← Channels with Peter Kafka
Channels with Peter Kafka
Condé Nast CEO Roger Lynch on AI, the Met Gala and His Secret Succession Plan
00:53:34
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- [00:01]
Roger Lynch
If you're tired of endless scrolling to
- [00:03]
Peter Kafka
figure out where to eat, same I'm Stephanie Wu, editor in chief of Eater. We've just launched the newish and way better Eater app.
- [00:12]
Roger Lynch
It has all the restaurants we love, gives you personalized picks wherever you are, and serves up smarter search results just for you. You can find my list of the best places for martinis and fries in New York City, and save your favorite spots, share lists, follow editors and book right in the app. Download the eater app@eaterapp. It's free for iOS users. Should the US start bringing troops home from Europe? I worry a lot that this is where we were headed. Trump sort of signaled it a lot during his first term. And in my conversations with European friends, I have been telling them, be ready for this, because I do not think we get through four years without the United States reducing its European footprint. I'm Jake Sullivan. And I'm John Finer, and we're the hosts of the Long Game, a weekly national security podcast. This week we debate whether the US should draw down its true presence in Europe, and we break down the latest developments in the Iran war. The episode's out now. Search for and follow the Long Game wherever you get your podcasts.
- [01:15]
Peter Kafka
Does anyone really know what goes on behind closed doors at the Supreme Court? Four years ago I got a tip
- [01:20]
Roger Lynch
about the court, and I was not
- [01:22]
Peter Kafka
in the market to cover it whatsoever. But this tip was about a secret influence campaign that had been carried out inside the court.
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Roger Lynch
As you know, the very idea of that is outrageous.
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Peter Kafka
I'm Preet Bharara, and this week New York Times investigative journalist Jodi Cantor joins me to discuss her expose on the Court's shadow docket. The episode is out now. Search and follow Stay tuned with Preet wherever you get your podcasts. From the Vox Media Podcast network, this is Channels with Peter Kafka. That is me. I'm also chief correspondent at Business Insider, and today we are talking about running the last remaining magazine empire with Conde Nast CEO Roger Lynch. Except I just looked at the transcript of this chat and lynch only used the word magazine once. These days he thinks of Conde, which for decades was the world's most prestigious magazine publisher. Probably still is as a portfolio brands that shows up all kinds of places on the web, obviously on TikTok and at movie theaters and at the mega glamorous Met Ball. So in this conversation we skipped the question I normally ask magazine People, which is something like hey, what the hell was a magazine in 2026 anyways? And we move on to other topics, like what's it like to be the subject of one of the most popular movies in the world? What's it like to run a media business when Google stops sending you traffic? And who's going to replace Anna Wintour and David Remnick, Perhaps the two most influential editors in the. And where is that shortlist? Spoiler. Lynch does not tell me what the list is, but you're going to like this interview anyway. Here's me talking to Conde Nast's Roger Lynch. Roger lynch, welcome to Channels.
- [03:14]
Roger Lynch
Thank you. Peter, good to see you.
- [03:16]
Peter Kafka
You are talking to me from la. Very show busy of you. Speaking of showbiz, you guys just finished the Met Gala. I think it's an enormously successful project for you.
- [03:27]
Roger Lynch
It is, yes.
- [03:29]
Peter Kafka
It's showbiz, it is commerce, it's philanthropy, it's a ton of celebrity, some controversy. It also seems like the most obvious expression of Conde Nast as a company today. Is that a fair summation?
- [03:46]
Roger Lynch
I think it's right. And I think it also showcases what we do best, which is create cultural moments. So events has been a strategy for us, as it is for many media companies. But for us, our events are really around creating cultural moments that really break through the Zeitgeist search algorithms or whatever's happening in the headwinds of the media industry. Nothing holds back big cultural moments like the Met Gala.
- [04:16]
Peter Kafka
How do you measure success for a big cultural moment? At some point you're a business, so you're trying to make money from it. You're also raising money for the Met, but it's a big dollars and cents event for you as well. Is that the most important thing is the reception it gets online? Most important, how do you measure it?
- [04:34]
Roger Lynch
Look, that event in particular, it's different for each event. For that event in particular, it starts with the Met. Right. That is a fundraiser. And this year was immensely successful for the Costume Institute and the Met, and also the inauguration of the Kandi Amnes Galleries that we did the ribbon cutting for the morning of the Met Gala. From an audience standpoint, every year it surpasses our goals. And we finish the Met and we go, how could we ever do anything like that? And then it grows another 50 or 60% the following year. So last year, I don't know, we had a little over 2 billion total video views of the content we produce around the Met. This year it was 3.1 billion, another 50 something percent increase year over year.
- [05:23]
Peter Kafka
Does that tell you you're getting better at making the content or Is this audience getting bigger for this stuff?
- [05:31]
Roger Lynch
I think in the earlier years, for me, when I joined, I think we had a lot of room to improve in the content that we created around the event itself. The event itself was spectacular, but how Conde Nast covered it and created content around it, there was opportunity for improvement on that. And I think we have done. I think the team has done a fantastic job really increasing the quality and the creativity of the output around it. I think then what compounds on that is that the intrigue around this event just seems to grow every year. And yes, you mentioned this year there's some controversy. That's fine. That's actually good.
