You would think that Condé Nast’s decision to shutter two of its three bridal magazines and consolidate that web content into its Brides.com site would be a boon for wedding and lifestyles destination The Knot, one of Condé Nast’s main competitors in the digital bridal space. But in some ways, it actually makes life tougher for the site, said The Knot’s co-founder, CEO and chairman David Liu. In an interview with paidContent following a session at the Magazine Publishers of America’s Innovation Summit, Liu told us that Condé Nast’s move has made advertisers more concerned about the wedding space’s viability, and said he’s spending more time than usual trying to soothe them. “Our industry is recession-resilient, but it is by no means recession-proof,” he said.
That said, The Knot is trying to capitalize on Condé Nast’s woes. The site has accelerated the move to publish its national weddings mag more frequently. Starting next year, it will publish the magazine four times a year instead of two. Liu is also looking for acquisitions that will help expand The Knot’s membership services, its e-commerce platform and its sales efforts. In the interview, Liu also shared his thoughts about the simmering debate over pay walls. Not only is he against charging users for access to the site, he rejects the entire topic as a waste of time and energy.
paidContent: Is the closure of Modern Bride and Elegant Bride a positive thing for The Knot?
David Liu: This was a bellwether moment. When we started The Knot 13 years ago, Brides and Modern Bride were what we aspired to be. To have one of those titles shut down is good for us from a competitive standpoint. But from an industry standpoint, it creates a lot of anxiety. And that’s bad. So there is some downside. But we’re trying to find some opportunities that may come as a result of the demise of Modern Bride and Elegant Bride. We need to let advertisers know that this is still a very vibrant industry, that the consumer is still getting married. The health of these particular publications is not necessarily a commentary on the state of the weddings industry and the content surrounding it.
When a title like Modern Bride gets shut down, it forces us to go out there and calm some nerves. So we’re telling (advertisers) we’re still profitable, we’re generating tons of cash — we have $120 million in cash — you don’t have to worry about us.
Earlier this year, you acquired two sites — the Facebook app Weddingbook (more here) and the new moms site Breastfeeding.com (more here). Are you still interested in acquisitions?
Our acquisition strategy focuses on ways we can augment things where we have certain unique advantages. That would be our membership and the data that comes with it, our patented registry technology, which is an affiliate commerce platform, and our local sales force. It’s really hard to build out a sales force and the accompanying technological support. The acquisitions we’re looking to make must capitalize on one of those assets.
Are you closing in on anything in particular?
There’s some stuff in the pipeline that I can’t comment on, but we are very definitely looking.
E-commerce is a model that you’ve had all along. A lot of traditional media companies are now looking to drive similar businesses. How do you view that challenge?
E-commerce represents 25 percent of our business. It’s an easy thing to say, “Let’s try it.” But it’s a whole other magilla to do it. We’ve had our pains setting up a warehouse and all the things that go along with that. When you think about the internet or digital media, because there’s interaction embedded in the user experience, it’s hard to sit there and remove the transaction away from the content consumption. At some point, those two have to meet. Historically, the line has been drawn as media produces content and advertisers provide transactions. I think that world is about to change. For one thing, the advertisers you’re trying to attract are setting up content sites themselves. As a result, the content providers are going to have to get into the product side.
So does having e-commerce make up such a large portion of your business make it easier to avoid the whole debate going on about pay walls?
The whole debate about pay walls is misplaced. What was a consumer paying for in the first place when you think about traditional media? Was it really “the media” they were buying? Or were they paying for companies to put it in a newspaper, load it on a truck and deliver it? People were largely paying for the manufacturing and “productizing” of the content. That’s no longer there anymore with online. The consumer isn’t going to give you fat margins anymore because they want the content.
It’s important for the publishers and the media creators to figure out what is the level of service that they can provide and that the user will pay for. It’s not about arm-wrestling the consumer and forcing them to pay for what they thought they were buying before.
There’s so much discussion of pay walls, it’s distracting companies from thinking about delivering the kinds of services that consumers want. The value proposition has shifted. I think Blockbuster (NYSE: BBI) and Netflix (NSDQ: NFLX) provide a good analogy. I used to pay for renting movies from Blockbuster, which gave me free membership. Now, I pay to be a member of Netflix, but I don’t pay to rent movies. That’s the same kind of shift that happened with magazines and newspapers and the advent of the internet.

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