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Frank A. Bennack Jr.: I was thinking coming over, this is probably about the 100th time that I have made the introduction for one of these morning breakfasts and this ones a particular pleasure since its my colleague, David Carey, who, incidentally, despite the fact that Im chairman, I not only didnt invite him here, I didnt know he was coming until yesterday. So, Im completely absolved of any partisanship here. I also wanted to say that its an extreme pleasure to talk about the streaming, which I think were doing again. Our recent conference in Los Angeles, the streaming on that was fabulous and those of you who didnt pick up on it, who didnt watch some of the sessions as you werent personally in attendance really missed something. Weve been showing them over in our building and the quality is good, and of course, the number of the sessions were terrific. I guess with representation of Conde Nast and Newhouse here, that I wont talk too much about how large our magazine company has become, David. But Ill introduce David in a few minutes. But before I do that, I wanted to mention that we have a new knowledge partner working with us on this series and Id personally like to thank McKinsey & Company for lending their support and in particular, Geoff Sands. Lets give him a great round of applause. Geoff, as you know, is director and leader of McKinseys global media and entertainment practice. Hes also a Paley Trustee and hes also gonna do the interview this morning. So, were going to not only take his money but put him to work. Id also like to acknowledge, because its always important that our trustees attend these sessions and see whats going on in this great place and my colleague Stan Shuman, who is one of our trustees, is with us this morning. Stan, welcome. I hope also that youll join us next week on October 20 for a breakfast with Interpublic Group CEO Michael Roth or and/or on October 25, when well have a dialogue on engaging the next generation of news consumers in partnership with the Hearst Corporation of New York. So, hopefully you can catch one or both of those. And finally, I want to say a quick word about the Broadcasting and Cable Hall of Fame Awards. Theres a dinner, which most of you are familiar with and which takes place two weeks from today on October 26th at the Waldorf and for the first time, the Paley Center will be a beneficiary of this great industry event. And as a past inductee, Im a bit biased but I also see Matt Blank here and also B&C Hall of Famer Bill McCurry for B&C is here this morning. So lets give them a round of applause and thank you very much. David Carey is someone that has had two careers at Hearst. Im another. I flunk retirement and he just went off and made his fortune elsewhere and came back to Hearst that was more or less about three times the size that he left it. And because of our recent acquisition of the Hachette publishing activities outside of France, its really a horse race. I guess to David and to who is the biggest publisher of magazines in the world were right there, with the additions of the Hachette magazines represented by the $3 billion business for us and along with our entertainment and syndication businesses are our two biggest pods. Were about seven times the size we were when I first came into office and we made a big bet obviously on print and magazines and all that we think they are today and all that we think theyll become. Although, still, by a little bit, our largest businesses are cable networking, joint ventures with Disney, ESPN, Lifetime, A&E History, a number of which we started from scratch and have become enormous businesses. But Im a big believe in magazines. My colleague Gil Maurer, who is one of Davids predecessors, who says that when we finally get to Mars, there will be two things for us, a cockroach and a magazine. And so, its a great pleasure. David has a very distinguished career. He came back to Hearst after a long interval, not knowing, as I didnt at the time, that we were gonna build up his asset bases largely as we did the Hachette transaction. And his experience at Conde Nast and elsewhere made him a better guy than he was when he left us but he was always a terrific performer and Im very, very proud to call him colleague. So, Im now gonna ask David and Geoff to come up and proceed with the proceeding. [applause] Geoff Sands: Thank you, Frank. I guess Im also known as a poor substitute for Pat Mitchell but well do our best. David. David Carey: The last time I was here, Pat Mitchell was interviewing Carol Bartz, who promised opening remarks to make--she used no four-letter words and Ill do the same. Sands: Lets start by picking up on a couple of comments that Frank made about Hachette. You come into your new role and presumably, one of your mandates is to position the company for growth. You have the Hachette acquisition and on the one side, you can view that as new brands, new global reach, lots of positive aspects for that but you can also look at that as doubling down on the print business, which has an uncertain future. Im pretty sure I know which side you come out on but wont you put that in context for us. Carey: Well, as Frank likes to say, If youre not growing, youre