Business

Capital injection: Watch publisher Hodinkee rakes in $453K in revenue in just two hours.

For  Hodinkee, Q4 2016 could not be off to a better start. As legacy media properties (the NYT and WSJ among them) struggle to cover heavy losses and fumble along in an online media environment where ad revenues, attention, and leverage are hoarded by Facebook and Google, Ben Clymer’s operation is chugging along in spectacular fashion — just in time for the holiday season.

That things are going well for Hodinkee is neither surprising nor unusual. Over the last few years the publisher has been on an upward trajectory. Their readership is rabid, vocal, and loyal. The site has almost single-handedly sparked a mechanical watch revival, and as its beacon, Hodinkee has helped to define that movement. In June 2015, it merged with watch news app, Watchville, and installed a new CEO, Kevin Rose, the founder of Digg. That move coincided with a $3,600,000 raise from a series of investors including True Ventures and Google Ventures.

Together, the grand total for Hodinkee was a considerable $453,500, and no doubt with decent margins to boot.

Meanwhile, Mr. Clymer, Mr. Rose, and the team have moved into a swanky new loft space in Soho, and have added to their staff. October and November have simply seen them crank up the volume a bit, and with two outstanding and thoughtful wristwatch collaborations, they may now truly be hitting their stride.

The first of these Q4 collaborations, which arrived last month, was the Zenith El Primero Original Limited Edition chronograph. This one hit all the right notes: A “traditional Swiss old-guard” manufacture in Zenith, that represented several musts for Hodinkee, including “technical innovation, thoughtful design, respect for one’s history, and great value.”

It was, the publisher explained, an easy decision. In Zenith and its El Primero movement Hodinkee found the perfect blend of time-tested appeal and general adoration among watch lovers. “The El Primero movement is one of the longest produced and most highly regarded chronograph calibers in the world, and is a legend in itself,” Hodinkee wrote, “so we thought, ‘Wouldn’t it be wonderful to create a watch designed with vintage watch lovers in mind, but made today?’” At a price of $7,900 and limited to 25 pieces, the Zenith brought in $197,500.

Then, last Thursday, the second collaboration, the Nomos Glasshütte Metro Chronometer, was announced. Based in Germany, Nomos is a newer watch company that specializes in modernist minimalism, rather than vintage appeal or ornateness, and is highly regarded by watch collectors. Its Metro watch is a popular model. Hodinkee once again explained this collaboration as a no-brainer (and tweaked a few things along the way).

It’s very possible (given the fact that they have serious backers now) that this is becomes a revenue channel Hodinkee will be using with more regularity.

The goal “was to take the essence of the Metro’s design and NOMOS’s status as a true in-house manufacture and to create the purest expression of the Metro yet. Everything you want, nothing you don’t,” Hodinkee explained. “The result is a hand-wound German chronometer with just hours, minutes, and seconds (no date or power reserve here) and a closed caseback, presented at incredible value.” The Nomos collaboration brought in even more than the Zenith. Priced at an approachable $2,560 and capped at 100 pieces, it rung in a cool $256,000.

Impressively, both releases sold out completely in just one hour after their announcements. Together, the grand total for Hodinkee was a considerable $453,500, and no doubt with decent margins to boot.

It’s a sum that would make even the New York Times breathe a little easier, given their recent revenue fluctuations — and in some way might even help to explain the thinking behind their purchase of The Wirecutter last month. (Advertising for news publishers is plummeting; the future is in physical products and in facilitating connections — affiliate links, events, co-branded product collaborations, for example.)

For a team the size of Hodinkee, with 15 full-time staff members, though, this is a substantial windfall. And it’s not the first time the site has done collaborations like these, either. A year ago in October 2015, its first experiment — a collaboration with German independent maker Max Büsser and Friends (MB&F), limited to just ten pieces priced between $52,000 and $65,000 — sold out in five hours.

Specialist publishers find it easier to engage in small revenue builders of this kind. But that doesn’t make what Hodinkee has done this quarter any less impressive. There’s always the risk of choosing the wrong product, or adding a flourish or feature that kills the allure. And for a fiercely discerning audience like Hodinkee’s, this a very real threat. But Mr. Clymer and team have smartly navigated around these dangers, and several elements have made these projects superb successes.

First, these collaborations fail if Hodinkee doesn’t know its core audience like the back of its hand. For them, this means the products themselves must be well-conceived and made unique with just a few key tweaks, but they should also fundamentally be products that readers would cherish. Zenith and Nomos are both names that are highly respected by Hodinkee loyalists, and for good reason.

Both watches are reasonably priced, too, in the sub-$10,000 region — though pricing is less of a constraint given their first collaboration with MB&F. Still, Hodinkee is shattering any lingering notions that pricey luxury timepieces like these won’t sell online if shoppers haven’t seen them in person first. Hodinkee has offered up full feature wristwatches here, not accessories like bags or watch straps. These products would find themselves perfectly at home at a high-end boutique, but they just so happen to be sold online at Hodinkee.

Lastly, there were no previews or pre-launch announcements made with these collaborations. Each release became a gift-wrapped surprise for readers. The lack of a pre-order period also meant that they would be limited in availability — first come first serve — which makes these watches all the more special. The result: Hodinkee readers — for all three collaborations, and for these last two especially — attack like starving piranhas.

Mr. Clymer and team are making smart plays here. And after testing out the waters a year ago with a single release, they’ve released two new products in the last month. Given this increase in activity, it’s very possible (given the fact that they have serious backers to repay now) that this is becomes a revenue channel Hodinkee will be using with more regularity.

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