Moses Znaimer’s New Mission

With the Zoomer brand, TV revolutionary Moses Znaimer is making his most innovative play yet — so innovative, in fact, that the flock is having trouble catching on

By David Hayes, Report on Business Magazine, September, 2009

The voice behind the curtain has a question. He’s anxious to hear what the speaker at the podium, a sleep expert, has to say, the questioner says, because he went to bed at 3 a.m. and was up around 7. That’s just part of his lifestyle, he adds, since he spends time with celebrities and rock musicians. Several mature heads turn, eyebrows raised, expressions bemused. In the row ahead, a silver-haired gentleman turns to the woman beside him and shrugs.

The boast gets such a reaction because, after all, the topic at hand is Being Old. This is the beginning of the Aspirin∏81mg CARP conference-“On a New Vision of Aging.” The guest speakers include a surgeon forecasting the future of hip replacements and an expert reporting on glaucoma and cataract treatments. The audience looks predominantly 60-plus-the name CARP, after all, is derived from Canadian Association of Retired Persons.

When the sleep expert, Michael Breus, is finished with his presentation, the man behind the disembodied voice, the host of today’s event, emerges from behind the curtain. And there is Moses Znaimer, smiling his knowing smile.
Somehow, the least retiring man in Canada has got his hands on a retiree lobby group. The onetime youth-culture maven, credited with revolutionizing television with CITY-TV and its offshoots, has, as he puts it, followed the boomers into middle age. His chosen vehicle is CARP, which is yoked to Znaimer’s Zoomer brand (that’s “boomers with zip!”) and the public company
ZoomerMedia Ltd. The binding idea is that aging ain’t what it used to be.

For Znaimer, 67, the venture seems to represent a Hefneresque quest for eternal mojo-the magical, sexy power he’s famous for: media visionary, wheeler-dealer. The Zoomer empire is still aborning, with a distinct crazy-quilt facet, but it does have its believers. Most notably, Prem Watsa’s Fairfax Financial Holdings Ltd. bought a 28% stake in ZoomerMedia for $17.6 million last summer. That injection allowed Znaimer to add the personal touchstone of TV stations to his eccentric conglomerate: He bought the spiritual specialty-channel VisionTV. Fairfax legal counsel Paul Rivett said of the deal: “We believe in the model but we also believe it’s a good opportunity to partner with a guy who still has a few good ideas left in him.”

That backhanded compliment is of a piece with many aspects of the Zoomer brand. As a business concept, everything almost, but not quite, adds up-just as, on a personal level, it seems odd for Znaimer to seek the fountain of youth in the market for aging. Is Moses looking for his mojo because, like Austin Powers, he’s lost it?

***

Even before Znaimer helped reinvent youth-oriented TV with CITY, MuchMusic and Fashion Television, he earned wunderkind laurels at the CBC, co-creating Canada’s first national phone-in radio show, Cross Country Checkup, and working on TV talk show Take 30 with Adrienne Clarkson. But not even Znaimer could stay on the cutting edge forever: His long reign at CITY came to an end in 2003 after he found himself on the wrong side of a generational changing of the guard at CITY’s parent company, CHUM.

Znaimer had done well selling his share of CITY years before and, at the time of his departure, he was CHUM’s highest-paid executive. In 2002, he earned nearly $1.6 million, including about $800,000 in fees paid to Olympus Management Ltd., his private company. The actual details of his departure, including the financial ones, have remained obscure. But between share sales and severance, Znaimer found himself capitalized in a way he’d never been before. With a non-compete agreement preventing him from working in broadcasting for several years, he turned to a novel line of work: In 2004, he and fashion retailer Joseph Mimran became investors in Cannasat Therapeutics Inc., a medical marijuana specialist.

Side businesses were nothing new to Znaimer. Over the years, he’d put his stamp on a unique and well-travelled play (Tamara), an unusual ride at the CN Tower (Tour of the Universe), and the still-thriving annual ideaCity conference. Among these and other activities, there have been some critical successes, but nothing to retire on. Once the non-compete expired in 2006, Znaimer was bound to return to his first love. “I’m rather an artiste of media,” Znaimer once said. “I take a little offence when people call me a businessman. The businessmen think I’m an artist and the artists think I’m a businessman. You live in that crack and you bind those worlds together. …It’s pretty risky, but the rewards can be very lucrative.”