falling behind. Excuse me. Im nursing a cold today. Weve watched our internal revenues over time. It had become bigger and bigger and we operate a very big company in the UK, national magazine company. But our interest outside had been through licenses and joint ventures that we had good profit participation but we actually didnt run. And the opportunity to acquire the Hachette properties outside of France. It was really a once in a lifetime opportunity to really make the companys media businesses 50-50 inside the US and outside of the US. So, if you look at the United States, you can make the case today that print is a slow growth business on a macro basis. Theres opportunities for growth in different pockets. But outside, we very much do a particular business and I brought show and tell because-- Bennack: Props. Carey: --because every publisher has to. And so, if you want to work out, you can carry the Chinese edition of Elle or the Chinese edition of Elle Men. And so, if youre thinking about the growth of China, if you think about, you know, the rising standard of living, their desire for western luxury goods, and we talked to our luxury clients that are shifting a lot of how to expand and open stores out of the west and into the east and it shows up in products like this. And so, we get enormous exposure to these growth markets. And so, some of the markets are mature. Some are growth but whats interesting about the Hearst portfolio, now the magazine division, is 40% of our revenues that Frank mentioned are roughly US print and digital, 40% international print and digital and 20% services. And so, its a really well-balanced portfolio with a lot of exposure to possible growth areas both here and abroad. Sands: And I guess anyone in this room knows scale and geographic scope can be a very good thing. I think scale has also been accused of being the enemy, on occasion, of innovation and entrepreneurship. How do you make sure that your new scale doesnt get in the way of the innovation thats required to continue to grow the company? Carey: Well, were not micromanaging these international operations from New York. And so, they dont have country heads, country presidents that run those businesses. And ideally, were pushing that sense of entrepreneurship further down into the organization. One of the big challenges of media companies today is we bring a lot of people and too many resources, I think to innovation. I talked to friends in Amazon and they speak about when they have an important new product launch, they have something called two-pizza teams. The number of people on a project are limited to those that can share 2 pizzas over dinner which is a great kind of limiting factor and I think historically, the companies have, you know, 20 pizza teams and too many people. And we bring a lot of entrepreneurs into the Hearst organization to speak to our teams, A, because they move so fast they take risk. But they also do things with resources that we cant imagine, and thats very important learning for us. And so, we have pockets of this happening through our company. One of the fun new products and perhaps, youll give it as a Christmas gift if something called Cosmo for guys. Its a tablet-only product-- Sands: Or get it as a Christmas gift. Carey: Or get as a Christmas gift, a tablet-only product created by four people in about four months for not a lot of money using existing content and existing technology to reach a new audience. Weve always known that men are kind of closet readers of Cosmo but I wouldnt really with Cosmo in a public setting. But 35% of the web traffic is male for Cosmo, you know. Men trying to figuring women and vice versa goes back to the beginning of time. And so, I was very pleased that the editor-in-chief of Cosmo took that on as an entrepreneurial venture within our biggest business overall and formed a team and made it happen. Sands: Is this about--when it comes to editorial, was this about teaching old dogs new tricks or infusing the company with different kinds of talent? Interviewer: I think its both and I think its giving existing talent permission to perhaps, break a lot of the, at times, hard to understand Orthodoxies that have governed the magazine business. The magazine business, I think, is the only media form that often you feel you have to read a rule book before you sit down at your desk and commence your activities. Whats nice is I think across the organization, people are being much more expansive in terms of what they, what they do. And we had a big business review yesterday with one of our key businesses, Good Housekeeping, and the editor-in-chief began by giving an overview of the activity shes personally involved in. The magazine, the website, the tablet editions, a set of e-books that were carving out of the archives, a brand new physical book born out of a section of the magazine called Drop 5 Pounds, and she just came back from--theyre producing a television show around this as well. I think I ran out of fingers by the time I was done and she was talking about what she was involved in. And I said, Thank goodness, that the job of being an editor-in-chief today is so dramatically different than what it was just a few years ago. And so, its a combination of technology. Its a