- [06:12]
Peter Kafka
Let's spell out the controversy. It's Jeff Bezos and his wife, Lauren Sanchez, were sponsors and curators of the event. This event's always been tied to extreme wealth. You've always had benefactors working with you on this project. Were you surprised at the blowback controversy you got from the Bezos involvement?
- [06:30]
Roger Lynch
Well, I mean, to be clear, their involvement was in support of the Met, the museum, and the Custom Institute. And the money that they gave went to the museum. So, look, I think there's a lot of reasons you can criticize extreme wealth and people will criticize, but to actually criticize them for donating money to a cultural institution, to me, was a bit off base.
- [06:53]
Peter Kafka
But were you surprised when you. Because this is going to be a regular feature going forward, as long as you're working on this, you're going to have people like the Bezos who want to be involved, and they're going to pony up a lot of money. Will that give you any pause, like, oh, do I want to deal with this? Or are you okay saying, yeah, these things come with attendant controversy? And that's okay.
- [07:12]
Roger Lynch
That's okay.
- [07:14]
Peter Kafka
Well put. Let's zoom out a little bit and just talk about Conde as a business. You came in in 2019 as a privately held magazine publisher. In 2019, the future for privately held magazine companies didn't look great. What's the best way to sum up what you have done during your tenure there?
- [07:36]
Roger Lynch
Well, I had the distinct advantage of not knowing anything about the business and not having grown up in the publishing industry. So it enabled me to come in and, and, and question everything. And the first thing I questioned was how we were structured. We were structured first as two separate companies. There was an international business with its own CEO and a US business. They really acted like competitors in every way possible, including the editors competing with each other. There was so much internal competition. We had no time to focus on external. Even every country around the world where we operate, we're a very global company operated completely independently from each other. And you know what? That, I think was probably a good strategy for many, many decades. It made Conde Nast into a very large, successful global publisher.
- [08:27]
Peter Kafka
A series of fiefdoms. And then people were proud of the fiefdom nature.
- [08:30]
Roger Lynch
They were. They were very, very protective. But what I came in and looked at it, it's like, okay, I can understand why in a print magazine business, why that was a successful strategy, but the world has changed. The opportunity for us going forward is really about connecting with audiences in new and different way. Technology, certainly, and also audiences have changed, maybe in part because of technology. But if you just look at how cosmopolitan people have become in terms of their content consumption, when some of the most popular shows you may watch come out of Sweden or Korea, Israel, wherever. And when I first joined, I started looking at the data about where our visitors were coming from each of our websites. And there was something that really struck me, which is, wherever you went around the world and you looked at the data of our websites, about 40% of the traffic was coming from outside of that country. So my first listening tour, three or four weeks into joining Conde Nast, I'm meeting with editors around the world. And I heard sort of a similar story, which is, oh, audiences in Italy only care about Italian culture and content. They don't care about what happened or same as France. And I'd always ask, well, then explain this. Why does 40% of the traffic to the sites here come from outside of the country? And the reverse is true, which is we have a huge audience from France or Italy going to our sites elsewhere around the country. It's because they are interested in it. We're just not organized in a way to present the content to them the way they want to consume it.
- [10:10]
Peter Kafka
And by the way, some of your employees still tell me that this culture, the former culture, is important. And by globalizing things and sort of consolidating brands globally and having shared resources for some of these companies, that you're missing out on what makes a particular title unique and how they do speak to their core audience and whatever, whether it's geographic or demographic, and that mushing this stuff together has been a detriment, even though you're going to say it's successful.
- [10:43]
Roger Lynch
Well, the first thing I would say is I'll never be someone who just admits that everything we've done is perfect and is right. I think you can always learn and what I told our teams when we made all the editorial changes now, four or five years ago, the first thing I told them was assume we got it wrong. Go figure out where we got it wrong and let's make adjustments. But don't assume we got everything right. And wait till, you know, we learn a lesson a year from now. Figure it out now. Figure out what we got wrong, what adjustments we need to make. And they'll always be that we'll always be making adjustments to try to figure it out. And some of those adjustments, you know, it's different brand by brand. If you take a brand like Wired, you know, technology is more global. You know, the interests, the factors that influence our lives through technology is more global in nature. Something like Vogue, there's an element of global fashion, but then local markets, whether it's Japan, China, India, very strong local culture and local fashion. So there's not a one size fits all for any of our brands. You have to, you have to adjust your assumptions based on that brand and the local markets. So I do feel like we have largely got it right. And, you know, the results have been, you know, we take our largest brand, Vogue. It has grown every year that I've been at the company, and its profitability continues to grow, its reach grows, and it's more successful than it's ever been under my tenure. So.
- [12:09]
Peter Kafka
So overall, the, the business is profitable, which wasn't always the case. Increasing profitability, revenue is basically where it was in 20. If you were a public company, people would be very upset with you. But you're not a public company. You're owned by the Newhouse family. Is flat revenue and increasing profitability. Is that what they want out of this company?
