In the winter of 2009, David Bradley, the owner of the Atlantic Media Company, and Justin Smith, one of his top executives, met for a late-night dinner at Kinkead’s restaurant on Pennsylvania Avenue to plot the opening gambits in a Beltway media war.
Mr. Bradley wanted to talk about the future of the National Journal, which he’d bought in 1997. Of all the media properties he had ever owned, the studiously earnest, weekly political magazine was one of his favorites. But recently, much to Mr. Bradley’s dismay, it had been taking a serious drubbing from an upstart rival.
“It was much happier to do what we were doing until Politico arrived in the world,” Mr. Bradley recently told The Observer. “Politico introduced a whole new standard of, I wouldn’t say quality, but I would say velocity and metabolism. I responded way too slowly.”
That night, three years after Politico’s launch, Mr. Bradley asked Mr. Smith two things: Was he committed, long term, to staying with Mr. Bradley in the District? And was he ready to fight Politico? Mr. Smith answered in the affirmative to both questions. Shortly thereafter, Mr. Bradley named Mr. Smith president of the entire Atlantic Media company. Henceforth, the cherubic 40-year-old executive would be running the National Journal, the Hotline and Congress Daily.
‘They are going to be at the more racy, tabloid end of the spectrum. That seems to be the position they have chosen. I think we’ll be more of the authoritative end.’ —David Bradley, owner of Atlantic Media Company
Mr. Smith immediately set up nine task forces, charged with reviewing everything from the National Journal Group’s sales force to its cost structures to its newsroom operations. Forty days later, Mr. Smith handed over some 80 pages of findings to Mr. Bradley.
The first phase of the counteroffensive against Politico is now under way.
During the last week of April 2010, Mr. Smith consolidated the three newsrooms of the National Journal, the Hotline, and Congress Daily. Along the way, a handful of jobs were eliminated, and staff members were asked to reapply for new positions or apply for buyouts. In an interview with Betsy Rothstein of Fishbowl DC, Charles Green, the editor of the National Journal, said that some print columns were being scrapped and more emphasis would be placed on the Web. He said that the company was also on the hunt for a new editor in chief to oversee the unified editorial operations.
Elsewhere, Mr. Smith was scouting New York to beef up his sales staff and his digital managers. Along the way, he hired New York-based graphic designer Michael Bierut, of Pentagram, to help rebrand all of the National Journal Group properties.
THE NEWLY RECONFIGURED Web site is scheduled to debut in September in time for the midterm elections. Currently, much of the original news gathered by the National Journal Group staff is hidden behind a paywall. That will soon change. “We will still have work going on behind the paywall,” said Mr. Bradley. “But for the first time, we’re going to compete in front of the wall.”
How will the new, free Web site, targeting a national audience, differ from Politico?
“They are going to be at the more racy, tabloid end of the spectrum,” said Mr. Bradley. “That seems to be the position they have chosen. I think we’ll be more of the authoritative end.”
Contacted for comment, Politico executive editor Jim VandeHei disagreed with Mr. Bradley’s characterization. “People come to us because we break news, we are authoritative and we help readers understand how Washington really works,” he said. “I think Bradley’s description is clearly motivated by business interests.
“That said, we take all competitors seriously,” he added.
To be sure, Mr. Bradley is not the only publisher in Washington tossing and turning at night and thinking of ways to eat Politico’s pie. Bloomberg LP is currently expanding its D.C. staff. The Washington Post keeps rolling out new political Web offerings. Even The New Yorker recently showed up in D.C. to throw its first ever White House Correspondents dinner party.
In a recent interview with The Observer in the lobby of the Park Hyatt in Washington, Mr. Smith said that while ad markets have been cratering around the country, spending inside the beltway has been booming. Mr. Smith said that according to Atlantic Media’s internal research in 2009, the Beltway print-ad market (as defined by Politico, Roll Call, the National Journal, The Hill and Congressional Quarterly) was up 28 percent over the past year despite the recession.
“As much market share as Politico has taken,” said Mr. Smith, “I would argue that we’re in the very early days of the digital transformation.”
During his two years overseeing The Atlantic, Mr. Smith expanded the magazine’s events staff. “The difference between us and others, particularly in New York in the consumer magazine space, is that they throw it in as value-added to capture advertising dollars,” said Mr. Smith. “We do some of that, but we build such distinctive events that we charge money for them.”