combination of the pressures on the business that forced us to be more open-minded. And its great to see those who really step up and who sees that. Sands: The magazine publishing industry has certainly come under a lot of criticisms sometimes, quite striving for not embracing digital media as quickly or ardently enough, particularly in Id say, social media. And yet, Hearst has placed some pretty big bets , iCrossing being one of them. How do you think about the challenges of that. These are certainly bets on companies and businesses with potential for high return but theyre uncertain. Carey: Well, I dont think iCrossing is that uncertain. Fifty percent of all digital advertising is spent on search. Its hard for companies like us in the room to have exposure to that. I think Steve [IB] and Barry Diller both have figured out how hard it is to build the search engine, right? Its very difficult and iCrossing is an enormous and important client of Google. And so, we get a chance through iCrossing to have exposure to, you know, the vast amounts of money that do get spent on search that grow every year. We all see the Google earnings reports. ICrossing is also on the front lines of creating social media programs for clients but also around the whole concept of brands as publishers. And, you know, the discussion around media paid, earned, and owned and its been hard for us in our traditional format to get into the owned media business, to create content that our clients own. Thats a little bit in conflict in what we do. Then iCrossing is out there doing this for scores of clients and I think that. That piece of it is a little competitive with our businesses because were not gonna stop to owned media, you know, transitions as the client spend more. We can only choose to participate in it or not. But we can also enhance it. For example, iCrossing won a significant piece of business last week in the automotive sector and when they were going into their pitch, they brainstormed with the editors of Car and Track, Car and Driver and Road and Track and Popular Mechanics. And so, they had a lot of insight into the space before they went to pitch the client and they won. And so, thats an example of how iCrossing to be known by a media company gives it a competitive edge than if it was owned by a private equity or one of the big agency holding companies. Perhaps, it would not have. Sands: What other areas in the broad area of marketing services or digital without revealing any of your of plans, but what are some of the other areas that you think will attract us? Carey: So, we have done two acquisitions in the last six weeks. One, we did an international tuck in acquisition for iCrossing. We purchased the search company that has a good presence in both Spain and South America to give its own greater geographic footprint. We also, in our CDS global business, which is our subscription-fulfillment company based in Iowa, these are the people that if you subscribe to a fine publication from Meredith or Conde Nast or Hearst that you send a check to in Iowa. And we purchased an internet bill-payment and presentation, a small technology company that we built it on the CDS as well. And so, those businesses, CDS was used to be primarily a letter shop. Its increasingly becoming a technology company in its own right, serving most of the magazine industry, you know. Hearst has a unique position in CDS. About 60% of the magazines industry subscriptions actually CDS processes. And so, were happy to play that role for virtually everyone. Sands: I would imagine youre facing the same kinds of decisions that most media companies, traditional media companies are facing today, which is capital allocation. How do you, you know, what do you with the incremental dollar? Do you put it into the core business which has more certain returns but perhaps, a finite lifespan or do you put it into the higher growth businesses which may represent the future but may be a little less certain in terms of the short-term return. How do you--whats your frame for thinking through those decisions? Carey: Mostly, we put in an envelope and we give to Frank and Frank decides on that how much to get to the magazine division and how much for other divisions at different times. You know, weve made a series of investments. So, the core digital business was an investment for a period of time for us and I think for most of the magazine publishers are now profitable for everyone. We made a capital decision about 18 months ago against the tablet business and we came with a lot of resources. We hired a team. We hired a lot of engineers and that business is just flying and were happy. We didnt make--some of the mistakes perhaps we made in the earliest stages of the web and that were very focused on charging for content. This is an opportunity for us to monetize the consumer relationship, which has been in our websites. And so, we announced about two weeks ago that across the Hearst portfolio, we have more than 300,000 paid monthly circulation units via iTunes, via Zinio. That was basically zero around this time last year and were excited as we can be for the Kindle Fire and theres this gonna be this fantastic trade war between Barnes & Noble and Amazon and Apple thats gonna be an enormous