look at this and what you know at the end of the day you could give sure a lot of counter sort of examples of areas where things did kill things, right? Color TV definitively killed black and white TV. The camera in your phone definitively killed point and shoot cameras, but it didn't kill DSLRs, right? Like certain things evolved out. And so I think that the reason I bring that up is that there is value to incumbent brands, regardless of who you are, if you're structured properly, right?

Most incumbent brands can't get out of their way because they're so big and they have such established systems that they can't necessarily adjust to what the reality of the system is. And so when you look at like my background, for instance, right, and you look at sort of what my specialty is, like I like building brands and turning brands around, right? and Wired, for what it's worth, was originally primarily a print business. And it's a technology brand. And we diversified it into becoming more of a digital brand than a print brand. And we really built it up from the 18th smallest brand at Condé Nast to the fourth largest brand, made back every dollar, and was the first brand to cross that chasm of 50% or more revenue being

digital. And part of it to me was just educating myself on consumer behavior and expectation. And I think that the most important book I ever read in my entire life as related to business theory was The Innovator's Dilemma by Clay Christensen. And to give you an idea of what a loser I am, I read it on my honeymoon. So I don't know what you read on your honeymoon. I I know you went to McDonald's, but I read The Innovator's Dilemma on my honeymoon and I came back and I said, you know what? I know exactly how we're going to navigate this to my partner and I said, I know exactly how we're going to navigate this moment.

We're just going to operate on the simple question of, is this a good deal for us? And we're going to shift the way that sellers are compensated so that way they're not protecting a CPM, but they're working in conjunction with what clients' needs were. And also, you know, how they could work within the marketplace with maximum fluidity. In every place I've ever gone, the first thing that I've done is shifted the comp structure of the sales team. So that way, a dollar is a dollar. And most places won't do that because they're historically built on very high CPMs on one platform, let's say print, and much lower CPMs on platforms like digital. And until you're willing to realize that all of those CPM protections that people play

on P&Ls is BS, it's not real, right? It doesn't make a difference. And most incumbents don't want to change the way in which they're accounting and doing their systems and thinking that granularly about human behavior, right, and success. Because the second you shift the way a seller goes into the marketplace and represents your brand to represent the interests of the marketplace, then you get a better outcome than the seller representing the interests of the brand itself. And you can work with the biggest issue at hand, which is the innovator's dilemma and win with speed. I say that all because most incumbents don't think like that. But here's where the incumbent advantage is.

And this is where I look at my advantage. Like I'm a privately owned company, right? And I'm allowed to evolve without ever spending any of my time on the street trying to raise money, right? So let's pretend, for instance, that you're a small startup. I would say at least 50% of your time is on calls trying to raise money, right and i don't spend 50 of my time raising any money i spend a hundred percent of my time thinking about how to make time a better brand and so that is discounted tremendously because people can't see brands being able to do stuff like that because they think it and then there's also the allure of the new like people just love the new um i bring all this together because it's

not i'm not defending um incumbents in the slightest like i actually think that there huge disadvantages to being incumbent um but the idea that it's an either or world is what i would dispute like i think that it's a world that everything sort of exists together and incumbents evolve some some die and some up and comers emerge and most up and comers die right and so so like i think that people don't want to ever look at the world in that view because it's not as exciting. It's actually quite boring. Yeah. What do you think are the advantages of these creators and these platforms that are the up and comers? So most of them will die, but some will thrive. The ones that do end up thriving, what are you not jealous of in terms

of the advantages they have that you might not, but more so just you recognize that here is an area where they are better than us or have a structural advantage that you don't? Sure. So I, in content creators, you know, like at the end of the day, the only thing content creators businesses are based on is, is monetizing trust. Right. And, uh, and ultimately trust manifests itself in how much time is the consumer going to provide me in a given week or day or month um uh with the brand of of that individual um i i you know i i've been an entrepreneur my entire life that works within big companies right like when i was in high school i had computer consulting company like i like the idea of like controlling my own fate and destiny and

i think that what a lot of these content creators all of a sudden realizes is is um unbridled by a larger sort of mechanism they could be more of themselves and they could find an audience where they can be happy just sort of creating um uh sort of a brand that is based on them now the challenge with that is you know most people are 50 successful based on themselves and 50 successful based on the brands that they go to so like if i was faced with the same scenario in q2 But I was at a brand and I'm just going to make up the brand called like, you know, like I just, you know, I was just petting my dog before I came in here. So let's call it like a dog lovers united or whatever. Right. Nobody would care like that.