The first leg in Znaimer’s new theme company was erected in August, 2006, when the Canadian Radio-television and Telecommunications Commission approved his $12-million takeover of Toronto radio station Classical 96.3 FM. (In a typical display of egomania-or branding, if you like-Znaimer later altered the station’s call letters from CFMX to CFMZ.) The station’s listenership had placed it among the top six in Toronto’s crowded radio market, earning it a stable of loyal advertisers. Nevertheless, Znaimer tried to convince the CRTC that CFMX was unprofitable, and thus he should be excused from paying the required 6% of the transaction value to develop Canadian talent. The regulator disagreed, so Znaimer had to ante up an additional $720,000.

True to the in-the-moment style that he perfected at CITY-TV, Znaimer invited crowds to the radio station for live shows and announced that attractive young people would report on classical and other arts-related events. He hired his sister, journalist Libby Znaimer, to host The Zoomer Report. And, as usual, the man and the brand were indistinguishable. Ads featured Znaimer’s face peering out from a bubble bath. To potential advertisers, the Zoomer concept was explained by another picture of Znaimer, with captions pointing to various parts of his body: “Body of a 65-year-old”; “Mind of a 45-year-old”; “Libido of a 25-year-old”; “Heart of a teenager.” (One veteran CITY manager sniped: “It should read, ‘Body of a 65-year-old, mind of a teenager.'”)

About a year after the Classical 96.3 deal, Znaimer bought “oldies” station AM 740. With a clear, 50,000-watt signal, it reaches an older boomer audience of half a million, from Thunder Bay to the Carolinas. The price: $7.3 million, plus the required 6%. But Znaimer was just getting started. The intended keystone of the business was a non-profit organization that he had been quietly stalking for nearly two years.

***

Back in the early eighties, the Canadian Association of Retired Persons was a moribund not-for-profit modelled after the American Association of Retired Persons (AARP). Convinced that Canada’s seniors needed a proper voice, a high-energy woman named Lillian Morgenthau took over CARP and appointed her husband, Murray, as executive director. The Morgenthaus built CARP into a lobby group noted for Lillian Morgenthau’s effectiveness as an advocate for causes such as pension reform. Membership peaked at around 400,000.

As grassroots organizations are apt to do, CARP outgrew its kitchen-table origins. A key benefit of membership was access to preferential rates on insurance, extended health coverage and the like. By the late eighties, the Morgenthaus needed to separate their not-for-profit advocacy activities from any commercial (and therefore taxable) ventures, such as the discounts programs. Thus they created two private companies, with their four children serving as shareholders: Megadak Enterprises Inc. became a marketing agency that developed the member benefits and services program, while Kemur Publishing Co. Ltd. was responsible for CARP magazine. Both companies paid royalties to CARP on the business generated by their association with it. A third, publicly traded, company, Fifty-Plus.Net International, was launched later to house CARP’s Internet business.

“One of the beautiful things about the Internet is that the margins are so high,” says Eric Vengroff, a son-in-law of the Morgenthaus who was president of Fifty-Plus and who is now general manager at the Znaimer incarnation of CARP as well as executive vice-president of ZoomerMedia. “We went after some of CARP magazine’s regular advertisers who were underserved on the Internet and brought them good results with our e-newsletters and online ad campaigns. We were bringing in advertising at roughly 30 cents a page and paying a dime for it. A very simple mathematical progression to being profitable.”

In 2006, Vengroff and his Fifty-Plus colleague David Cravit, a former adman, met with Znaimer over a meal of Peking duck. “I felt if I could hitch the wagon to that star, it would be a good move for the company,” says Vengroff.

But some hurdles had to be cleared, especially with a third party: Lombard Canada Ltd., a major investor in Kemur, and also CARP’s most important partner. Lombard is a subsidiary of Northbridge Financial Corp., the largest commercial property and casualty insurance group in Canada. Because Northbridge is, in turn, owned by Fairfax Financial, it was at this point that Znaimer’s Zoomer mission showed up on Prem Watsa’s radar.

Risk-averse by nature, Lombard had been unnerved by CARP’s declining membership numbers, and wasn’t comfortable with the prospect of a Znaimer takeover unless the Morgenthaus were on board. The Morgenthaus, however, had become wary of would-be investors who were more interested in making a buck than serving seniors. “I don’t think they were all that familiar with Moses, so they were leery, skeptical,” says Vengroff. Still, they were in their 80s; the future of CARP had to be entrusted to someone before the membership seepage became critical.