He said The Atlantic will throw nearly a hundred such events this year. Earlier that morning, in a conference nook inside the Hyatt, James Bennet, the editor of The Atlantic, had led a panel discussion about President Obama’s handling of the economy, featuring the Atlantic writers Clive Crook, Megan McArdle and Joshua Green. Here and there, members of Mr. Smith’s sales staff, including reps from San Francisco and Detroit, sat at tables alongside top marketing executives for the likes of Xerox, Cadillac, IBM and TD Ameritrade, who were in town for the White House Correspondents Association Dinner. The Atlantic event was sponsored by Audi, Shell and the pharmaceutical company Astrazeneca.
Mr. Smith said that when he first started at The Atlantic, event and digital revenue made up a small part of total coffers. This year, with print revenues holding steady in the down market, digital and event revenues are expected to make up nearly half of the total haul. For the month of April, according to Mr. Smith, The Atlantic brought in more revenue from digital advertising than it did from print.
“On the business side, it’s been about taking this content and marketing it and monetizing it across multiple platforms,” he said. “And not considering the print platform as the legacy platform that you have to protect or the most important platform that others have to be subservient to. It’s the other way around.”
MR. SMITH GREW UP in Paris; his father was president of American College (now American University); his mother, who was British, was an artist. He went to boarding school at Phillips Academy Andover and to college at Georgetown’s School of Foreign Service.
Before getting into publishing, Mr. Smith briefly pursued a career in diplomacy, including stints at the U.S. embassy in Burkina Faso and at the Operations Center in D.C. under U.S. Secretary of State James Baker. But government work was too slow for his liking. Not long after graduating from college, he wrote a letter to the International Herald Tribune, hoping to land an editorial internship in Hong Kong and launch a career as a foreign correspondent. But the only opening in the Hong Kong bureau was on the business side. Mr. Smith took it.
“I ended up serendipitously discovering that I was actually much more of an entrepreneur than a journalist,” he said.
At the age of 24, Mr. Smith rapidly built the Tribune a booming conference business in Hong Kong, which led to a promotion back in Paris, and eventually to a job with The Economist. For the next several years, Mr. Smith managed global strategy for the Economist Group, working on its magazines and Web sites, and overseeing its expansion in America.
Around the turn of the century, Mr. Smith, feeling antsy, left The Economist to help the eccentric entrepreneur Felix Dennis launch a version of the British print aggregation magazine The Week in America. In five years under Mr. Smith, The Week achieved profitability.
At the same time, down in Washington, D.C., profitability was eluding David Bradley. In the late ’90s, he had purchased The Atlantic from Mort Zuckerman. It was already losing money when he bought it, and continued to do so during the first seven years of his watch, to the tune of $8 million to $10 million a year.
In 2007, Mr. Bradley traveled to New York to meet Mr. Smith for dinner at the Carlyle. Mr. Smith was getting ready to leave The Week. Increasingly, he was devoting much of his time to Breaking Media, a digital media company he founded, which publishes the blogs Dealbreaker, Fashionista, Above the Law and Going Concern. He was also considering a job at BusinessWeek. Over the course of the three-hour dinner, Mr. Bradley persuaded Mr. Smith to move his family to Washington and try and do something no one had seemingly done in 150 years-figure out how to make The Atlantic profitable.
After two years under Mr. Smith’s leadership, The Atlantic is still losing money-but a whole lot less of it. According to Mr. Bradley, the magazine and its Web site are now losing just under a million dollars a year. “That is the farthest reach of my imagination,” said Mr. Bradley. “I’ve never seen growth like that. It’s in the teeth of the recession. He’s really good.”
“It’s the long march,” said Mr. Smith. “You’ve got to basically be experimenting and innovating in every possible way, across every part of your business and your editorial operations. You have to try and fail, and try and fail, and try and succeed.”
Succeeding at toppling Politico might be an even taller task than making a British newsweekly profitable in a hostile American market in the wake of 9/11, at a time when established newsweeklies were crumbling.
“This Washington information market is a dynamic, growing, highly competitive, cutthroat market,” said Robert W. Merry, who until last summer served for more than a decade as the CEO of Congressional Quarterly.
Prior to Politico’s arrival, said Mr. Merry, Roll Call had the dominant position in the market in terms of advertising. Congressional Quarterly had the dominant position in terms of circulation. And the National Journal had the dominant position in terms of buzz. Politico quickly changed all of that. “Along comes Politico; they basically created more buzz than the National Journal,” he said. “They spent more money on marketing. They did more to get their people on television. They were able to steal a march on the National Journal.”
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