Susan Lyne was a pillar of the old-media establishment. In the late 1970s she served as editor of the Village Voice, which snared a Pulitzer Prize during her tenure for a story on murdered Playboy centerfold Dorothy Stratten. In the '80s, she launched Premiere magazine, pioneering a new brand of Hollywood journalism. By the mid-'90s, she had moved on to the Disney conglomerate, where she ended up in 2002 as president of ABC Entertainment. She was forced out of the troubled network two years later but not before having greenlit such hits as Desperate Housewives and Lost. Lyne landed at Martha Stewart Living Omnimedia, running the troubled empire of domesticity while Martha served time in prison for charges related to alleged insider trading. Then, with rumors swirling that she was a top choice to head Time Inc. or Oprah's upstart cable network, Lyne abruptly changed directions. Rather than follow Tina Brown, who was launching TheDailyBeast.com, or Arianna Huffington into blogosphere, Lyne joined Gilt Groupe, a luxury e-commerce site. The site cultivates an air of exclusivity—there's currently a waiting list to become a member—and holds several online sales a day, featuring deeply discounted designer items such as a Vera Wang silk dress, which usually retails for $1,695 but was on sale at Gilt for $600. "After I left, I thought I was probably going to end up doing something more like what I had been doing," she says. "[But] I've moved on to a different platform." As her one-year anniversary approaches, Lyne sat down with NEWSWEEK's Johnnie L. Roberts in her office in Manhattan's Chelsea neighborhood, to talk about e-commerce, the battered luxury-goods market and media business she left behind. Excerpts:
Why Gilt Groupe? What's so compelling about it that you'd quit the media business?
Gilt is really next-generation e-commerce. What the e-commerce giants [Amazon, for example] really did was come in and replicate the store model online. Gilt is a very different animal. It's appointment shopping. We use the ability of the Internet to e-mail our members to get them all to come at one time and turn shopping into an event. There's a urgency involved in it that just can't exist off line. That comes in part because people know there is limited inventory and if they don't get there fast and make a decision to buy quickly then it's going to be gone. It's new every day. And there is an engagement level because you are competing against other players, right, to win whatever we're selling that day.
But don't you think the media business is going through some exciting times now, too?
The Internet is changing everything, and if I didn't understand both this new customer and understand what the Web enables that's different than what you can do on other platforms, then I'd be missing a great wave. What has really struck me over the years now is the fact that media companies have looked at the Internet as either a distraction, or in some cases a threat, but not as the giant opportunity that it is. It's challenging obviously because with the business models, the ability to monetize is not always evident. But you're never going to figure it out unless you dive in with real resources and real strategic forces and an excitement about what's possible. The best way to do that is to jump into an Internet company.
Tina Brown is doing just that at The Daily Beast with Barry Diller's backing. And there's Arianna Huffington's HuffingtonPost.com. Do you read them? Would you be pursuing something along those lines if you hadn't opted for Gilt Groupe?
I think those are both really interesting businesses. I read both. I'm on The Huffington Post a lot. Also because my daughter is there now. She's interning in the Washington office and filing six times a day. So yeah, I would absolutely be focused on such ventures if I were back in the media business.
What's the best of what they are doing? What doesn't grab you about what they are doing?
I think Tina's done something really smart with the stories you have to read today.
You mean the Cheat Sheet section?
Yes. It basically says, if you read anything, read these six or these 10 stories. If you want to be part of the conversation, read these stories. That is hugely valuable to people. We are inundated with information. I read the comments on The Huffington Post as much as I read the stories because it's that conversation. Again, that's what makes the conversation different. It's not a one-way medium, and what you do is set the table with a story, and let people go. And that is exciting. I think it has proved in an odd way one of the disses on the Internet wrong. The diss was that it was going to make people stupider because it essentially was culling things down to the lowest common denominator. But, in fact, if you read those conversations, they are informed, opinionated, and thoughtful.
Even at the startup Premiere magazine, you were working for an extension of a mammoth organization—Rupert Murdoch's media empire. Give me a sense of what's it like at a bona fide startup?
I'm hiring a team that can really scale up the business. Many took big pay cuts to come here, and they are doing it for many of the same reasons that I am—because there's a bigger opportunity when you're at a startup to have a bigger win at the end. But it's also because a startup is really fun. And a company that's growing this fast is really fun, and so if you've been working in a big corporation where things move at the pace of molasses, and it takes umpteen meetings with the strategic planning team to get something done, this is extremely liberating. So we have been able to attract phenomenal talent. When I started Premiere, we were part of a much larger company. We were a little band off to the side in unfinished office space trying to invent a magazine. And that was the last time—the early years of Premiere. Now, it's really fun working with a lot of 20- and 30-somethings. There's an optimism and a sense of the possible when you are working with people who are still fresh to business. That's infectious, and I love it.
