Wednesday, December 2, 2020

Hodinkee - the Broadway Musical!

 Okay, I kid (a little at least).  For some of us this news actually dropped yesterday thanks to the intrepid reporting of Watch Pro out of the UK.  I woke up this AM with the intention of doing some, I  don't know, reporting only to find the post had been removed. Should you visit now, you will see the image and title of the original article, however when you click it, it simply reloads the main page. But I did read it, and you can read the archived page in other locations. One good article - "Whither HODINKEE?" can be read here -


So long story short, Hodinkee has garnered $40 million in funding.  For the more economically inclined of you I recommend he link above.  But for the brass tacks of it, from this guy's perspective it underscores the potential fragility of the model.  Because what this latest cash injection underscores is that maybe, just maybe, the HODINKEE model has not been as profitable as many may have thought.

After moving on from DOXA in 2010 I started Tempus Fugit and as a result was asked by brands to help enter/re-enter the North American market (Minase, Sartory-Billard, Lip, Raketa and others), and therefore I had a dual experience of trying to build relationships with brands to have content for Tempus Fugit, but also to reach out to other outlets to try and get editorial for the brands that I represented. And I learned very quickly that there is no such thing as a "free press" when it comes to watches. I mean that both metaphorically and literally.

As a brand if you are not one of the major independents or groups, they simply don't answer your emails. This is true whether you are the brand or the representative of the brand. Not unlike a university secret society, you need to know the secret handshake, or at least be particularly "chummy" with one of the shot-callers (that would be either Jack or Joe in most cases). Now curious to relate, I know Jack a bit, see him 2 to 3 times a year at press events and the "Fair Previously Known as BaselWorld", rode on a sailboat with him off Marble Head, and he is quite friendly and engaging in person. Now when Jack actually puts pen to paper (or fingertips to keyboard) he is an excellent writer. But when it comes to trying to get your watch onto his (or any other Dinks) wrist? Long story short, he and the folks at Hodinkee simply won't reply to emails, even repeated ones that cc the leadership. For what it's worth, this is the same approach used by the other watch news outlet that is based in NY and likes to sell stuff. And in fairness, it's their decision to make, whether or not I personally agree with it as a brand rep or member of the Fourth and Fifth Estates really does not matter. Now it is not fair to say that it is all about watches of a certain price point, because in truth, the "Dink" does cover a fair number of low-rent items. But again, it constantly begs the question - what is the actual criteria for editorial inclusion? In some instances it is quite obvious, and in others it has a truly unknowable complexity beset with its own rules and standards that are never shared with anyone outside of Dinky central.

And truthfully? For brands it is absolutely understandable why you may feel that if you make it to Hodinkee, your problems are solved. And in reality? Well, yes and no. ochs und junior appeared to have established a foot hold, and then slid back into the abyss. What seems clear upon reflection, is that the folks at ochs und junior at some point decided that the only outlet that REALLY mattered was Hodinkee. Well, other outlets took the hint and simply stopped covering them. Monochrome was an early adopter and cheerleader (as was I at Tempus Fugit), but if the Monochrome site is anything to go by, they haven't written another word since 2016. Fratello has 1 story that shows up on their archive. Quill & Pad - the most recent is 2016. But also curious to relate? The former darling that once provided a special Hodinkee Anniversary piece (which seems to have been scrubbed from the "memory banks" of Hodinkee's archives) has yet to show a "proof of life" since November 11, 2019 after showing up 4 times in 2016, 4 times in 2017, twice each in 2018 and 2019.


Now what does $40 million buy them?
Believe it or not, survival.

There are 58 people listed on the "Masthead" which is a bit confusing because a large number of those people work in the retail side. But the point is pretty simple - at least 10 of those people must be making over $100,000 per year. This is New York after all. That's 1 million right there and in truth I suspect that the pay rate is probably higher. Even if you low-balled the remainder, my hunch is there is a total payroll of at least 2 to 3 million per year. And that is before we add the new CEO and additional talent that they are trying to hire currently. Rent, utilities, travel (you don't always get a free ticket in Polaris Class to Tokyo), IT, insurance, benefits, etc. So it is safe to say that advertising alone is not going to cover that nut. It is also safe to say that you would have to sell A LOT of Oris and SWATCH watches and Leica cameras to do so. As most of you know, retail typically provides a 50% margin. So even if you sell a $50,000 watch, that is in fact typically only $25,000 that you the retailer will see. Now it is possible that Hodinkee does what some other dealers and outlets do and tack on a "premium listing fee" in addition to the 50% they are receiving. So even if they don't make money on selling the watch, the brand pays them an additional amount for it to be in their store space - say an additional 5% or so. For the brand, they view this as a marketing expense.

Oh, one other thing - this is not the first time Hodinkee has sought investment. In other words, those investors are expecting to get their taste as well. So suddenly $40 million doesn't sound like all that much money.

Now if you follow these things like I do, you will notice that there have been 2 outlets that have tried to follow and others that have tried and thrown in their hands. The greatest challenge is and will continue to be advertising - be it the traditional or the vaguely titled advertorial or "editorial package". Whereas watch media and its support from brands was previously seemingly limitless, it has now truly become a pie, and there are fewer and fewer slices of it to go around.

So it will be curious to see how all of this evolves -

HODINKEE - the Broadway Musical:
"It's a sexy-vaudeville thing, about watches, but with a heart".

HODINKEE - the NBC Mini Series Event:
"Three generations of watch journalists and salespeople vie for their father's attention in this sweeping drama spanning 30 years, 4 continents and 8 countries. Share their triumphs, their defeats, their loves lost and won as they battle to win not just the love of a gruff but beloved patriarch, but also the hearts and minds of the world of watch fans."
Staring James Brolin, Connie Sellecca, Jane Seymour and Jan-Michael Vincent. Special Guest Star Robert Mitchum. Check your local listing for times.

Well I guess we'll all have to wait and see ; )

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