benefit for the magazine industry. These are people bringing out better devices that are used to consume our content at lower prices. And one of the great legacy of Steve Jobs, there are so many, was he taught people to pay for content. Before that, it was hard for us to actually have consumers find an easy process to pay us for the content they read digitally and iTunes did that and then replicated by Nook and now replicated by Amazon. Sands: But what makes you confident that the, that the tablets are generating net positive circulation as opposed to just cannibalizing from existing? Carey: Well, the research weve done looks about half of the people that are subscribing are brand new to the franchise. Now, the magazine subscription process in its ink on paper version, you know, its a bit cumbersome. Its the only business thats probably out there that after a year, we have to send you six direct mail pieces, Geoff, are you sure you want to stay with us? Matt Blank doesnt have to do that with his millions of customers at Showtime. And so we have a lot of people whose intentions are there but just fall off. They forget to send the check in. they forget to go online and then they just forget about it. And so, in an on demand world, someone can mention a great article in Esquire and you go home and buy and have it in a minute. Or 40% of the subscriptions that weve sold are monthly continuous services, $1.99 a month. You get billed every month until you tell us you want to cancel. And our assumption is were gonna get much better lifetime value out of those subscribers than we do out of the traditional way that we acquired our customers. Sands: And I presume that the value proposition to advertisers is full of potential with the kinds of things that you can do on a tablet. Carey: Absolutely. So, and advertisers have a lot of questions and we in the other major publishers, were doing a lot of research. The engagement between readers and the tablet products mirrors or exceeds with our print products. Its, you know, read many times, read over a long period. Issues that are saved, and we really believe that for consumers, its just a choice of how they want their contact. And in terms of--for advertisers, many of them are coming in with enhanced advertising as well, which looks fantastic on the devices. But, you know, we learned something very important from our Apple in our Nook color relationship. When the iPad came out, we thought this was the ultimate device. This was all of our content had to go through the iPad. The screen is good. The ads look so good. Its a little computer that can do everything. And then when the Nook Color arrived, it didnt have as many functions and we started producing replicate products and we were first of the big companies to go on with all of our portfolio and boy, what an incredible surprise and it taught us that theres kind of 2 consumers of tablet media. One is those who want a video of Oprah, one and every page to be interactive. But for the replica market, its potentially far bigger where portability of content is the key benefit and not the enhanced features. And the economics for us out of that part of the business are far better. Sands: But the--a lot of the major marketers are getting pretty sophisticated and clever about how theyre developing direct relationships with their customers. Its not just putting up a web site anymore that nobody visits, but using social media and using a lot of data to understand behaviors and to make direct contacts. Are you concerned in way about having your relationship disintermediated? Carey: Around owned media and as they go direct and you look at what Burberry has done for example, which was brilliantly executed social media strategy with I think 8.6 or 8.7 million Facebook likes. You know, we live in that ecosystem and we have to find a way to complement it so. So, were investing more resources against social media but we should probably do even more. Cosmo and 17 are the third and 4th magazines with the highest Facebook and Twitter kind of fan base, if you will. But its an area that we have to allocate even more. You look at the voice, which is produced by Mark Burnett in which our company owns 50% and you see how brilliantly social media has woven right into the whole concept right from the start. Or if you watch the VMAs this year at MTV and social media was right in the center. And I think the magazine industry needs to answer that call as well and have social media in our print versions, not so much being--but to be at the middle of some of the concepts. Online, its easy. All of our pages, were rebuilding all of our sites in HTML 5, making it very easy to share content. But how do we cross the bridge to the physical, on paper version as well. Sands: When you turn it over in a minute to some of your friendly rivals in the audience, they might have some questions for you but one thing thats on everybodys mind, I think is the economy and what that may--what impact that may have in the committing year. Any insights to share? Carey: I wish. You know, in the US economy, for the industry, the magazine industry had a better start to the year, had a longer summer. We just thought saw the PIB numbers for the industry. The industry overall was down 