The buzz around Gilt seems ubiquitous. What's Gilt's secret to publicity and marketing?
When you get a certain scale, that creates buzz. When I came to the company in September, we had 300,000-plus members. Now we have well over 1 million. And so as the company grows and as membership grows, the buzz grows. It's really a factor of just the hyper growth that Gilt is experiencing.
What have you had to learn?
I had to learn that everyday creates new opportunities and new challenges. There's not a day that goes by that something has to be fixed, built, or made better. This is a very fast-moving environment. I worked in a media business that felt fast—certainly network television, where everyday you are programming a lot of stuff. But very little of it is live. This is live entertainment everyday. And it is fresh, live entertainment everyday.
I note your frequent analogy to entertainment? Is that your media background sneaking through?
Yeah, absolutely. And it's also because our members expect more from us. They expect this not to be just a good shopping experience but to be fun. And so there is definitely an entertainment quotient in this mix. Everybody is really happy to buy great products at great prices, but there's definitely another level to this experience that on good days does feel like great live entertainment.
How much do you miss the media business?
I feel like I'm still very engaged in it because I have so many friends in the media. I don't feel like I've left it in that sense. And I'm a media junkie. I still watch tons of television, read three newspapers in the morning—real newspapers. I get a dozen magazines. I'm of a different generation, and I do feel like there is a divide. I see it with my kids. They consume an enormous amount of media, but they consume it online.
By the way, what about the answer to the second part of my question about The Daily Beast and The Huffington Post—what doesn't grab you about them?
What they don't do well? I think that what you generally don't get in Internet publications is the juxtaposition of stories. I think that's part of what good editors do is to figure out how they are going to create a front page or a feature well where things play off each other, and where there is a curator's eye that is really either letting you know that these stories are the most important to read. That is why reading The New York Times online is a totally different experience. I want to know what the editors think was the most important story of the day—and the six other stories that demand a front-page start. When I read Vanity Fair, I like to see what's the mix that [editor] Graydon Carter has put together. My favorite magazine right now is New York magazine. I think it has a true voice. You often don't get that in big news aggregation sites. You feel like there's a group of people [at New York magazine] sitting in a room together, and they are coming up with a take on what's happening in the city that is unique and smart and always makes you think. Because so much of the way we read Internet news is through search, you don't get that.
Do you buy the notion of "luxury shame"—that even people who can afford the sky-high prices of luxury are ashamed to make such purchases in this recession? Do you think that, given the deep discounting by high-end retailers like Saks, the days of outrageous prices for fashion are over?
No. I think that people think twice about whether something is genuinely worth what they are being charged. That's different. I think they are still spending money on things they think are worth the price. I think where they are thinking twice is that not everything that they are being charged $2,000 or $3,000 or $6,000 or $7,000 for is worth it. They are shopping more in other venues, and they are shopping in their closets and adding what they need.
Is this a permanent consumer behavioral change?
Never say never. It is definitely is something that I think will have a lasting impact. I think every retailer or designer is thinking about: how do I deliver products at a more affordable price point? Not all of them. But definitely an awful lot are recognizing that there are price points where someone says, "I'm not going there." I think it benefits Gilt. I think it benefits a lot of different companies. Clearly it benefits a company like J. Crew when you've got Michelle Obama mixing Jason Woo with good J. Crew. That sends a message to everybody else that I'm going to shop high-low, too. That's been a consistent theme I think for years now. I think that it's a fiercer belief at this point. And I think it will continue. One of the benefits of this period is that people are recognizing there are brands out there that do make very high-quality goods for far less money than they would be spending for some designer brands.
Is that a term of art: high-low?
Yes. You don't read fashion magazines, do you?
What was your last Gilt purchase?
A Vera Wang dress, a great dress that I wore to the Public Theater benefit last week. And a good friend of mine came up to me and said, "I have that dress." But she'd bought it at Bergdorf [Goodman]. But I wear a lot of Gilt. This is an unusual day. I don't have Gilt on. It's been very good for my clothes budget.
Do you have an inside track?
No. No. No. Nobody here can buy before the online sales.