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Rethinking Worth
in these hard times

With the wealthy suffering as well in this recession

By Diego Vasquez
May 21, 2009

Few people are weeping for the Bill Gates of the world during this recession. But unlike past recessions, this one is hurting the super wealthy too, and they’re as worried about their future as those without million-dollar mansions. The Phoenix Company, a Hartford, Conn.-based insurance and annuities company, recently surveyed affluent folks with net worths of $1 million and more and found that 30 percent are pessimistic about their financial futures, while three-quarters feel less wealthy than they did a year ago. Those numbers were much lower during the last recession, the company says. So perhaps it’s no wonder that a magazine targeting the super-rich is coming up with big changes to combat the recession as well. Worth, the Sandow Media publication, will begin distributing free copies of the magazine to a highly selective group of 10,000 readers across the country, all of whom have a minimum net worth of $2 million and live in wealthy areas. The magazine is also reorganizing its editorial content and refreshing its design while pushing its newsstand cover price to a higher-end $18.95. Patrick D.C. Williams, publisher of Worth magazine, talks to Media Life about the fears of the extremely wealthy, how the recession will change magazines, and how giving away Worth could help it gain advertisers. 

 
What's the idea behind giving the magazine away for free to certain customers? How did you target them, what are the requirements, and what do you hope to gain?
 
What we’ve done here over the past year is we interviewed the biggest and best data research companies. And then we’ve highly scrubbed the list where we’re targeting 11 different areas across the country, the most affluent DMAs. And within those we’ve chosen 10,000 people with the highest profiles.

They have a minimum net worth of $2 million. And we have other filters like they must have at least $1 million in equity and they have to live in a grouping of where other wealthy people live.
 
We want them to feel this is something we sent them because they’re behind the velvet rope, they’re the type of person who should be reading this publication.
 

There's been a perception in past recessions that the super-wealthy aren't affected as much. Has that changed in this recession and why?
 
I think that has definitely changed because all of these financial institutions were rocked, and the stock market was hit badly.

I would never wish this recession on anyone, but there is a silver lining for Worth magazine. A lot of our editorial is based around the fact of questioning and understanding what your wealth advisor wants to do for you, and we want the reader to ask the right questions.
 
The fact that the financial institutions were shaken, and the independent advisors were shaken or scared by what happened with the Ponzi schemes, the sort of financial model of money management is being reevaluated.

This is a difficult audience to get independent wealth advice. The most trusted titles out there target themselves at those worried about 401ks, the regular working business people in the country, with just a story here and there for the wealthy.

But every article in Worth will be highly relevant to this wealthier audience.
 
To that effect, on the web site we have aggregated articles from other well-known financial and business publications that we feel will be pertinent to this audience.
 

What is the biggest concern facing the super-wealthy during this recession?
 
The biggest concern I think is, strap your boots back on and build your wealth back up.

If you had $150 million at this time last year and you’ve now got $70 million, a lot of the things that keep you up at night are the way you set up your life and the people that work for you. You need to be able to get back out there and take risks again to build your wealth back up to where it was before.
 
If you’re worth that kind of money, there’s a lot of other people relying on you, so those responsibilities are now something you’re probably very concerned about.
 

What is the biggest challenge facing you as a publisher during this recession, with consumer magazine ad pages taking a tumble?
 
I think the traditional method over the past 20 or 30 years in magazine publishing has been to lower the subscription price of the publication and get as many possible readers as you can, and then sell that audience.

I think that that model is under so much stress because of the cyclical nature of the advertising business.
 
So I think we need to go back to a model where we have more than one source of revenue to support the publications. What we are doing is saying, okay, it’s impossible to ask the consumer to up their subscription levels again, they just aren’t interested in this marketplace.

So we’re looking at the model, and because we have an affluent audience, we’re providing a service where we have a relationship with a number of financial advisors, and we feature them in the publication and on the web site. And this gives us another valuable source of revenue.
 

What challenges are unique to Worth, as a magazine targeting the wealthy?
 
I think the biggest challenge for any publication, and it certainly pertains to Worth, is engagement of the reader. We’ve got to get them more engaged in the publication, whether it be through the internet, print, conferences, or however they want to be engaged.
 
We want to continue to evolve as much as possible, and a lot of what we’re saying in the publication right now is really asking the reader to let us know what they think of it.
 

What changes, if any, are you making to remain competitive in this environment?
 
We’re making massive changes. We’re reinventing the editorial. We basically have three magazines in one.
 
The first one is called Make, about successful self-made people. The second is called Grow, featuring the more traditional editorial of Worth, where we question our readers to know how much they know about wealth advisors.

The third is called Live, and that’s all about a multi-family office for Worth readers where we question all the other sides of their lives.
 
As far as the design and the look and feel of the magazine, we’re changing that radically as well. Over the past couple of years Worth has looked more like a trade publication, but we’re changing that. We’ll have a very thick, heavy, glossy cover. And then we’re shrinking it down a bit so the overall feel will feel like more of a book journal than a magazine. It will be the kind of thing you can easily shelf and refer back to.
 
So every article in the publication should have some point you want to raise with someone in your wealth advisory team. What we want to be is the thinking person’s wealth journal.
 

How has the magazine's business model changed since being acquired by Sandow Media?
 
As well as tapping into that important national advertiser base, we’re also looking for the wealth advisors that are vetted by our audience. Plus, we’ll be charging $18.95 for the magazine. It won’t be that much revenue, but it will be an interesting stream.
 

Which advertisers are you targeting the most for the magazine, and has that changed from the past?
 
It hasn’t changed that much from the past. We’ll be looking to financial services, luxury goods, high-end fashion, private aviation, corporate advertising and high-end motorcar advertising.
 

How, if at all, do you think the magazine marketplace will be permanently changed by this recession?
 
I think the recession has really only fast-forwarded where the industry was going anyway.

I think what’s happening is that those who are willing to continually evolve will be the ones that survive. Those that are looking at large general audiences and keep numbers going with one source of revenue will have a difficult time.

Diego Vasquez is a staff writer for Media Life.	© 2009 Media Life Magazine

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