And I was doing all of these new innovations. And so part of my brand gives me permissions to try certain things easier. and um and then part of the reason that the brand is successful is because of the individuals that are there when you're a creator um you could try whatever you want you have no sort of limitations but only the people that understand the brand or know you uh will accept it and very few people outside of that will give you a shot you know until somebody else has convinced them that they should give you a shot and so if you look at some of the brands out there today that i really admire right, you name Shopify or Substack or any of these others, you know, they give individuals

the tools, but they don't give people the destinations or the distributions, right? They don't give people the means to allow other people to identify or explore them. And so, I mean, does that answer your question? Or I feel like you're on a soliloquy there. I apologize. No, no, no. I think that's great. And I guess as part of that, you know, there's an argument to be made of kind of the unbundling of media organizations, but there's also an argument to be made that many platforms are simply just re-bundling all over again, right?

It's kind of like you're almost unbundling under the current brands and then just re-bundling under new brands. Like maybe talk a little bit about, you know, do you agree with that? Do you not? I do, actually. i mean i i really i don't know do you know rich greenfields oh yeah from uh was it light street or light street partner street white speed uh and uh like so so you know like i do believe you know like in his theory of the unbundling right and then ironically i also believe that the problem with the unbundling is it comes down to again this this paradox of choice right and

you unbundle, unbundle, unbundle, and then the consumer has infinite choice. And ultimately, the consumer just says, God, I just want it easy, right? And so that's why the rebundling occurs. And I do think that what happens in the unbundling is the crap gets dismissed, right? It gets sort of pushed aside. And I do think that one of the things that's really lovely with the digital evolution is you're going to start to see sort of more efficient things coming together, right? Now the problem is you lose surprise and delight, right? Like, so in a world where there's no data, people made gut decisions, like everyone sort of had some common truths around them and and there was surprise and delight you didn't know what was

on the next channel you didn't know what you were going to read on the next page you didn't know what was going to be put together and like the editor's jobs were to curate like a selection of of ideas for you and some of them landed and some of them you didn't agree with now where everything can be so personalized that you actually get is this custom tailored information that almost puts you in your own little unique filter bubble. And it divides people further from having any sort of common truths. Yeah. And is it a world where, as this happens, the monetization, right? So we think of it as like, there's the incumbent models, which we talked a little bit about. But in these new models, there's completely different

monetization strategies? Or is it a world where there's just only so many, right? I mean, it's basically there's ad supported and there's subscription supported and you're going to do one of those two things and maybe you can sell some physical products right but there's not like you can reinvent the wheel over and over again on monetization so yes and no right um there's a really interesting uh i would say fallacy that happens with transitions most of the time which is as these transitions take place most people think that the old manners in which people consume or pay for content or engage with a brand can be applied to the new technologies, right? So like if you take, you know, the Alexa or, you know, your iPhone when it first came out

or any new device, right, most of the time, the first sort of iterations of brands and engagements on these new platforms were repurposed versions of what people's experiences were on a different platform. Does that make sense? It does. And I think that what happens in that world is that people think that the business models that were applicable in one world are also applicable in another world. And so they think about it through the lens of marketer support or subscriptions. And if you think about what I was saying in the beginning, it does fall in the camp of either episodic or annuity, but it doesn't fall into marketer support or subscriptions. Marketer support and subscriptions are sort of subsets of either episodic, which is what marketer support would be, and subscription would be an annuity. And here's a real example.

