October 18 was the laydown date for Zagat Survey's 2005 New York City Restaurant Guide, the flagship publication for a company that will publish more than 60 leisure guides this year. The new edition is likely to sell more than 650,000 copies over the next year, said company cofounder and CEO Tim Zagat. But as popular as the guide is, Zagat notes that the company has expanded well beyond publishing restaurant guides for just the New York metropolitan area.
Fueled by an infusion of $31 million in venture capital funds in 1999, Zagat has been steadily investing in new systems and new talent. A new content management system makes it much easier for the company to "slice and dice our database" to create a variety of products, Zagat said, and the company rates such things as music, shopping, golf courses, movies and nightlife. "Our mission is to gather information from avid people, codify it, edit it in bite-size bits" and put it in indexes, Zagat said.
The flexibility of its database has resulted in a rapid growth in Zagat's private label business, which centers around the creation of custom publications, mainly for corporations. The largest run in Zagat history, Zagat noted, was in 2003 when the publisher did a five-million-copy custom publication. Zagat will produce 40 to 50 private-label products this year, and custom publishing is the largest and most profitable part of the Zagat business. "Long print runs and no returns," Zagat noted.
But even though Zagat Survey derives more of its sales from its custom business than from the book trade, Tim Zagat views bookstores as vital to the success of his business. "Bookstores provide us with exposure," he explained, adding that he thinks there is lots of room for Zagat to grow in the retail market. That is one reason Zagat hired former Harcourt sales executive David Nelson this spring. Nelson said that while Zagat is strong on both coasts, it doesn't do that well in the Midwest. One way Nelson hopes to improve Zagat's penetration in middle America is to get into more regional chains, both inside and outside the book market. And Tim Zagat said the company is considering making some books available in trim sizes that will fit into the racks at mass merchandisers, including Wal-Mart.
The Internet is also a growing marketing channel for Zagat. The centerpiece of the Web site, zagat.com, is a $19.95 annual subscription service that provides members with online reviews, new restaurant openings and discounted books. All voting is also now handled online. "The Internet is a big part of what we do," Tim Zagat said.
More expansion is set for 2005, including the addition of more cities to its surveys as well as a move into a new country. "We hope to do some surveys in China next year," Tim Zagat said.