- [12:32]
Roger Lynch
Well, I think if you look at what we have, revenue streams that have declined structurally and revenue that has grown and coming in to the company, I came into print advertising, print subscription, newsstand revenues that was just going to decline. We knew that. And that was by far the majority of the revenue when I joined. The real trick wasn't to change the trajectory of that, because that wasn't going to change. It was to develop new revenue streams at a fast rate so that you can offset the decline that was going to happen in the legacy business. And we've done that. And so if you look at our big growth areas, certainly digital subscriptions that grew 29% last year, I think there are not many companies that wouldn't be thrilled to have 29% growth in digital subscription revenue or events. We started the conversation today about events. Our Event strategy has really paid off. And every year these big Ten poll events grow more than we expect. So if you look at last year, our big tent pole events last year grew about 50% revenue year on year. Huge. And these are not small revenue activities for us this year. Our events so far are up 60% over last year, which was up 50% over the year before. So those strategies around leaning into digital subscriptions or our commerce business or our events business has really paid dividends to us.
- [14:09]
Peter Kafka
But I guess what I'm asking is, are your owners okay, if you come back to them and say at the end of this year, say, listen, our revenue didn't increase much or we're still where we were in 2021. I've, we had some declining businesses. I've replaced them with growing businesses and you, the Newhouse family, you get to enjoy x percent more profits. Is that a win for them and for you?
- [14:29]
Roger Lynch
Well, let's be clear. Our revenue is growing. Our revenue grew last year and our revenue already this year is growing again. So we do have growing revenue.
- [14:36]
Peter Kafka
Okay, so it's, it's, it. Do you think you are going to, if we, if we look at the chart right and you're, you're still sort of where you were in 2020, you went down from 2021 and now back up to 2021 rates. I guess I'm saying is, is the expectation that you're going to surpass where you were at 2021 at some point or is this sort of the level you're going to be at?
- [14:54]
Roger Lynch
Oh, no, we're definitely surpassing. Yeah, our business is going to continue to grow.
- [14:58]
Peter Kafka
You think it is reasonable to, to grow revenue and profit?
- [15:01]
Roger Lynch
Definitely. Because the, the, you know, the trajectory that we had to overcome was again, the majority of the revenue of the company when I joined being print advertising and print subscription newsstands as the declining business. It's a small minority of our revenue today because all of these other revenue areas have been growing and they grow every year. And so now they've surpassed the decline in the traditional business and they're only going to continue to grow. So our revenue will continue to grow because these new streams like digital subscriptions and commerce and events and all of that are growing at double digit rates.
- [15:38]
Peter Kafka
And if we go back to 2019, does this look like the company you imagined you were taking over and were going to transform? Is this where you thought you'd end up?
- [15:47]
Roger Lynch
You know, I knew that we had some big challenges and frankly, that's what attracted me to This I like really big challenges. I like transformation. I like connecting the dots and strategies and then going executing against it. The thing I knew is that there was going to be a big, messy transformation just in terms of the structure of the company, and that those changes were going to be cultural as much as they were organizational, and that we were going to need to do a lot of innovation around creating new businesses and revenue streams. But what gave me hope that we had that opportunity was the strength of our brands. And so the number one thing for me when I was considering whether to take this job was to try to understand were our brands becoming more connected with audiences or less. I asked for a lot of data on that. I wanted to see principally around digital platforms. What I really quickly realized is they're definitely becoming more connected with audiences. We're growing audiences, and therefore, okay, what we have is really a business model problem that is very solvable.
- [16:59]
Peter Kafka
It is because the traditional line, as you know, for. For every company going through analog to digital, is you're trading your. Your analog dollars for digital dimes, pennies, whatever it is. And so it's a business problem that has really bedeviled just about every media company.
- [17:17]
Roger Lynch
That's true. But, Peter, when I joined, it's been widely reported that the company was losing money and not a small amount of money. And today we're profitable.
- [17:25]
Peter Kafka
Yeah.
- [17:26]
Roger Lynch
And when I joined, we were majority print revenue, and today we're major.
- [17:31]
Peter Kafka
Right. What I'm saying is when you said, this is a solvable business problem, now you can point back and say, yeah, we solved it. But in 2019, you had that same level of confidence that we're going to figure this out where most people have not.
- [17:42]
Roger Lynch
Yes. Yeah, I did. I knew it would be tough, but I knew we'd figure it out.
- [17:46]
Peter Kafka
Yeah, I mean, most of. I mean, your peers don't really exist anymore. It used to be Conde Nast and Time Inc. And Time Inc. Doesn't exist. It's been chopped up and renamed a bunch of places. A lot of the most, I think, of all the digital brands that we're going to challenge, the Conde Nast, the world. I just wrote about Basic. Basically the end of buzzfeed yesterday. Vice has gone bankrupt. Vox Media, who makes this podcast, is splitting itself up as we talk. So I guess what I'm saying is you did a good job. If you can sit here and say, yeah, we have grown revenue and we've grown profitability while other folks have been falling down. Not really a question. I guess that's a compliment.
- [18:23]
Roger Lynch
I'll just say thank you.