5.6% in the third quarter. We did a little better than that. The new stand sales had been a bit of challenge and thats directly with the economy. So, we definitely need for the circulation piece, an improved economy will help us. But if you, you know, wake up every day and read the newspapers, you want to go back to bed pretty quickly, you know. We have to operate our businesses in good times or not. And if anything, operating during the tougher time gives us a lot of discipline. We are testing a new print product HGTB, a magazine that you perhaps hopefully have seen. I have one more prop to show and its off to a terrific start. We have 100,000 subscription orders in house. We got early, early positive news from the newsstand. And there were a lot of questions about it seems like a crazy time to launch or to test a new magazine. We have the same questions asked to us when we tested Food Network Magazine in 2009, much worse time than today for the magazine business. You fast forward 2 years, Food Network has 1.4 million circulation. Theres nine titles in the food category. Food Network is networking, gaining on number and in my own personal experiences, myself, Im a product of a joint venture in the company. I was the publisher of Smart Money and Steve Schwartz now our chief operating officer-- Sands: That was the 92 recessions, wasnt it? Carey: We laun--so we launched the magazine and we announced in 1991. shortly thereafter, Iraq invaded Kuwait. The stock market fell points to points. There were huge outflows out of stocks, bonds, and mutual funds and we were launching a new magazine about stocks, bonds, and mutual funds. And people thought we were insane, you know. Its almost like starring in a live skit or presentations. And we had 2 issues and we learned a lot and we didnt deploy so much capital but enough to get the product out. And lo and behold, by the time the product really kind of got a new wave, the economy had improved. Mutual funds started to attract a lot more money versus just outflows and the business took off. And so--. Sands: So, this is part of an explicit strategy. Carey: We find the worst time that we launch, thats exactly it. Sands: Right into the teeth of the recessions. Carey: And just like the old New York song, if you can make it there, you can make it anyway. But theres something to be said about launching in a tougher period. You have more discipline. Youre much more focused on the performance and if it can work now, it should 100% work when GDP is stronger. Sands: Great. Male speaker: David, as you know, Im a huge consumer of magazines. When David was in New York, he used to personally deliver on Sunday that advance copy for me, which I appreciated. Carey: The doorman was very nice. Male speaker: But Im still one--you guys love me. Im still one of those guys, I go to the airport and I go into the magazine store and Im upset that there arent more magazines that I want to buy for a 7-hour flight. But Im now getting a lot on digital. And I like it. I dont--its funny. We see this in our business, people who will consume the same products in different ways. So, the first question is how much will you see in the growth or maintenance of the size of your market versus the volume of usage by current users in the category. But two, it also seems somewhat schizophrenic strategically in the business right now that there are some magazines where Ill see them on the newsstand and literally, a week later, I happen to use the Zinio platform because they gave me a whole bunch of magazines for free at some point way back and it stuck there. But see it on the newsstand and literally, a week later, itll pop up on your email that its now available digitally, where its never made much sense to me. Its sort of like, you know, as that person who really wants to get that content, I want to be in the easy pass lane. And I just dont know if that is intentional or its a strategy difference, the difference across the business or how you guys do that? Interviewee: Well, you know, first, in terms of the newsstands. So, while the newsstand has been tough for the business, airports have not been the class of trade that is down. In fact, that class of trade is held above more supermarkets and drugstores. So, its not impacted by people bringing their own content for their flights to California. What you speak about in terms of perhaps, not timing of the digital editions. Some of that early on was a function of the Apple approval process, potentially not so much through Zinio but that was a very arduous process and often, there were delays that is much better. What youd probably find though is that, you know, our news--our magazines go on sale targeted on a Tuesday but newsstands, when they get them will often put them out as soon as they show up. And so, we do have a targeted arrival date that it all kind of goes live but we cant control the news stand channels so much. And so, HGTV had a street date of Tuesday of last week and I was getting emails from friends who bought it the Friday before because they working and there it was. And so, thats a piece of it, especially if youre going to airports where they will be almost there because we tend to get those copies in the airports first and theyll put it out and not really