Future CEO Jon Steinberg: ‘I’ve learned from Buzzfeed how to build things’

The Media Leader Interview: Cannes Lions 2023

Future’s new CEO is keen to build things, having built two ‘new media’ start-ups and inherited a business known for a flurry of acquisitions. But Cannes Lions, for this media owner boss, is seen as more of a chance to sell than be inspired.

“It’s been two-and-a-half months, don’t age me!” pleads Jon Steinberg about five seconds into his interview with The Media Leader, correcting a question lead-in about having been in post for a “few months”.

It becomes apparent that time is very much front of mind for the new-ish CEO of publisher Future, who took charge in April, following in the sizeable footsteps of Zillah Byng-Thorne.

The theme of our conversation, a series of interviews with global media leaders to coincide with Cannes Lions, is why does an “international festival of creativity” matter so much to a seasoned media leader? As this publication has noted, the awards and creativity-focused conversation within the Palais can seem markedly different to the media and tech dominated chat that echoes around the hotels, bars and marinas.

When it comes down what he’s most looking forward to at Cannes, it’s a well done to WPP for providing some world-class schmooze.

“WPP has an event called Stream that they do on a little island — it is the best collection of media agency people and brands of any event that I’ve ever gone to,” Steinberg says. “I’ve gone to it three or four times and that is always the highlight of Cannes.”

Otherwise, Steinberg insists that Cannes does matter, but clearly because of who’s going rather than the awards or thought-leadership content that ostensibly is at the festival’s heart.

In his typical no-nonsense manner of speaking, Steinberg says: “I’m going there to be with ad agencies, media buyers and brands…. it’s having the meetings that you would have basically in New York or London, the difference is it’s a more relaxed setting, the sun is shining, people are comfortable.”

Steinberg has obviously never sweated over deadlines in the Palais press room as perhaps some of his new employees would be accustomed to, but that’s the thing about Cannes: it’s such a large gathering of professionals that shared experiences can be worlds apart.

Indeed things could also be more different for Steinberg at Cannes in 2023 than he anticipates. He became a well-known name in what used to be “new media”, having joined Buzzfeed in 2010 when the start-up had only 15 employees on its books. Driven by a pioneering approach to selling native ads with branded content, Buzzfeed became sexy enough to attract buyout interest from Disney. “I was begging Jonah [Peretti, Buzzfeed’s founder and CEO] to take the deal,” Steinberg laments.

Six years later, and earning credit for his role in Buzzfeed’s runaway success, he left to launch and run Cheddar, a similar online newsbrand covering tech and culture, which he sold just three years later to Teads owner Altice for $200m in 2019.

Sir Martin Sorrell on why Cannes matters, the uncertainty of AI, and dinner with Berlusconi

Building for the Future

With that record as a digital entrepreneur, then, why in the world decide to run a magazine publisher?

“I wanted the job because I wanted to run a scaled internet business because that’s what I know: internet media. [Future] had great financials and I didn’t want to be selling advertising that was a ‘hard sell’… I knew that because this business had high intent; that’s really what makes us and Dotdash and Ziff Davis and Red Ventures different from a lot of other players — a third of our revenue is affiliate ecommerce, people coming in buying stuff and us getting commissions. So when I got called by the headhunter for the Future job, I knew that I wanted to do it right away… [and] we made the decision to move to London, which is a big switch when you have a 13- and a 14-year-old.”

Steinberg believes the Future board was impressed by his record as an entrepreneur, as someone with a history of innovation and launching new products, rather than someone with experience of running a public limited company.

“I’m really lucky that I have a CFO who’s spectacular, Penny [Ladkin-Brand] who has tremendous PLC experience. [The board] decided what the company needed was product innovation, traffic, diversification, growth. And if anybody had a shot at doing that, it would be me.”

One of the things Steinberg is currently trying is the ambitious task of monetising Future brands’ aggregate 180 million followers on social media, a feat which has beleaguered many a publishing company over the last decade.

“I want to do branded content on social, short-form video and sell packages like our brand WhoWhatWear already does. I basically came to the board with three to five ideas that I had for things I wanted to do.”

Some of these ideas around increasing revenue around digital subscriptions were mentioned at Future’s earnings call last month, which reported a 10% drop in organic revenue for the first six months of 2023 (compared to 8% growth over the same period for the last five years). At the time of publishing, the company’s share price has dropped 56% over the last year and stands roughly at the level it was four years ago, despite all the acquisitions it has made since then (US publisher Purch in September 2018, Mobiles Nations in February 2019, Barcroft Studios in November 2019, TI Media in April 2020, and, famously, a £594m takeover of price comparison website owner GoCo. It also purchased a dozen titles as part of a £300m Dennis Publishing buyout in August 2021).

