Advocate / Out owner discusses future of the company

Stephen Jarchow Stephen Jarchow, the 58-year-old chairman of Here Media Inc., owner of Gay.com, The Advocate and Out magazines, recently gave an interview to The Dallas Morning News in which he talks about the travails facing not only his company but the news media in general.

One factoid that jumped out at me was this nugget about paid vs. nonpaid subscribers to Out:

Out, which has 75,000 paid subscribers and 75,000 who get it free

It seems like a lot to be giving out half of your monthly subscriptions to nonpaying readers.

As the article notes, Here Media “is a publicly held – but delisted and unprofitable – company owned primarily by Jarchow and his longtime business partner, Paul Colichman, 49, who lives in Los Angeles.”

One quote also grabbed my attention, when Jarchow talks about the potential benefits from the synergy of his online assets and old-media holdings.

“As the result of this deal, we have become a unique company that straddles traditional distribution and digital distribution,” Jarchow says in his Preston Center office. “We own pretty much the entire media for the gay marketing space.”

This certainly has not been the case with mainstream media companies: Just look at the disastrous marriage between Time and AOL. Certainly since Here took over Out and The Advocate, both publications have made great strides in improving their content and relevance in today’s instant media world.

One of the best moves the company has made was to send  Kerry Eleveld to Washignton D.C. to cover breaking LGBT news for The Advocate‘s Web site. [Not to mention the boost for NLGJA since Here is subleasing office space for Eleveld in  NLGJA’s national office.]

But the downturn in advertising has led Here to turn The Advocate into a monthly magazine rather than being bi-weekly. And some readers / critics still complain its coverage is old news by the time the latest issue hits newsstands. Plus most of the content is posted to the Web site, thus making it an easy decision for subscribers looking to shed monthly expenses to ax their subscriptions.

While it is less than clear from the Dallas News article, Jarchow seems to indicate that the printed version of the magazine may be going the way of the Dodo:

Jarchow thinks he can tighten costs (he’s laid off staff), fine-tune its pitch to advertisers and draw in a larger paying audience.

“This is basically a news and commentary magazine,” he says, holding up a recent Advocate with a portrait of President Barack Obama.  “And this is a fashion, entertainment, what’s-hip-and-happening magazine,” holding up Out with a provocative photo of pop singer Lady Gaga.

Advertisers like hip much more than news, he says, so the staffs are being consolidated and The Advocate is moving to more of an online presence.

“We had to learn the magazine business and make these publications profitable in the teeth of the worst magazine market in 50 years,” Jarchow says. “We’re getting there, but we’ve still got a lot to do.”

According to the article, Gay.com attracts  3 million visitors a month and makes $12 million in revenue a year. Jarchow’s goal is to reach 6 million visitors and $15 million in annual revenue over the next 18 months.

Mass appeal doesn’t seem to figure in to the company’s strategy. Rather, Jarchow is aiming to deliver a great product to a targeted audience.

“Small is the new big,” Jarchow says. “The key to building a big company is to do a series of small niches and be very good and completely dominant within those niches.

“For us, generating $50 million in revenue from a particular niche is a big success. For a major studio, that’s one day’s overhead.”

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