- [18:24]
Peter Kafka
You're welcome. We'll be right back with Conde Nast's Roger Lynch. But first, a word from a sponsor.
- [18:33]
Roger Lynch
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- [20:22]
Peter Kafka
And we're back. You mentioned cultural stuff inside the company. I was going back and listening to our 2021 conversation in the Pandemic sort of post George Floyd reckoning. And this was a period where a lot of companies, in particular media companies, found their staff very upset with management. And you guys had had to let go of a Teen Vogue editor that you'd hire because the staff didn't want to work with her because of her bad tweets. When you look back at that time, the sort of pandemic 202022 era, do you feel like at any point you sort of overcorrected to accommodate staff? It seems. It seems now that the cultural pendulum has swung a lot And a lot of the stuff that people were complaining about in 2020, 2021 aren't things they would at least voice publicly now. And I'm wondering if you look back in that era and go, maybe I overdid it.
- [21:17]
Roger Lynch
Well, it really hit us in 2020, and it started right around the time when George Floyd was murdered. And I knew when I joined that we had a lot of cultural issues to deal with. And one of the first things that I did, again, because we had all these separate businesses around the world, there was no one company. There's no one even executive team. I wanted to try to find some things that I could get this newly what was about to be combined company focused on some global initiatives. And it can't be like we're going to be profitable. That's not inspiring. But what I found talking to our employees was they were really interested in a couple areas. One, what are we doing on diversity? And two, what about sustainability? So I thought, great, these are really two really important issues for us to work on. And what we can do is even in advance of changing all the org structures or how we do our editorial, I can create teams from around the world of employees who are really vested in this to help advise the company and help drive forward progress in these areas. So that work resulted in a diversity report and goals that we set in 2020. And so we were, by the time this hit us, we were already had a lot of work underway, but it was work that we needed because I think the company was not showing up well in these areas. And so do I think we overcorrected? No, I don't think we overcorrected. I think we had a lot of room for improvement. And I think we seized the moment today when you see so many companies abandoning these efforts, we just last month published our diversity report again and we showed the progress that we make. As I stood up in front of our company last month at our company meeting, I said, look, this is a core value of the company. It's discouraging to see all these other companies dropping these initiatives. But that only says one thing, that it never was a core value. It was a convenience for us. It's a core value and it is a source of competitive advantage for us.
- [23:33]
Peter Kafka
Now I'll talk to people who run media companies who said they were interested in diversity and now literally can't say that out loud because the FCC might come after them or they might get some other kind of blowback in the Trump 2.0 era, and they'll Say, this is as important to me as it ever was. I just need to phrase it differently. I just can't come out and say, literally can't say diversity. I can't say any part of diversity, equity, and inclusion. Do you have sympathy for the folks who are running media companies who think they're doing the right thing, but can't say that out loud?
- [24:07]
Roger Lynch
Look, I think there's a couple categories of companies that have backed away from the commitments they made. One is companies that are under threat from our own federal government and the fcc. I certainly have sympathy for the threats that they face. I wish more of them were willing to stand up, because I do believe that the fears that they have are overblown in terms of what the government can really do. There are other companies that just abandoned them because the winds changed. I have no sympathy for them. None whatsoever.
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Peter Kafka
Do you feel like you can make that assessment from the outside go, oh, these people never believed that. They were just saying it, and these people do mean it?
- [24:50]
Roger Lynch
Well, I think that companies that aren't under the type of political pressure that you mentioned earlier, who abandoned these. It just says one thing. It was never really a core value. It was a response to a moment. And one of the things I'm most proud of with our company is that we've retained it as a core value. And we report on our progress every year, and every year we make progress, and we have publicly stated goals, and we track ourselves to those goals. And I think our employees really appreciate it. And as I said, with fewer and fewer companies doing that, it puts us in a position of, I think, great competitive advantage.
- [25:28]
Peter Kafka
Yeah. I wanted to ask you about this. You've brought up this idea that you guys have not been buffeted by the second Trump administration like other media companies. And you said, look, we don't have a Warner Brothers deal to get through the fcc. We don't have this issue. We don't have that issue. Certainly there's an audience of people that I work with who like hearing that. But I'm wondering why you make a point of bringing that up in public. You've talked about it in a couple different settings. What is the point of you saying that out loud? Who is the audience for that?
- [26:00]
Roger Lynch
The audience is our own employees and our future employees. We have a talent, brand that is very important to us. And I think if you're a journalist today, I always tell our employees, our journalists, that right now there's fewer and fewer places where you can practice your best work without being either impacted directly by the government or by the ownership group or whatever. This is one of them that is a source of competitive advantage. In the seven years I've been at the company, not once has our owners have our owners or our board come to me and said, hey, don't publish this, don't publish that. And therefore, not once have I done that to our editors, because we have the best editors in the world. And the way to keep the best editors in the world is to stay out of their way and support them. And I really believe that that is the key to our success. And I'm fortunate that we're owned by a family that believes in that, too. And so I talk about it publicly because I want people to know, especially journalists who are maybe at places where they don't feel that they have that freedom, that should there be an opportunity to work at Conde Nast, they'd be welcomed here and they would not be interfered with.
