People Inc, the publishing company formerly known as IAC, has announced it will not block Google from crawling its content "at the moment", despite a continued decline in referral traffic from the search giant. The decision comes as the company revealed a 2% dip in its second-quarter revenues, alongside a strategic acceleration of its digital subscription offerings.
CEO Neil Vogel had previously indicated to The Wall Street Journal last month that "blocking them entirely", referring to Google's content-crawling bots, was "100% on the table". However, in a recent clarification, Vogel stated that People Inc is "clearly not turning this off now. But it is a tool that we can use, and it is something we will constantly be looking at."
Google currently accounts for approximately 21% of all traffic to 19 of People Inc's core brands, a substantial decrease from its peak of roughly two-thirds. Speaking on an investor call on Tuesday, Vogel explained that "at the moment, the scale definitely tips in the favour of maintaining the status quo" due to the significant volume of traffic still originating from Google.
"But this is a trade-off we’ll monitor," Vogel added. "Now we’re not like galloping on a high horse trying to make a point here. What we’re really trying to do is just get to a fair economic deal for the use of our content. We will use all the tools at our disposal to do that. We’ll obviously be economically sensible in how we do that."
People Inc's desire extends to preventing Google from utilising its content in AI products such as AI Overviews and AI Mode, "just like we would to anybody else who doesn’t have a deal with us", according to Vogel. However, the current technical infrastructure presents a challenge: if the company were to block AI crawlers, it would also inadvertently block search crawlers, as Google has not yet separated these functions for US publishers, despite the UK’s Competition and Markets Authority instructing it to do so.
"So if we were to turn off AI, we would turn off search," Vogel noted. He acknowledged, "we are nearly out the other side of search being a material driver of value for us. But we’re not there yet."
Financially, People Inc reported total revenue of $416.7m for the second quarter, a 2% decrease year-on-year. Digital revenue, however, saw a 6% increase to $289.9m, while print revenue declined by 16% to $132.6m. Adjusted EBITDA rose by 5% to $73.3m.
The company’s digital revenue streams are diversifying, with 57% still reliant on website traffic and 43% derived from "non-session-based revenue". This latter category, which grew by 16%, includes events, subscriptions, and licensing, which alone saw a 23% increase in Q2. Licensing revenue encompasses AI deals, short-form content agreements with platforms like Netflix, and income from its AI-powered advertising targeting product, D/Cipher+.
Despite a 22% drop in sessions across People Inc's 19 most significant brands, sessions-based revenue saw only a 1% decline. Vogel attributed this resilience to "our iconic brands and best-in-class sales team, ad tech stack and ad performance continue to drive both direct sold and programmatic rate growth."
Chief financial officer Timothy Quinn elaborated on this trend, citing a "flight to quality" in the market. "There’s a decreasing supply of quality content on the web," Quinn said. "That which is quality is commanding a premium. We’ve always commanded a premium in the programmatic market. That premium has increased and is growing… While our sessions are down, our rates are up significantly."
In response to these market dynamics, People Inc is actively rolling out several new digital subscription products. Last month, Southern Living introduced its first paid membership offering, Southern Living Insiders. Benefits include exclusive access to 500 vintage online recipes, a special edition of the annual cookbook, a members-only newsletter, an additional print magazine, partner discounts, and early access and savings on events.
The MyRecipes app, which launched in June last year and aggregates over 100,000 recipes from across People Inc's brands, now boasts 4.5 million free registered users. A paid version, set to launch this month, will offer "elevated features the community has been asking for," Vogel confirmed.
Looking ahead, Vogel also teased an as-yet unnamed premium subscription bundle for the core People brand, slated for an October launch. This bundle is expected to feature exclusive content, special issues, games, app-only celebrity live chats, video series, and a range of other features. Vogel highlighted the company's aim to "creat[e] fresh new ways for our communities to connect with brands they love", leveraging the "subscription know-how" gained from People Inc’s existing ten million print subscriber base.
Events are also playing a "meaningful driver of revenue growth", according to Vogel. He cited upcoming initiatives such as the third Charleston Food & Wine Classic, the inaugural standalone Southern Living Tailgate event, and the recently acquired Austin food and music festival, Hot Luck. The company is also producing 47 original social series across its brands, including People’s Pop Take, which launched a year ago, designed to "resonate with both audiences and sponsor".
Separately during the earnings call, People Inc chairman Barry Diller appeared to confirm recent reports by Axios that the company is exploring a sale of The Daily Beast. The digital publication has become profitable, with its revenue up 53% in Q2 to $20m, building on a 36% growth in Q1.
Diller also mentioned Vivian Health, a healthcare career marketplace, stating: "These are small businesses and neither of them are core to us and neither of them will be part of us in the future. At what point, we can’t say, but we are as we said, and consistently have done so, we’re going to sell all of our noncore assets over time."
