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No trouble digesting Why should people have to buy a number of periodicals or newspapers to read the best articles? Puzzled by this question, DeWitt Wallace and his wife Lila Acheson decided to create a collection of 'digested' articles from a wide variety of sources. After failing to find a publisher for their venture, Wallace and Acheson set up shop for themselves and produced a pint-sized magazine available only through direct mail subscription. The resulting Reader's Digest was an instant success; its circulation reached 1 million within 15 years. The best... and some of mine Today, the Reader's Digest has a readership of over 100 million and is delivered in 48 different editions in 19 languages. Though the magazine's mission has changed little, content has definitely shifted. Soon after the magazine hit the stands, many competing publications would no longer permit Wallace and Acheson to reprint articles, leading Wallace to begin writing his own pieces. Each issue is now about 50 percent original copy, though the whole magazine tends to reflect conservative, optimistic values. Favorite Reader's Digest sections include the humorous anecdote collections "Life in these United States" and "Humor in Uniform." Where all the money went The Reader's Digest Association offers much more than the magazine, including products such as nonfiction books, a wide-ranging musical library of CDs and cassettes, and video cassettes. In addition, the Reader's Digest Sweepstakes is one of the best known sweepstakes events in the country. In fact, say employees, Reader's Digest is "primarily a direct marketing company" that uses its popular magazine to sell books and videotapes. In fact, the company derives most of its revenue from non-magazine functions. In the mid-1990's, the company fell on hard times. Efforts to expand its operations beyond its flagship magazine stumbled, and the readership of the Reader's Digest magazine remained flat at 27 million worldwide. Critics of the company pointed to poor marketing and a failure to replace its aging readership. In August 1997, the CEO of Reader's Digest, James P. Schadt, resigned after just three years in the top spot. Under his tenure, Reader's Digest stock price was in a free fall -- down 39 percent. Disappointing revenues have recently forced the company to scale back its operations to remain profitable. After divesting numerous unprofitable units, Reader's Digest has seen an increase in revenues and a return to profitability. A woman's place Former executive Bernadette Haley returned to Reader's Digest in June 1998 as the magazine's first female publisher. Under Haley, the magazine has undergone a facelift: the table of contents has moved to the inside of the magazine and there are more photographs to attract advertisers and younger readers. Persistent financial strain prompted new CEO Thomas Ryder to reorganize Readers Digest into four divisions: Global Books & Home Entertainment Group; U.S. Magazine Publishing Group; International Magazine Publishing Group; and QSP, a spin-off school and youth fund-raising business. Reader's Digest is also hoping to cash in on its greatest remaining asset -- its global name recognition. Expect RD-branded TV movies and miniseries in the near future. Expanding horizons In an effort to expand its sales Reader's Digest purchased marketer Books Are Fun for $380 million. The move gives the company a new means to reach readers by utilizing Books Are Fun's distribution network. Previously, Reader's Digest had to rely primarily on direct mailing to get its products out. Further initiatives to expand are underway, including a partnership with online health site WebMD and an agreement with Merck & Company to sell discounted prescription drugs on the Internet. The partnerships have not stopped there; Reader's Digest has aligned with Mastercard to offer Reader's Digest Platinum Mastercards to its subscribers. It also plans to offer insurance through a plan with Torchmark Corp and AIG, and has invested in Internet companies such as hardware.com. These new ventures, combined with expanding revenues and profits have made Reader's Digest an attractive takeover option. Current reports have media conglomerate Bertelsmann Group looking to buy the company in a $6 billion deal. It remains to be seen though whether a merger is in Reader's Digest future.
The Reader's Digest Association conducts its hiring through its Pleasantville, New York headquarters, where most job openings are located. The company considers only those resumes submitted for one of the openings that it has advertised in a newspaper or trade journal. Because of recent downsizing efforts, entry-level positions at the Reader's Digest Association are less frequently available than in the past. As far as working in finance or marketing an insider says, in lieu of experience, an MBA is usually what your competition will have. If you should get in, you'll still need the MBA to get ahead.
Deep divide There is a deep divide in the views that employees have of Reader's Digest. While some employees say that the "ideologically conservative" Readers Digest Association is "stuck in the past," many other employees refer to the company as "an American institution." The happiest employees are those that work on the Reader's Digest magazine -- "the most popular magazine on earth" - which they call a "heady experience." Those employees say that the "small-company," "family-oriented" atmosphere is "rare" in the publishing industry. "What's good for your family," chirps one insider, "will also be good for Reader's Digest." Big and beautiful In addition, contacts rave about the Reader's Digest "big, beautiful, college-like campus" headquarters in Pleasantville, New York. Says an insider: "The interior of the building is filled with hundreds of works of art from our corporate collection -- some of which are quite famous." Throughout the company, employees work from 40 to 50 hours a week with "higher-ups and newer, younger employees tending to work longer hours." Those working fewer hours are "employees who've been around for a long time." During the summer, many insiders take advantage of "half-day Fridays" to get a jumpstart on the beautiful weekends. Employees say the company gives "generous" salaries, and laud its "cafeteria" that boasts "great food" and "great prices." Profit sharing is a perk, "assuming we're making a profit, which we've had some trouble doing these past few years." In terms of the dress code, it's "business casual for the most part." A few qualms However, the employees who do not work for the magazine say that since Reader's Digest Association has fallen on 'tough times,' management has become "distant - and more concerned with numbers than with people." Some longtime employees are nostalgic for the old Reader's Digest, which they remember fondly as "a family-run business" with a "feeling of closeness." Now, they say, the publicly traded Reader's Digest is "simply there to make a buck." Laments an insider, "Two waves of layoffs have left the company in mourning." Finally, some complain that the company's atmosphere is filled with "lots of behind-the-back gossip." One insider comments "My immediate supervisors played the management game of favorites with perks and salaries. I was a loyal employee who thought everyone was being treated the same, but found out later that you were either in or out of their circle."
Human Resources
Hachette Filipacchi;Hearst; More Company Profiles For more career information, go to Vault.com ©2000, Vault.com Inc
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