pay attention to our street dates. Carey: Thank you. Male speaker: Oh, thank you. First, I would like to confirm that we did sell because of size, as you mentioned in your presentation. We were too small in a lot of countries, not in France but in many countries. The size of the business we have in the magazine was too small. So, it was the basic reason why we sold and thats why we find--we found an agreement. But my question was on the physical distribution of magazines because probably, what we will see in the future is more and more distribution of contents with the digital networks as you mentioned, our platforms. And there is, maybe a waste--not a waste but at least some evolution, such evolution of the physical distribution of magazines. And how do you see that? Does that represent for you a threat or how will you manage this question in the future? Carey: Well, you know, one of the messages that we try to get out as an industry in the last couple of years, if the consumer demand for subscriptions has been great and weve seen really no erosion on the subscription side whatsoever. Magazines are in their print form are affordable and theyre portable and especially, among young women and their love for celebrities and fashion. And so, in the subscription side, perhaps, worries about the US PS and whats gonna happen, that would touch all of our businesses but we feel good about that. And on the newsstand side, you know, we do face challenges primarily as a function of frequency of shopping to Walmart to K-mart, places where a lot of magazines are sold. Thus far, the digital or the tablet content is, feels like its mostly additive. There will be a time perhaps that will not be so and you can imagine it right now, we have 25 million print subscriptions in our company and that complexion could change. Maybe one day, itll be 22 million print and 6 or 7 million tablets so, we think we have growth but I think the mix will start to shift over a long period of time. Were okay with that, you know. The economics out of the digital distribution are pretty good for us. I know there was a lot of talking controversy about Apple and 30% and so on. Keep in mind that for a newsstand copy, we keep about 55 cents of every dollar and we have to print and put it out. And so, well take 30% as a fair deal. And there was a lot of discussion about the data around Apple as well. And so, you know, were the largest newsstand company in the U.S. We have no knowledge of who the newsstand buyer is. We have no data on about a quarter of our audience anyway. Its interesting for Apple in the [IB] when people would voluntarily want to share their information with us are running about 60%. So, were pleased with that as well. And so, if the business starts to shift, were okay with it, both the economics and were really not disintermediated from most of the consumers when that happens. Lee Westerfield: Hearst was one of the earliest-- Sands: Can you identify yourself so that-- Westerfield: Lee Westerfield-- Sands: For posterity. [laughter] Westerfield: That too I guess. Lee Westerfield at appMobi. Sands: Thanks, Lee. Westerfield: I want to ask you in a little bit more detail regarding your HTML5 strategy in the digital distribution because, first, clearly its one of the foremost and largest of the major media companies to break through with HTML6 more recently and with the thought process behind HTML5 you dive into that at a time where a lot of folks were saying it wasnt up and ready for prime time. What was the thought process that involved you in that regard and was the Apple tariff part of that or simply distribution across multiple platforms? Carey: So, the Apple tariff was not part of it because were not charging for access to the Good Housekeeping side. But, you know the goal was to create a seamless experience whether youre at your desktop, whether youre on an iPad, whether youre on a mobile device. And if you look at the Good Housekeeping experiences before, they felt different and sometimes, a lot different. And so, in every possible way, this is good for our business. This is good for our clients. It makes it much easier to sell advertising across the platforms and since you know these stats better than I do, the number of page views done on mobile devices goes like this. And so, we have to make sure that over time, as mobile becomes more and more part of how our content is consumed, that it lives up to the same experience of what we do on the larger screen. My only frustration is it takes a long time and that product took a year. It was built by an internal team and why cant this be done in six months and they say it cant be done. We are now, right now going to migrate two more of our sites and products over to all HTML5 in the next six months and it will take us probably more time than I like but we will get through the entire 19-product portfolio as quick as we can. If you havent seen the new GoodHousekeeping.com, it looks fantastic. It allows us to surface much more content. The video is much better. Everything about it, its such an improved product and weve already seen in terms of the engagement metrics, a great improvement. Brian Stengel: Brian Stengel with Waller Capital. One of the things that your magazines do quite successfully