“The share price isn’t impacting our business,” Steinberg insists. “We’re doing what we do, we had £400m of revenue in the half year, we had £130m of adjusted operating profit that converted to free cash flow, the financials of the business are very strong…. There was definitely some macro weakness that we felt, but we’re still executing on everything that we’re doing. The business is in remarkably strong shape.”

Finally getting digital subscriptions right

It certainly remains a big business, worth well over £1bn dollars and closer to $2bn if you prefer bigger dollar amounts (as Steinberg does). But this entrepreneurial CEO is clear that growing user subscriptions, and not online advertising, is the route to continued success for Future.

“Digital subscriptions is a huge opportunity for us. Right now, we get a third of our revenue from magazines and about half of that is from subscriptions, but it’s largely print subscriptions. We have some people that take a bundle of print and digital, but the digital usage is very minimal, because it’s not a great experience. Right now, it’s basically a page flipper app.

“But doing native digital subscriptions, especially starting in products like The Week, that has hundreds of thousands of print subscribers [344,000]. My view is if we have hundreds of hundreds of thousands of print subscribers, there’s a latent audience that wants to have a digital subscription… we’re going to start with the brands that have the most print subscriptions, and try to offer digital subscriptions there.

“This will be a long process building a digital subscription business, as you’ve seen with The New York Times, or The Washington Post, it’s not something that happens overnight and that’s one of my long-term goals.”

This strategy matters, Steinberg explains, because subscriptions offer “really steady” revenue which is becoming increasingly important in a world where it becomes much easier for advertisers to pull spend at short-notice, thus making the ad market more volatile.

“What’s nice about advertising is there will always be a need for it. There are always budgets, but there are times when brands pull out of a market… we just went through a period where there was a big tech pullback: the tech sector was not advertising a lot, there were still chip shortages, there weren’t a lot of new products, people had during Covid bought every laptop and pair of headphones that they wanted.

“In the UK, we were able to pivot into other categories like luxury. But our performance in the US during the [2023] half year was worse, because we’re heavily concentrated in tech advertisers. If you’re large and diversified, you can ride out the waves of individual sectors going up and down, basically, but you have to be really scaled, and you have to be really diversified in your content categories and your industries.”

Podcast: Cannes you believe the news? Lions festival preview with guest Laurence Green

AI is coming, but with scepticism

Clearly there will be a temptation to cut costs, too, having taken over a business that has acquired so much in recent years and has been unable to grow revenue (top-line revenue has been flat so far in 2023). Will all the renewed interest in artificial intelligence be the answer, when it comes to automating certain production or editorial functions across a large publishing operation?

There’s the expected disclaimer — “I don’t believe that a paragraph generated by AI is going to take away the need for specialist media.” — but clearly there is work being carried out to see how AI can make the business more efficient, if not more effective. Tom’s Hardware, for example, developed a chatbot that answers hardware-related questions such as “what graphics card should I get?” by pushing thousands of relevant articles at the user.

“It’s far superior to site search,” Steinberg remarks, which if we’re being unkind, is not the highest bar to set when it comes to the UK publishing industry. Nevertheless, bots replacing search promises some significant next steps.

Steinberg reveals: “We’re using it to generate technical specifications and articles right now, which saves on average 30% of a writer’s time. We’re integrating AI in the business to improve the user experience, and then also to improve our writers’ efficiency.“

AI more broadly, is “at the peak of the hype cycle” and features in “every conversation, meeting and roundtable I go,” Steinberg admits with more than a hint of scepticism.

“All people want to talk about is AI, but people are generally speaking in vagaries and talking about how it’s going to transform everything. [They] have very few specifics that they can point to that are truly exciting. Like, yes, I mean, open AI is amazing. It’s a revolution, how you can ask your questions and it’s super easy to get the paragraph, even if half the time it’s half wrong! I’m sure it will get much better…. but I feel at this exact moment in time, it feels a bit overhyped to me.”

Perhaps, then, there are no plans to acquire an AI developer, given Future’s recent form in making strategic acquisitions under the Byng-Thorne era. Steinberg insists that “the M&A tap is not off, but admits the environment is now much tougher for boardroom shopping than it was under his predecessor.

“Given where our share price is, you know, we look to do acquisitions that are creative acquisitions whose multiple, after we take out cost synergies, is not higher than ours. So that limits what we can do, but we will hopefully be able to do what we call ‘bolt-on acquisitions’, smaller media properties that we add to the mix. We have an active pipeline, we’re looking at them… [but] it’d be impossible for us to do a transaction like GoCo right now, something of that scale and size at that price.”

After all, Steinberg is a builder at heart, not a shopper. Having made a name for himself growing and selling Cheddar, and growing Buzzfeed and failing to convince its owner to sell, we should expect more of the same at Future.

“I learned from BuzzFeed that from tiny acorns can come mighty oaks and that you can build products from scratch and launch new things. And it may take time, but it can be done.”