I recently had dinner at Mar a Lago with Newsmax founder Chris Ruddy. Having worked in media for as long as I did gives me a great appreciation for Chris’ spectacular accomplishments building his business from scratch. Ruddy started Newsmax with an initial investment of $25,000 and today the business does in excess of $100M in annual revenue. Newsmax is quite profitable and growing a rare achievement in diversified media platforms.
We discussed business, his friendship with Donald Trump and what Forbes readers need to do to be successful entrepreneurs.
Ruddy: In the 1990s I was a journalist for the Pittsburgh Tribune review covering the Clinton White House. It was then the power of the Internet as a media platform really took off. Many of my stories were picked up on outlets like the Drudgereport. In the old days your news story had to be covered by the New York Times, Washington Post or the Associated Press to get any national traction.
The Internet did away with those gatekeepers. I also saw the success of Fox News, which was speaking to an audience of middle America not served by most of the major media.
Forbes: You recently launched Newsmax Television please tell us about that?
Ruddy: Newsmax TV was launched about three years ago as a 24/7 linear cable and OTT channel. It’s a natural progression from our digital media operations. More and more the Internet is becoming a video and streaming television platform. We wanted to stake out ground early. We are carried in about 10 million U.S. homes, but believe we’ve made a lot of progress. The years ahead will not be good for traditional broadcasters or even paid cable operators. Our business model for Newsmax TV will do well as that transformation takes place.
You have a close relationship with President Trump what can you share about this?
Ruddy: Well I met Donald Trump about 20 years ago and I have known him fairly well for about 10 years. Remember he has a home down here in Florida near mine and near my company. For years I would see him during the winter almost every week, and off-season I would see him in New York. I was with him when he opened his club in Scotland, the most impressive golf club I have ever seen.
The most remarkable thing about Donald Trump is actually his humility. I realize some people might find that hard to believe, but at times he can be incredibly humble. I think this has been an important part of his success, and how he, despite being a billionaire, can relate to the “average Joe” or “average Jane.”
He was raised in Queens, to a wealthy family. I was raised a few miles away in a middle-class family. My Dad was a police officer. I think I understand him better than most.He is very driven by performance and results. He was successful in show business. Who else do you know had a hit network TV show for almost 15 years? So, there’s a bit of theater in his public persona.
But always look to what he actually does. He is laser-focused on results for the country. He really wants to improve the job situation here. That’s his number one priority, domestically. He is a very determined man. Perhaps the most determined I have ever met. I think he will succeed here.
Forbes: You are headquartered in Florida which is unusual for a national media organization how has this worked in terms of attracting talent?
Ruddy: We have not had a problem, we have about 225 employees. This is a fairly big market with about 6 million people living within an hour of our Boca Raton headquarters. People love living in Florida. It always attracts good talent with its lifestyle, picture-perfect weather, and its low tax environment. We have had average annual revenue growth rates of 35 percent for over 15 years. We did that in Florida. We also have an office in New York and attract some terrific talent there.
Forbes: You have been able to deliver information to a underserved conservative audience how do you see this evolving as we go forward?
Ruddy: People think of Newsmax as “conservative” but we actually focus on a demographic of 50-plus Americans, baby boomers and older. Comscore says more Democrats read us monthly than Republicans. This 50-plus group is the largest demographic group in the nation with the highest disposable income. One statistic says that this group controls 70 percent of the disposable income of the nation. This is huge. Too much of the media focuses on millennials and forgets about the people with all the buying power. Rupert Murdoch had a brilliant idea creating Fox News. It’s the number one cable channel and makes billions in revenue just by serving this audience. Approximately 80 percent of our business is actually focused on health and financial information. We cover politics, it’s important to me and to the country. We also like to have a diversity of political opinions, liberals and conservatives. We really see ourselves as “independent.”
Miguel Forbes: What has been the secret of your success and what would you say to Forbes readers that are considering starting a business in a competitive field like media?
Ruddy: The secret is real simple: ignore what everyone else is doing and stick to core approaches and focus on revenue. I can count hundreds of times people told me to refocus my business on millennials, for example. Myspace controlled the under 30 market and went broke serving them. Meanwhile Facebook only started making big money when grandma started using it. You still hear all this talk about web traffic. We love web traffic but we want qualified traffic of core readers who are responsive to our advertisers and to the products that we offer. We are also very database focused as opposed to just simply looking for web traffic. We have over 6 million email subscriptions, and close to 700,000 paid subscribers. I was there near the beginning of the dotcom boom and I thought people would learn from the mistakes made. But they didn’t. The latest craze is the social media thing. Take, for example, Fox News which for years told its audience to sign up for Facebook. Now, the Fox News page on Facebook has 14 million followers. What does Fox get for it? Nothing. It’s actually good for me as a marketer. Fox News neatly aggregated its audience on Facebook so marketers like myself can reach it 14 million core viewers who are online. Meanwhile Fox doesn’t get a dime.
Now everybody is giving their video content for free to Facebook and boasting, “hey we just got a million views” on this clip. Great, but who makes the money from that video? Just Facebook. It’s insane. Back to my original point. Avoid the crowd. Focus on your own revenues. That’s all that matters.