Look at television, for instance. right um like the traditional form of television um exists where the network would create the content it puts a huge investment in the content creation and then it sells commercials against that um the economics have gotten so unwieldy that you're seeing it on like linear television today, there's challenges, right? And you see it, you see, you know, the shift to streaming, the streaming wars are on, what's happening here. And that's very real, right? Like, I've never owned a landline since graduating from college. I assume you don't have a landline with Polina in your house, right? You just have two cell phones. And I'm willing to bet that my six-year-old

daughter doesn't have a cable subscription when she graduates from college and gets her first departments. These are generational shifts, right? Where they go. And so the economics of television are going to have to change, right? And if you think about it, like a brand like Time has Time Studios, which is its long form film distribution unit. And historically, Time Studios would create, you know, films for Netflix or Amazon and then sell it to them the way that we did with like a year in space or we would work with magnolia and do something like the john lewis uh good trouble um you know documentary but today we have the ability to create content for the networks take air time from the networks and split ad revenues with the

networks and that's a business model that never existed before where it's like all of a sudden And, you know, I can look at a television network and say, I'm going to take my brand and create content for your network. So I'll fill an hour of your airtime. I've now saved you the content cost creation. And in return, let's split what the ad revenue would be. Let me own the rights so that way I can sell the rights internationally and it can become a great new business.

And what you're going to see, by the way, and when does this go live, this podcast, this afternoon, or does it go live next week? Oh, perfect. So on Monday, so I'm telling this to you now before, but on Monday, we're going to announce that we have the Time 100 this year being broadcast on ABC on the 22nd of September at 10 p.m. following Dancing with the Stars. right now that's a business model that a year ago could not exist but the pandemic opened it up and so i think that what people should always do as they look at any business or as they look at evolving a business is always ask why why can't we do this why are we doing this and if you can't get a rational answer and if your answer is just because that's how we've always done it and that's the issue that most incumbents have, as opposed to startups, you've got to get past the because.

Who cares about because? If you don't have a rational basis, you've got to think about how are you going to tweak it and fix it. Yeah. So I think when people hear that, right, where you're going to take the time 100 and you're going to put it on television, talk through a little bit how you think about a startup or an incumbent who couldn't have that conversation strike a deal like that they would say oh if we want to do something we're just going to stream it on the internet right so that's kind of one option the second is on television and so is it a uh attraction because of the audience size is it an attraction because of the partner they're like why go to television versus digital i think it's a prime example of these situations

so we do a lot of digital distribution and we have a lot of success you know we do the time 100 Talks, which we launched in Q2, not as a virtual event, as a television show. We do it every week. And every week, hundreds of thousands of people actually tune in to watch it. And then ultimately, it gets clipped and it gets millions of views as we put it through our ecosystem. The ability to get quickly into the network world is, I mean, no matter how much it's transitioning today uh it's still gigantic right on every level and still where a lot of eyeballs are today on every level and so there is a prestige to being able to do something of that i think that what a lot of people tend to say when they look at sort of evolution is is um forget forget targeting this

person let's target this audience like this is useless or this was the old let's go to the new and i'm simply saying like you can't discount anything like half of the time 100 this year is going to be digitized right and it's going to be streamed over on site and over twitter and through those feeds and a portion of it is going to be broadcast right and i don't think like a brand like ours should ever say either or like we should play in all the different areas um i learned quickly when i was at wired a really interesting um uh reality of getting talent to speak at events. And I remember we had Chris Saka

at the Wired Business Conference. God, I want to say maybe in 2010. I might be wrong on the year. But he made a comment to us, to Maya Drazen, who's now with me at Time. She's amazing. But he made a comment about, he didn't come and speak to the Wired

business conference for the 400 people that were in the room right like there were great 400 people that we curated he he spoke at the wired business conference for the distribution that the wired brand gave him to the entire ecosystem that was outside of the room and i think that to any small brand like what you want to think about is is like there's one value to speaking to your audience but if you don't have the distribution to push it out there's only so much influence and impact that you can ultimately have. And, you know, like, I do think that there's huge value, you know, we take the time to make the talks. And not only do we stream it on our site, but we stream it live over Twitter, and Facebook and LinkedIn, right, three very big communities for us. So that way,

