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Hearst Magazines International (A)

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Yale School of Management
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In 1989, George Green took over as the first head of Hearst Magazines International (HMI), a division founded to spearhead the Hearst publishing empire’s forays outside the United States. Green started with a slim list of international titles, but under his direction HMI had expanded to 156 editions in 36 languages, distributed in over 100 countries. In 2007, annual earnings for the division were up 37 percent over the prior year and the division reported a cumulative annual growth rate of 30 percent over the five previous years. Green expected international to soon provide half of Hearst’s corporate earnings – a considerable achievement for a division that had included not much more than a few Spanish language editions of Cosmopolitan a decade and half earlier.

Cosmopolitan led the international list as Hearst’s most successful magazine with 60 editions. Cosmo, as it was familiarly known, was aimed at independent women in their 20s and at advertisers marketing products and brands to those young women. Cosmopolitan was a mix of beauty, fashion, relationship advice, self-help tips, and health pointers, all presented in a breezy personal style with spicy cover headlines that occasionally pushed the envelope of social acceptability. The magazine always included the famous Cosmo quiz, which in a few multiplechoice questions promised the reader a better understanding of herself and her guy.

Other Hearst titles followed Cosmopolitan into international markets, including CosmoGIRL, Country Living, Esquire, Good Housekeeping, Harper’s BAZAAR, House Beautiful, O - The Oprah Magazine, Popular Mechanics, Redbook and Seventeen. In addition, the division opened international markets for non-Hearst titles such as Men’s Health and National Geographic Traveler. Including titles produced by other publishers, HMI oversaw 190 editions.

During his tenure, Green had managed a difficult balancing act, maintaining international magazine brands while keeping the business and editorial functions of each edition distinctly local. Green had several choices for an entry strategy into new markets. He could license the Hearst titles to local entries, or on the other hand, he could enter these new markets as 100 percent owner of international editions. Where possible, Green focused on an intermediate alternative, a joint venture, where in addition to negotiating a license, Hearst partnered with a local publisher to create a new publishing entity, collaborating on business and editorial matters with partners immersed in the local milieu.

There were no questions about Green’s success, but next steps were not clear. Were there expansions within HMI’s current market approach? If not, where would Hearst find new growth? One possible strategic change might be to increase the equity in existing joint ventures and renegotiate licensing agreements to create new joint ventures. But would this change in equity throw off the delicate balance of control between local and headquarters, and would local licensees allow Hearst to up its equity stake? Were there better options?

Published Date: 24/10/2008

Suggested Citation: Jean W. Rosenthal,  Jaan Elias, and Ravi Dhar, "Hearst Magazines International (A)," Yale SOM Case 08-067, October 24, 2008.

Keywords: Publishing, International Expansion