- [27:19]
Peter Kafka
Thank you for that. I really was curious about that, and it leads me to this. And we talked about this a couple times before, but now it's a bigger deal than ever. Half of my show is spent interviewing people like you who run media companies, and the other half is spent talking to. We'll just call them creatives. Increasingly, they are people who've left big media companies and created their own business. At the time, it was the last few times we talked about this, it was mostly theoretical, and now it's a real thing, and it's happening in a lot of places. And I'm wondering how you think about two different versions of this one. How do you work with someone like an Emily Sundberg who's been on this show, who has her own center of gravity, but she's very adjacent to a lot of what you guys are doing and very interested in that world. What do you do for either Emily or someone like her to say, hey, you're off on your own and you're successful, but we think you can work with us. What is that pitch like? And the second part of that question is, if you have an Emily Sundberg at Vogue before she becomes Emily Sunberg, how do you keep her there? How do you keep her at Vanity Fair?
- [28:28]
Roger Lynch
Yeah, look, I think that these new outlets for creatives or journalists are very good. I mean, this is an industry that's been under pressure. There are fewer jobs in it than there were five years ago. That trend you've seen year after year. And so new outlets and new ways for journalists or creatives to be able to develop businesses that can sustain them are only good for us. It does make us think differently about how we operate and how we work with journalists and creatives. We have to be more creative. We have to say, okay, there may be somebody who's got a substack who is in an adjacent field that we can work with in some areas, and they'll have their sub stack. And it's not necessarily competitive what we do, but it's not, you know, it's not part of our business, and that's okay. And so I think you'll probably see us do more of that rather than less of that.
- [29:27]
Peter Kafka
What does work with them look like is that you can freelance for us.
- [29:32]
Roger Lynch
Could be. Or they could be writing a column for us as an example.
- [29:36]
Peter Kafka
And what. And what is the upside for. I'll just keep saying Emily Sundberg, but she's a generic stand in here at this point. For them who. Who are produce their own content, get paid well for it, and are profiled in the New York Times. What is Conde Nast giving them by saying, you can now publish in our outlet too?
- [29:56]
Roger Lynch
Well, look, I think for them, for most of them, they may have a substance. Let's take someone like Lachlan Cartwright at Vanity Fair. He has Breaker, which is his own,
- [30:07]
Peter Kafka
and he's been on the show, a publication.
- [30:09]
Roger Lynch
Yeah. And it's great. And he does that, but it's a limited audience that he'll reach on his own, as also working with us at Conde Nasser at Vanity Fair gives him access to a much broader reach audience than he would be able to develop just on his own. So to me, it's a pretty good model to have where you can have somebody as talented as he is and connected as he is building his own business, but all at the same time collaborating with us in a way that works for both parties.
- [30:39]
Peter Kafka
What about the retention idea? Let's say you've got a Lachlan Cartwright on Vanity Fair. And he goes, oh, wait, I could be making 3x what I make if I go off and do my own substack and podcast, et cetera. How do you convince them to stick around? Or do you say go off and do your own thing, but we're going to make some arrangement with you?
- [30:57]
Roger Lynch
Look, we haven't had a lot of that happen, but I think that the unfortunate case with substack is there aren't that many that really can make a good living doing it. And I think those that do find that also it is hard work. You are constantly having to produce, you are constantly having to think about how you grow your business. And for some people that's exhilarating and can be very successful and some it's exhausting. And so I think there's a limit as to how many people will be able to do that in a way that really supports their lifestyle.
- [31:39]
Peter Kafka
Yeah, there's many more than I thought there were going to be five, six years ago. But it's still a limited universe.
- [31:46]
Roger Lynch
I think it is. But again, it doesn't mean there's not an opportunity for them to do that and to work with us in certain ways.
- [31:52]
Peter Kafka
We'll be right back. But first, a word from a sponsor.
- [31:57]
Roger Lynch
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- [33:03]
Peter Kafka
And we're back. Talk me through how you're thinking about platforms these days. In the old days I would say, what do you think about Facebook? What do you think about Apple News? I'm still curious about that, but I want to hear you talk about Google and the AI companies. It looks like you are what you tell me, because it kind of seems like you're washing your hands at Google, but I'm not sure if that's the case. And you're definitely doing deals with the AI companies. And it seems like in all these cases the platforms have something to offer you and there's a lot of risk of being dependent on the platforms.