we are maximizing what that reaches digitally. Speaking of digitally, time is already going you this transition uh you have drastically grown the digital revenue is there a world where it is 100 digital right and kind of you do all the things that you do today just bigger batter there's more revenue channels but the legacy stuff uh kind of just erodes away not because you guys want it to but just that the trends force that to happen i i don't know i mean here i'll Here's what I would say is, as it relates to marketing revenue, time is never going to be anything less than a digital first marketing revenue sort of organization. However, print is still a very large consumer revenue base for us.

And what was interesting and what we found was we had our internal projections as to what we could do as it relates to print revenue and uh in q2 and we grew print revenue six percent against the projections that we had so like in the most challenging quarter we found that there still was a large consumer demand for print and you know what i would say is is this um think about horses for a second i bet you never thought you'd talk about horses on this podcast right but like back prior to trains or cars right like horses were mass transportation right like if you think about did you ever play the oregon trail game like growing up like how'd they get across the country horses right but then trains came around and what

happened to trains uh what happened to the horses when trains came around they became local transportation, right? And then cars came around. And what happened to the horses? They didn't go extinct. They just came relegated to two very specific niche audiences. Gamblers, right? You didn't see that one coming. And the athletes, right? Collectors. And I think that print is going to fall along that same spectrum. Like, I don't think in my lifetime or in your lifetime, print is going to disappear. But I do think that the value proposition that it provides is going to get continuously defined by the audience that it wants. And then all print products are going to have to choose, are you delivering what the expectation is of that audience? And so like in

the case of time, if you look at it, like the value proposition of time is it sort of captures living history in the moment, right? Like the magazine has gotten rid of and shed certain things that historically the um the was uh that the internet is essentially replaced right and it goes to bigger thought leader pieces it goes to bigger sort of contextual pieces the goal of print is to see the ongoing conversation of the internet not to compete with it right and then ultimately like if you look and you'll see very subtle cues with it like we're slowly like we increase the paper stock right make it a slightly better product right like and you you think about it from that perspective and so i think again that the people who think that like oh print is dead

well yes in the marketing sense print is seeing the floor drop very quickly there's still business there right but like uh from the consumer front there's still a very strong consumer business that's existing one of the last things i want to talk about is uh you focus on the business side of time. These legacy organizations have spent literally decades figuring out the right balance between the business side and the editorial side. And in many cases, there are very strict kind of firewalls and all the things that I think people would expect. In the Challenger case, though, for many creators, they are the CEO, they are the head of editorial, they are the operations person, the accountant, everything. Without speaking to the editorial side, I think that's

very case dependent. How would you, if you're in their shoes, think about building a business as a challenger in terms of where are the things to think about? Where are the places to spend time? How do you think about... You don't have a lot of resources, so you've got to jumpstart that. Just talk through a little bit. If you're in that challenger seat, what would you think about? Yeah. So I think that, you know, ultimately I go back to this equation that if you're in the content business, right, like what you are ultimately monetizing from the business end is trust, right? And you don't actually need a divide between edit and business if the business side understands the importance of that sort of mandate, which is if you violate trust, and in this world where there's cancel culture and where anything can sort of, you can make a mistake and it can be

over very quickly um if you violate trust you're dead right and in that sort of equation my advice is is build trust with your audience and if you build trust with your audience and accept advertising revenue as part of your streams then the advertising that comes in to your ecosystem just can't violate that trust it doesn't mean that it has to be bad advertising like as a matter of fact there was uh uh an ad i once did and i'll never forget this at wired for netflix that um was um for one of their series that outperformed every editorial piece on wired for the whole month and it was an ad that we had built together that was a custom content clearly stated advertisement probably 50 different ways. And the reason is, is, is this in, in analog world, um,