By the summer of 2008, the hand­over was completed. In a complex deal involving a reverse takeover, Znaimer put up $13.1 million for controlling interests in Kemur and Fifty-Plus. The companies were folded into ZoomerMedia Ltd., which began trading under that name on the TSX Venture Exchange in July, albeit with Znaimer owning 78% of the shares. Megadak, the third CARP company, carried on as the Morgenthaus’ private company.
Since CARP itself is a non-profit, however, Znaimer couldn’t buy it outright. The board installed him as executive director and, later, president. “There’s a linkage but there’s no linkage” is how Vengroff describes the relationship of ZoomerMedia and CARP. In any case, the latter’s 2008 revenues were $2.2 million, of which about 74% came from membership fees. (In May, Znaimer raised the annual fee, including the magazine, from $19.95 to $34.95.)

Znaimer hired Susan Eng, a high-profile tax lawyer and community activist, as head of CARP’s advocacy activities, succeeding Lillian Morgenthau, who retired. He also patched up CARP’s relations with Lombard Canada, which remains the principal provider of insurance services to CARP members, an arrangement that accounts, through royalties and advertising, for about 25% of ZoomerMedia’s revenues.

But elsewhere, the new ownership spelled change, and specifically a determination to monetize the Zoomer idea on every possible platform. Znaimer transformed CARP magazine into the glossy, showbizzy Zoomer, under the editorship of the glamorous Suzanne Boyd, 46, whose background is in fashion publishing. Meanwhile, Zoomer.ca set itself up as a sort of Facebook with wrinkles, augmented by a co-branded partnership with Lavalife Prime, the dating site for singles over 45. And last year’s inaugural ZoomerShow drew 150 vendors and 15,000 people to Toronto’s Exhibition Place.

How big is this empire? Not very. On the media side, for the quarter ended last March 31 (that is, before the VisionTV deal), ZoomerMedia reported revenues of $2.2 million and a net loss after tax of $1.1 million. The shares have been trading for about 11 cents, although they briefly doubled when Watsa invested last summer. For Znaimer, $17.6 million is a major cash infusion, but for Fairfax, it’s so small it’s almost a rounding error. Znaimer will end up owning 66% of ZoomerMedia, and Fairfax 28%. (Fairfax, famous for savvy investments in distressed companies, has a larger media play, albeit one without the insurance symbiosis of the ZoomerMedia investment, in the form of recent purchases of shares in CanWest Global Communications Corp. and Torstar Corp.)

The VisionTV deal, critically, allows Znaimer to get back into TV. Because Vision is on basic cable, it guarantees access to more than nine million Canadian homes. Apart from VisionTV, the acquisition includes a share in the digital channel One (“the Body, Mind & Spirit channel”) and conventional TV stations in Vancouver and Winnipeg with an explicit Christian bent. The question now is how easily Znaimer can Zoomerize a broadcaster that, while boasting an older audience, also has a regulatory commitment to being “Canada’s Multifaith, Multicultural Television Network.”

How big could all this get? Even putting aside TV, it’s hard to analogize directly with CARP’s U.S. equivalent. But it’s still revealing. AARP, a non-profit with 40 million members and 2,400 employees, takes in annual revenues of more than $1 billion (U.S.) from membership dues ($16 annually) and the royalties it receives from the many goods and services it endorses and the ad space it sells in its magazine and on its websites. CARP says that its membership has climbed back to 350,000, approaching the peak of the Morgenthau era. Applying the 10-to-1 rule of thumb suggests CARP could have four million members, although the lack of universal health care probably boosts membership south of the border. So Znaimer has launched “March to a Million.” Privately, he believes two million is possible.

***

Moses Znaimer is one busy senior, I realize, as four or five interview dates come and go without being consummated. When I finally get into the offices of ZoomerMedia, the oldest person I encounter is 50-year-old Ziggy Lorenc, the effervescent former CITY receptionist who became a TV host and is, today, both Znaimer’s receptionist and a host of Stardust, a late-night show on AM 740. There’s nary a boomer in sight among the rest of the staff.

Znaimer is nursing a cold. His body has thickened since his heyday and what’s left of his hair is pulled into a stringy ponytail. But he still speaks in his familiar soft, hypnotic drone. He’s courteous in a curiously old-world kind of way. Only the eyes give him away. If you’re an attractive woman, any age, they glitter with the promise of opportunity. For the rest of us, they coldly evaluate the circumstances, determining what role the visitor serves for him and if, or for how long, he’ll play along.

He explains, first of all, that the aging boomer market is not a new obsession for him. “I noticed it way back when I launched MuchMusic,” he says. “That’s why Much begat MuchMoreMusic. I was constantly aware that my audience was aging year after year.