- [33:35]
Roger Lynch
The first thing is start with our Audiences. And I've always been a believer in, you have to observe what your audience or your customers are doing and. And try to craft your business model around that. And audiences are on these platforms. And so it's very important for our brands to be where our audiences expect them to be. I think TikTok was a great example of that. When TikTok launched in the US we saw a growth of Vogue on TikTok, but not by us. Yes, people were producing content under the Vogue name, putting it on TikTok. That was a really strong indication that audiences expected Vogue to be on there. And so we jumped in a big way. There was no revenue. There was no revenue model that we had for this. But it was important, I felt, for us to be there because our audiences expected us to be there. And we'd figure out that's been the history of the Internet. It starts with engagement and then monetization figures itself out later. And that's what's happened with us in TikTok, because now we have ways to sell ads around our content, and it's become a good business for us. So it starts with where do our audiences expect our brands to be? Okay, let's make sure we're there. Now, your specific questions around AI well,
- [34:50]
Peter Kafka
wait before we get to AI though. Right. Because it's one thing to say I want to be on TikTok, or in the old days, it's important for me to be on Facebook or pick your place. And that makes sense. There's a difference between that and saying, I'm going to do a commercial deal where either I'm going to make stuff for the platform and they're going to reward me with traffic, or we don't have a commercial deal. But also they're using all my content and not sending me any traffic. I'm wondering how you think, think through all that, because you do have to be there, but you can also end up just sort of building a business for someone else and getting very little on the way back.
- [35:23]
Roger Lynch
Always a risk. So, as I mentioned, starts with the audience. In terms of these platforms. I don't believe that any of these platforms owe us an obligation to send us traffic or customers or audience. I also don't believe that they have the right to use our content to come and compete directly with us. So if Google wants to change its search algorithms and stop sending traffic to publishers, as we've all seen, the amount of traffic that comes to publishers from search has declined precipitously. That's fine. They can have their Business reasons around it doesn't give them the right to use our content to then come and compete with us for those audiences. That's the rub there. And so for AI, the risk is these AI companies use the content that our journalists create and use it to compete with our core business model. Now if they want to negotiate with us and enter into license agreements like OpenAI has done, or Amazon or Microsoft or Perplexity, fine, then we can come to terms on how that will work. Those that don't do that or worse, and frankly in the case of Google, they tie their scraping of AI content to their search scraping. So Google's been found to be dominant in search. They don't let you opt out of scraping your content for AI unless you opt out for search, which is very difficult for a publisher to do. I think that's anti competitive. I think it's wrong that they do that. But look, these companies are also our partners. So we can have disagreements in some area of our business and strong alignment in other areas. Again with Google, we're one of the largest publishers on YouTube. We have a very, very good, strong relationship with YouTube and it's really core to our business and really important for them too.
- [37:23]
Peter Kafka
And you've said Google Search is basically going to go to zero or something close to that for you or basically stop showing up as referral traffic sooner than later because of the AI summaries they're doing. Google Discover is this hugely important product for publishers that I think most regular people don't know about that isn't often as big a deal or bigger than Google Search. Are you still working to get your stuff showing up on Google Discovery?
- [37:53]
Roger Lynch
We do get traffic from Google Discover but it is very different traffic than search. Search is intent driven traffic. Google Discover traffic doesn't convert for subscription, doesn't convert for commerce. You may be able to sell a few ads around it, but it is far less important.
- [38:10]
Peter Kafka
Spell out why it's less important.
- [38:12]
Roger Lynch
Because if somebody goes to Google and types, you know, Vogue shopping recommendations, there is real clear intent with what they're looking for. If they're going to Google to search for something and they see an article promoted that catches their eye and they click on it, it's much less committed. It's great. We love to get traffic from Google Discover but that person is much less likely to become a Vogue subscriber or New Yorker subscriber or even transact in commerce than someone who shows much more intent through search. So it is not a replacement. Even though we've seen Discover traffic grow as search traffic has declined. That's a bad trade off.
- [38:57]
Peter Kafka
When we get off this call, I'm going to slack some people I work for. And I'm going to say, here's what Roger lynch, the CEO of Conde Nast, says about Google Discover Traffic. I'll let you know how.
- [39:05]
Roger Lynch
I bet you Jim Bankoff agrees 100% with me.
- [39:08]
Peter Kafka
Jim's one of the people I work for, at least as of today. We're recording this on Tuesday, May 12th. Did you take a look at the Vox Media podcast network which is recording this podcast? It's an asset that is probably going to trade hands very soon.
- [39:22]
Roger Lynch
Yeah, I'm not going to comment on that, Peter.
- [39:24]
Peter Kafka
Fair enough. I'll take that as a maybe with the AI deals. Given that you've now gone multiple rounds with different platforms and you've seen all the promise and peril and pitfall, what is most important to get out of the AI companies? Is it straight cash, like you're going to use our stuff, Stuff, pay us, or it sounds like the referrals aren't really a thing that most people are not clicking through those footnotes and AI results. What is the best case scenario for you in these AI deals?
- [39:54]
Roger Lynch
First and foremost, it is to have a license arrangement which reflects the fact that this is copyrighted content.
- [40:02]
Peter Kafka
You're using our stuff. Pay us?