edit exists in one bucket and advertising exists in another bucket. When it's digitized, it's only sponsored advertising if it sucks, right? Otherwise it's just content, to the consumer. And so if you're a marketer and you look at some of the marketing messages that some of the most sophisticated marketers do, like take a P&G in the world, they create amazing content. And then through that content, they build trust. And the whole reason that they want to be with a content provider is because that content provider has trust already and their trust plus the marketers trust creates a really good association altogether to ultimately move product. My only advice would be never, ever, ever, ever, ever violate trust. If you don't

believe in the product, don't hop the product. If you think the product is amazing, then stand by the product. Don't weave the product into something unnecessarily, right? Like people could see stuff, like it's a stain on your shirt, right? If you can see the stain, everyone can see the stain. But if you keep in mind the consumer first, and you keep in mind the importance of building trust with the consumer first, that's all, then I would say that that's the basis by which you should move forward. Awesome. I think that is the most important piece of this is it's not the tactical, right? It's the philosophical here is what you have to optimize for. And that can inform a lot of decision making that kind of goes off. Yeah. So wait, before I leave,

I have a question for you. All right, you get it. Well, hold on. I ask the same two questions to everybody and then you get to ask me one at the end. Oh, so you get two, I get one? Is this how you negotiate with Paulina? No, normally it's the opposite.

Usually she gets 12, I get zero. Okay, awesome. Okay, so what are the two questions? I should have prepped for this. No, I have no idea what these questions are going to be. What is the most important book that you've ever read? Innovator's Dilemma. Two books, two books, two best books I ever read. Innovator's Dilemma, as it relates to understanding business models, as it relates to leadership. The single best book

I ever read was A Long Walk to Freedom, which was the autobiography of Nelson Mandela. That's a great suggestion. No one's ever said that on here, actually. Can I give context for why I said that? Of course. I read a book called A Force for Change by John Cotter, who's a Harvard Business School professor. He wrote the book in 1988, and it's The Difference Between Managers and Leaders. It's a really interesting book. Most people don't distinguish between the two. And after I finished it, I wrote him a note, and I said, I loved this book.

I think I was the first person since 1988 that wrote him this note, right? And he wrote me a really nice note back. And I have lunch with him. And I asked him the same question that you just asked me about business books and leadership. And he said to me, I think every business book written today is crap. And I said, why? He goes, nobody researches anymore. They just want to turn it around in like three seconds. Nobody does the hard work. He goes, you want the best book on leadership? Read A Long Walk to Freedom. And I said, why? He goes, when Nelson Mandela was released from prison, everyone thought that South Africa was going to fall apart.

He goes, I got book after book from think tanks throughout the world, from schools, from educational institutes saying that South Africa was going to go into war and famine, and that there was going to be chaos, and that it was the end of South Africa. And you know what happened? I said, what? He goes, none of it. And I look at him and he goes, you know why? And I go, why this great leadership picture this you're in jail for 35 years you get out and now you're in charge of the people who put you in jail and you don't actually take you don't actually go after them i mean it really teaches you about the human psyche and how he evolved and i just think that it's if you're looking for a lesson on leadership it's an amazing amazing book that's a great

explanation. Second question. More fun question. Aliens, believer or non-believer? Total believer. Why? I think that you have to be so selfish and self-centered to believe that the universe is as big as it possibly is and that we're the only possible living entity. Now, i don't believe that aliens are green figures with big eyes or whatever uh but i can't possibly rationally believe that in this entire universe and i don't know if you've gone to the planetarium at the natural history museum but it's pretty big when they when you go into it and you hear neil degrasse tyson talk i can't envision that we're the only living species now whether we're the most advanced i don't know but like i can't envision that we're the only ones

what's your answer for that oh yeah i'm with you it's just it's too big the the three key pieces and i've got the advantage of i've asked hundreds of people this question and thought about it way too much it's just one uh are we more advanced or less advanced two um do we want to discover them or do are we cool with them discovering us right kind of the the conqueror uh or the explorer usually ends up being the more successful at least in human history um and then the third is just from a timescale standpoint? So there might be other life, but is it, you know, a million years before or after you and I are sitting here talking? So, so I have a great meme and I'll send it to you after this. And it's a bunch of aliens talking and it says year 2020 and the