“CARP had acquired a reputation for being the organization you join a year or two before you die,” he continues. “So that became the challenge. How do I revitalize the advocacy, refine the benefits and bring in new ones, revitalize a moribund chapter structure and reposition it so that younger people would become members? ‘Younger’ meaning in the 45- to 60-year-old range rather than 65-plus.

“That’s where the word came in,” he says. “I first coined the word ‘Zoomer’ in the late nineties and applied for a channel called Zoomer in 2000.”
The whole Zoomer vision makes sense until you parse the premise a bit. Are boomers an underserved demographic? Znaimer argues the point-maintaining that only 5% of ad spending is directed toward people over 50-so vociferously that he has managed to rub the ad industry the wrong way.
Last year, Marketing, the Canadian industry’s trade paper, named Znaimer one of the top 10 media icons of the past century. A simple thank you would have sufficed, but instead Znaimer took out a full-page ad that lambasted the industry for ignoring boomers: “Why aren’t the deans of our industry showing leadership here? They’re Zoomers themselves. They know who’s in charge. How can they be so alienated from their own experience that they continue to blow their clients’ money chasing a so-called youth market…?”
According to several senior advertising executives whom Znaimer visited when pitching the Zoomer concept, he was equally peremptory in person. Says one, “He’s so full of himself, he had trouble fitting his head through the office door.”

When I mentioned these reactions to Znaimer, he was unrepentant: “They’re always sucking up to me and asking me to come and speak to them because they need to hear the truth. That’s the hypocrisy of the ad business. …If I paid attention to it, I’d have slashed my wrists years ago. So they’re angry at me? Tell me something new.”

Whether Znaimer can reverse it or not (and, also, whether in the end it matters or not), it is true that the young talent that dominates the ad business often holds outdated assumptions about people over 50-that they are unadventurous, unwilling to try new brands and, as they prepare for retirement, less willing to spend. Although there was truth to that stereotype for an earlier generation, study after study disputes it today. And senior people in the ad business know their bread is buttered by boomers. “It feels to me like Mr. Znaimer is doing a bit of self-serving chain-rattling,” says Maxine Thomas, planning director at Taxi Canada Inc. “Boomers are the most targeted demographic in history.” And it’s not over yet: Busily embarking on new careers, pastimes and relationships, the boomers will be the youngest-acting seniors ever. They will be hard to ignore.

Mind you, a little bit of fluidity about generational definitions would certainly help at Zoomer magazine. “The positioning of the magazine is that it’s serving this high-end boomer target group of 45- to 65-year-olds,” says one media buyer, “when, in fact, as much or more of the circulation is going to people over 65.” While that makes Zoomer a natural for pharmaceutical, insurance and financial services industries, it’s not the spectrum of luxury and lifestyle advertisers Znaimer wants. And the flip side of the problem is that he’s giving dues-paying CARP members a magazine that seems directed at a different generation. “I looked at Zoomer and felt like I was back reading 16 Magazine when I was a kid,” says a boomer-aged woman who works with seniors. “When I go to grassroots meetings with seniors, people aren’t dressed like that and they’re not looking for the best makeup and clothes. They’re trying to keep the Canada Pension Plan intact, make sure personal life savings aren’t wiped out, improve the quality of life for those in nursing homes.”

People in the Zoomer loop say Znaimer has no qualms about shedding older readers in favour of the younger end of the boomer market. But officially, he needn’t. “Here’s my little ace-in-the-hole,” Znaimer says. The pitch to potential subscribers goes like this: “It can be about yourself, but it’s not just about yourself. Forty-year-old people have 65-year-old parents, and 30-year-old people have 80-, 85-year-old grandparents. So whether you buy Zoomer for yourself or for someone you love or for someone you’re damn well going to be responsible for, this information should be of interest to you. That’s the big idea. It’s not a simple message, but when I articulate it one-on-one to people, they always agree.”

A big idea it may be, but it also flies in the face of research about who people buy magazines for: themselves. “It’s all very well that he can explain it one-on-one, but unless he wants to do that half a million times…,” says magazine consultant D.B. Scott. “The general view is that people buy and read magazines they trust and to which they relate, and advertisers want to buy exposure for their messages in that kind of editorial environment. If Znaimer has found a way to repeal that law, good luck to him.”

***

Can a non-partisan, not-for-profit organization with a mandate to advocate on behalf of seniors remain impartial when it’s closely aligned with businesses selling said seniors goods and services, some of them subject to regulatory scrutiny?