- [40:03]
Roger Lynch
Yeah, not just pay us, but agree to terms on how you're going to use it. Just like when I was in the music industry or we did film television. These license deals, you could think about two main components. There's the money, but there's also the use, the grant of rights. How can you use it? And most importantly, how can you not use it? So as an example, we would never do a deal with an AI company that says take all of our New Yorker content and just show it verbatim to your customers. That wouldn't be in our interest. We would have put conditions around it. So these terms of the license deals are just as important as the money that's generated from them. We don't think that they will refer traffic anywhere near the rate at which Search did. But there's an interesting dynamic that we see you mentioned the that I said search is going to go away. We chased it for a number of years and each year we do our budget and we'd say search is going to decline just because we don't know why, but we know there'll be some algorithm change that'll cause it to decline. And each of the last three Years or so, we underestimated the decline. And so last year we said, we're going to take a different approach. I told all of our teams, you need to plan your businesses around there being no search, and if you don't have a plan for that, you may not have a business. And we took that approach. And I think it was very effective because it caused people to really think about how do we generate audiences that have strong intent and strong engagement. Now, as search decline, we saw our direct audiences grow. I think it was in part the work that we were doing, but I think it was also in part because people like, if you think about the example I gave you, I said Vogue shopping recommendations or something like that, you type that in a search algorithm, if what you get in return is an AI summary or a bunch of Google links to Walmart or whoever the deal is, that's not a satisfactory outcome. You might just type in to a search bar, vogue.com and then find it that way. So we've been seeing direct traffic grow dramatically where it's the majority source of our traffic now. And I think it is, you know, our teams would like to say, oh, it's because we've done such a great job, you know, And I think that is largely true. But I think it is also because people are finding less relevant search results than they used to. And so where they used to use Google in some ways as a navigation tool, they're finding that navigation, it's very effective. The AI summaries for answering really simple questions, but less so for things that involve taste. And this is one of the big things that I've seen in the discussions that we've had with AI companies. Three or four years ago, when we started negotiating with them, it was a bit surreal because we literally, one company in particular told us, okay, we need to know how many words you have. It's like, okay, do the words matter? Or just any words? Can you tell us how many words you have? Because we pay by the word. We're like, okay, this is going to be a long discussion. But we got through it, negotiated these deals, and then as these services, answer engines started to become used more and more, these companies started to realize that our content was being used in their answers much more significantly. So they started coming back to us like, oh, okay, we see your content really matters in certain areas. And now there's a whole debate about whether AI has taste or could ever replicate taste. Perfect, right? Because that is our core business, creativity, taste. And I think that creates much more opportunities for US now and how we can work with AI companies.
- [44:01]
Peter Kafka
What about the worry that even though you're getting paid today, even though you have restrictions and limits around how you can use your work, that inevitably what you're doing is building up these platforms, making them more and more useful. And certainly one of the products they might come out with one day is not their own version of Vogue, but just things that deliver enough information to people and it's tailored the way they want that they really don't have any need to go somewhere else most of the time. And you're essentially building a thing that will put you out of business, which is a recurring issue with all the platforms. But it seems more likely than ever with AI.
- [44:39]
Roger Lynch
I think it is more likely than ever with AI for brands that don't have the authority that our top brands have? I don't worry about AI putting Vogue or the New Yorker out of business. It just will never replicate what those brands and what the editorial teams can do with those. If you have, and you mentioned some of the companies that are sort of gone by the wayside. Look, I think they were the darlings of these platforms when they were sending them all the traffic. And they did a really effective job of arbitrage and taking intent driven searches or video or whatever and turning it into commerce transactions or ads or things like that. But they were entirely reliant on, yes, that traffic continuing. And when that traffic went away, what they didn't have was brands that had the level of authority that frankly, our brands have.
- [45:40]
Peter Kafka
And so this is what every publisher tells me is how they're going to survive. This is our brands are meaningful. People have relationships with our brand. We're going to create even more direct relationships with our brand. People will come to us because our thing is special. Let's stipulate that. You said, I think seven of your brands make 85% of your revenue. So seven of your brands all fit in that category. How many other publishers do you think are going to make it through this era? How many publishers do you think realistically have brands that resonate with enough people that they can stay afloat on their own without being disaggregated by AI?
- [46:16]
Roger Lynch
Well, first of all, I would want to give the impression that it's only very big brands that can be successful? Because we have some very small brands like Pitchfork, it's less than 1%.
- [46:28]
Peter Kafka
You fold it into the GQ, but
- [46:30]
Roger Lynch
it has a high. We put it under GQ, but it has its separate editorial team and operates under its own brand. And has been very successful. It actually has one of the largest direct audiences and now has a subscription product which is doing very, very well. Like that's a brand that will do well in this era because it has authority. It is more niche in its content area. It's never going to be as big as Vogue, but it has a point of view and it has a loyal, dedicated audience. So it's not just big brand, small brand. It really is. Does your brand have authority? Does it have connection with audience that is really deeper than search or discover traffic.
- [47:16]
Peter Kafka
Another way of putting my question, what percent of publishers, existing publishers, do you think survive this era?
- [47:21]
Roger Lynch
Well, I mean, we've already seen a lot of that damage done today. So of the publishers that are left, it's a higher percentage that will survive than it was five years ago. But certainly they're not going to all survive. I think that writing is on the wall, or at least not in the form that they are today.
- [47:42]
Peter Kafka
Speaking of the future, one day Anna Wintour and David Remnick will no longer work for you. They're not young people. They're very good at what they do. And your company seems, I don't dependent on them, leans on their authority in a really meaningful way at the New Yorker. And then broadly for Anna Wintour, what is the plan when they leave? How are you thinking about who's going to fill those shoes?