is catalyzed demand on the consumer side to do something, purchase something. Have you thought it all about moving laterally from subscriptions and advertising into e-commerce where you can somehow benefit by this demand that youre catalyzing to the magazines? Carey: Yeah, thats a great way to say it in e-commerce. So, if 2010 and 2011 were really a bit focused on tablet media and were happy with that growth, were now really bearing down on e-commerce. We have a very important partnership with JC Penney, with Esquire, around CLAD, which youll see is a new mens site and around with Good Housekeeping and Oprah and other titles around something called Gifting Grace. And again, this breaks a lot of the long held orthodoxies of the business. Our editors consulted with JC Penney on the look and feel of the site on the range of products using their expertise and knowledge about the marketplace to build a better experience. And so, we love that that was happening. Youll see us do that more and more. And so, the Amazon Kindle Fire will be an important announcement because well have a chance to have touched by out of our editorial. You know, right now, if you look on the regular Kindle, we really--we cant produce our content in color but with the arrival of the fire, we will actually, before we ship the content to Amazon, well find out which of the products that are editorially written about are sold in the Amazon environment. And theyre gonna know who you are and theyre gonna have your credit card information. And so, a lot of our e-commerce experiments today and we have many have been okay but theres too many steps between exposure to the content and what they have to do to acquire it. And you have to look at things like the Net-a-porter fashion app on the iPad. You know, its really a fashion magazine. It has an editorial POV, not as good as what we do but its gonna get better. But you can buy everything off the page and I think their editors do create demand. Historically, we have not found the way financially to participate but all thats gonna start to change. Bill: I was the publisher of Broadcasting Cable and Multi for some 25 years. I was just reminded of your launch story in 91. I was at a breakfast in D.C. much like this one. Senator Conrad Burns, who I think was from Wyoming said, In my part of the country, theres an old Indian expression that the success of your rain dance depends on your timing. And I think thats very true. Im just--Im just curious how do you see, lets say your revenue is from the print side these days from other sources and if youre looking ahead three years, five years out, how would that mix change do you think over time? Carey: Well, in the US, as I said, the print business is expected to be a slow-growth business. Well have some of our products that will enjoy strong growth and some of our products will have less growth. Were definitely seeing, you know, rapid revenue growth on all of our digital products. And so, our core digital sites, in terms of the tablet media piece as Ive mentioned recently in an event that, you know, well be at a run rate of more than 10 million dollars a year of consumer revenue from tablets before we know it. We didnt think that was possible 24 months ago. Were gonna get better. Its selling more and more digital products to our consumers over time. And so, our goal is the advertising piece is very important both print and digital but clearly to drive much more consumer revenue across the whole company and all of the new tools and technologies, make that so much easier for us and thats very important. And if you looked in the iTunes store in cookbooks about a week ago, three of the top 5 books were from Good Housekeeping and were from the archives. And one of the, you know, my big hobby horses if you will is we sit on a treasure trove of some incredibly valuable content but we have not been, as an industry, very good and windowing it over time like our friends in the video industries. And the next wave of technology really allows us to do that. Jim: Jim [inaudible], YGA. Continuing this theme of video, what are your thoughts around contextual serving of videos once the page has been written and rendered to add to the consumer experience? Carey: I think that video has been hard for us because our sites still dont have quite the scale. We tend to--it doesnt tend to be economic for us. And so, were always looking for better solutions. One of the companies that came through our Mark Burnett acquisitions, something called Vimby, you know, with Vimby and so, we were wrestling with a concept for 17 magazines which had a fantastic program that readers could vote to have one of them on the cover of the magazine and we were struggling with the video solution and the people at Burnett suggested Vimby and they produced it around on MTV. And so, were looking for ways and video to have high quality to lower cost for us and so, were always open to that. Weve struggled a bit on our sites and we probably have less video now than we had a year ago but were still looking to crack that code. Sands: David, in deference to Frank, I think we want to release you promptly-- Carey: Thank you. Sands: --so you can get back to work but thank you very much. Carey: Thank you very much. Thank you.