aliens go, fuck, we're up next. That's awesome. I, uh, speaking of memes, I don't know if you saw this i think it was uh even the new york times i can't remember but somebody interviewed uh elon musk and uh the whole interview is you know very serious right and kind of everything from tell us your vision for the you know future to defend yourself the whole nine yards and at some point they ask him uh when your twitter account was hacked uh there was a rumor that potentially they took the dms of a couple of accounts were you worried and he said no not really like i'm sure you could like take something out of context and you know make me look bad or something but for the most part it's just me swapping memes with people yeah right so it's like okay and then like

one of the follow-up questions was if given the choice of being a billionaire or a meme lord which would you choose and so of course the billionaire says a meme lord right but but it's just like in what world do they have elon musk and that was one of the serious questions right and of course he's like eyes light up i'm sure and he's like a meme lord what else would you want to be so so so my question for you would be this you know as we evolve time um like we've really been rethinking a lot of different areas and you know you know this about me because and i've said this to you like i believe in this crypto trend like i think it's very real um uh historically the only way in which you could get subscriptions to time or or whatnot

would be um uh through you know your credit card or cash or check and you know we've slowly evolved into different digital payment methods through apple pay obviously and others but if you were to give me advice on how to implement a crypto option on subscribing to some aspect of time, where should I start and how should I think about this? So I will not say company name because you and I will both get eviscerated online, no matter which name I say. We're talking trend wise. I think there's three things. One is, if you stay within the traditional confines that you have had in terms of people are just paying for a holistic subscription, whatever that entails, there's just the simple pay with Bitcoin. right so there are a whole bunch of uh bitcoin payment processors that uh that can facilitate

that and each one's got you know pros and cons to it um and that's really people who i think are uh in crypto like bitcoin already have it they just want to use that as their preferred payment method um i actually don't know how popular of a payment method that would be right because most of the people i think in bitcoin want to hold on to the bitcoin rather than spend it um but that's one option. The second is there are a couple of payment processors now that what they do is one that we've invested in even that says, hey, I'm going to take my dollars and I'm going to pay Keith dollars. But the transaction is actually processed through the Bitcoin Lightning Network. So you get dollars, I sent you dollars, but in between the sender and receiver, it is converted

to bitcoin sent across the lightning network and then converted back to dollars and sent to you and the advantage is one you can do it globally you can do it much faster um there's uh kind of a complete removal of all of the credit card transaction fees um and then there's no charge backs right so you kind of from a merchant standpoint it's very attractive um and then you just get dollars you don't have to worry about kind of the the bitcoin component of it so i think that's more realistic in the sense of people they just want to spend dollars right And so they don't have to understand the underlying infrastructure. And the last one is I do think that there are or will be a very big rise in kind of these digitized currencies.

So the digital dollar, the digital yen, euro, R&B, whatever. So it's the technology, but it's not a change in kind of monetary policy. So what's the difference between a U.S. dollar in today's form versus a digital dollar? it's just the technology right and so yes there's advantages to that right whether it's cost or efficiency or whatever um but but really you're just moving dollars around in a new uh kind of frontier right love it thank you so so the next time we chat my hope is is that this is the topic you're like how did it go how did this implementation go and and i will and i will credit you and i thank you for that thank you for for having me on this today i hope i was

remotely interesting to anyone that was listening. Well, now that people know that you are paying attention to your Twitter account, when this comes out, my guess is that you're going to have a bunch of people tweeting at you, either one, recommendations for time, or two, I'm sure there's a couple of smart-ass challengers that will explain why they're the next time, hoping that you pay attention. No, listen, any suggestions are much, much appreciated to your audience. And thank you for for the kind words uh yesterday i saw so many that brought my ego up so high that when i read all the nasty ones brought it right back down to where it was before you even tweeted it out so

all right keith thank you so much for uh for doing this i'll do it again in the future anytime have a great one