- [48:10]
Roger Lynch
Well, you know, first of all, for people that are in this field, those are the pinnacle jobs. They really are. And you're talking about two of the most successful editors ever. So it will be very, very difficult to find people who could ever replace them. But guess what? I'm sure the same was said about Grace Mirabella when she ran Vogue for several decades before Anna came in, or Tina Brown or William Shawn or any of the great editors that have been attach attached to these brands over many, many, many decades.
- [48:43]
Peter Kafka
Have either of them said, this is who I want to replace me? Just don't tell anyone yet?
- [48:47]
Roger Lynch
No, no. I mean, it's very funny because one of the things I also implemented when I joined was succession planning. It was very clear that this had never been done before. It got an ass. And it caused people to be very uncomfortable to start talking about who could ever possibly replace them. But we. You always look to have a broad selection of potential people who could fulfill a role, but you never know whether they're going to be available or what the situation is. And we also work to bring in talent, specifically with the idea of succession. So it's something that we run a really disciplined process. Every single year, I report it to my board. We spend time going through. We have our editors.
- [49:35]
Peter Kafka
Wait, so what does that look like? You run through a process of, if David Remnick got hit by a bus today, here's who would replace him.
- [49:41]
Roger Lynch
Look, the standard process for every company I've run is you have emergency successor identified. You have a list of people who could be ready now or in the next year or two. You have a list that could be three to five years and a list that could be five plus years.
- [49:58]
Peter Kafka
So these lists exist. The files exist. They're on your desk. As Pam Bondi would say.
- [50:02]
Roger Lynch
They're not on my desk. They are locked away.
- [50:04]
Peter Kafka
And you revise them periodically?
- [50:07]
Roger Lynch
We revise them every year. We go through a formal process where we evaluate it every year, and some names are added and some names drop off.
- [50:16]
Peter Kafka
And do Anna and David participate in this process?
- [50:19]
Roger Lynch
They do.
- [50:20]
Peter Kafka
Okay. All right, let's find the list people, Conde, and ask moles. Send me some.
- [50:25]
Roger Lynch
Good luck with that.
- [50:26]
Peter Kafka
One last question for you. The biggest movie in America, I think, or biggest movie in the world, I think, is Devil Prada 2. It's about Conde Nast. They don't call it Conde Nast. They don't call it Vogue. It's about your company. It's owned by Disney. Do you participate financially? I know you guys did a lot of marketing for it. You had Anna and Meryl on the COVID of Vogue. Do you participate financially in that movie's success?
- [50:53]
Roger Lynch
No, that movie is their movie. It's not our movie. And we have no direction participation in it, but we certainly have a lot of fun with it. And I think Anna and Meryl going over on the COVID of Vogue. And as you may have seen, Chloe, our editor of American Vogue, had to work hard to convince Hannah to do that because that is not who she is. Was fabulous. And that cover of Vogue with the two of them was iconic. But what I would say is that movie has generated a lot of interest, not just about Vogue, but about Conde Nasty. So it's been good for our business. It's certainly been good for our business.
- [51:31]
Peter Kafka
I know for a while, every publisher and we talked about this, said, hey, we make all this amazing. We make great stories, et cetera. These things are often turned into movies and television shows. You really got to lean into that and figure out ways to get these things made, either by ourselves or with partners. And for a while during the streaming boom, the streamers were buying literally anything you guys could make. That does not happen anymore. How have you rethought the business of getting into Hollywood and television and streaming?
- [52:02]
Roger Lynch
Well, that business has shrunk as an industry. The number of new shows and films being produced has shrunk, and the time it takes to get something approved has shrunk. But for us, we had seven shows and movies premiere last year. We sold 11 new ones. So our team, it's a very small team, but our team does, I think, a really good job punching above their weight with that. But, you know, it starts with, you know, all of that starts with the IP of our journalism and our content.
- [52:33]
Peter Kafka
What's more important for you to figure that out or to figure out, like TikTok and short video, that more people are consuming more often?
- [52:40]
Roger Lynch
Well, short form video is a much bigger part of our business than film and television. So that in terms of revenue, certainly short form video is very important for us.
- [52:50]
Peter Kafka
Roger lynch, you've been there since 2019. How much longer do you have? When does your succession plan kick in?
- [52:58]
Roger Lynch
I always tell people I've started a number of companies. Most of the companies I run are companies I've started. And even companies I've started, I've gotten bored after maybe four or five years. I know when I get that feeling like I'm starting to get bored, time for me to do something. I never get bored in this job. Honestly. There's, first of all, always really challenging problems to solve and also the most interesting intellectual people to deal with. So I have no plans on leaving. I really enjoy it and I'm definitely not bored.
- [53:29]
Peter Kafka
And as a bonus, you get to talk to people like me. Roger lynch, thank you for your time.
- [53:32]
Roger Lynch
Thanks, Peter.
- [53:34]
Peter Kafka
Thanks again to Roger Lynch. Thanks again to Charlotte Silver, who produces and edits the show. Thanks to our advertisers who bring it to you for free. Thanks to you guys for listening. More media bosses coming your way soon. See you then.