A BusinessWeek analysis last year concluded that while some AARP-branded services were offered at prices lower than those of competitors, others could be beaten by shopping around. And critics have asked how AARP can participate in debates about cuts to pensioners’ benefits or remaking Medicare when it makes hundreds of millions of dollars endorsing and entering into co-branding agreements with businesses that have a stake in the outcome.

And in Canada? “What I’ve found with CARP is that it’s difficult for them to take positions that are contrary to the interests of those that advertise, or provide multimillion-dollar marketing fees, through the for-profit entities,” says Diane Urquhart, an independent financial analyst who often does pro bono work on behalf of seniors’ associations. (CARP is not the only seniors’ lobby in Canada. Urquhart’s preference is for “grassroots seniors’ groups that draw from volunteers with altruistic reasons for being there.”) One previous relationship of CARP’s she has singled out was with Investment Planning Counsel, a wealth management firm ultimately con­trolled by one of Canada’s largest companies, Power Corp. CARP endorsed IPC, which offered discounts to CARP members. For all the business it landed in this way, IPC paid royalties. “The amount of supplier royalties is not publicly disclosed, although a portion of them is paid to the non-profit CARP to fund its activities, including government policy advocacy,” Urquhart said in a 2007 report prepared for the House of Commons Standing Committee of Finance.

The criticism is echoed by Al Rosen, a forensic accountant. “There is a secrecy element in much of what CARP does. It’s very difficult to tell whether it’s an arm’s-length, objective opinion or whether it’s potentially tainted by a too-cozy relationship,” Rosen says. “It’s essential to know whether you’re getting independent advice.”

Shopping for auto insurance on CARP’s website, I couldn’t find any disclaimers about the slice CARP or its affiliates get when its members buy the services it promotes. The publicly released documents of both CARP and ZoomerMedia are cryptic on this subject, noting lump sum amounts for royalties, without a breakdown. But if the monetary arrangements among CARP, ZoomerMedia, Lombard and the Morgenthaus are complex, Znaimer does put one thing simply in a note accompanying CARP’s 2008 financial statement: ZoomerMedia will subsidize CARP’s operations.

Znaimer says he has acted as the new broom as far as the partnerships are concerned. “I said, let’s evaluate all these things. We fired a few of the providers this year. I was the first guy to do that. The criteria remain the same. Is it a product that has been developed with our demo in mind? Is it from a reputable firm? Is it being offered for at least a fair price, preferably an advantageous one? If it meets these criteria, you can speak to our members and we’ll get a bit of a royalty out of that.”

On the specifics of royalty arrangements, Znaimer is vague. About the Zoomer presence at Lavalife Prime, he says: “These sites charge a fair chunk of change-you’re talking about 30 bucks a month. A typical signee stays in between four to six months. If they’ve succeeded, they don’t need you any more, and if they haven’t, they lose heart. But five times 30 is 150 bucks and we get a big chunk of that.”
“How big a chunk?”
“A big chunk?”
“More than half?”
“Yes,” Znaimer replies, chuckling. “And less than all.”

***

One of the oddest aspects of Znaimer’s new venture can be found by poking around ZoomerMedia.ca. Along with pages for the various Zoomer platforms, there is one called “UofZ.ca.” Click on it and a wacky page appears, complete with a purple and gold crest inscribed “Cori. Menti. Libidos. Argenti.” (The translation: “Hearts. Minds. Libidos. Money.”)

It struck me as kind of sophomoric-and it wasn’t the first time I’d had that feeling while researching this article. Then I remembered a remark made by a long-time acquaintance of Znaimer’s. “I think his reading of my generation is wrong,” he said. “His view of boomers is a narcissistic projection. With CITY, he had a real sense of that generation at that moment in time. The core idea of CITY perfectly matched the sensibilities of that era. Now he thinks he represents that same generation as they’ve aged. But those people have grown up. He’s like a missionary trying to lead us to the land of eternal youth.”

Znaimer has a singular, uncompromising vision and, if you don’t totally buy into it, he would say, take your choice, in or out? So you judge him on his track record. A cross-country phone-in show on radio in the early sixties? They said it couldn’t be done. A local channel that put on television a rainbow of colours and backgrounds, experience not required? Preposterous, even in the early seventies. Roving videographers? A slew of niche specialty channels? Znaimer pioneered them all. Sure, there were a few misses, but part of Znaimer’s genius is making you forget about those and focus only on his hits.

If you’re in your late 40s or early 50s, maybe you’re thinking, well, I should give Classical 96.3 FM and AM 740 a listen, since Moses Znaimer is transforming them. Or, if you wouldn’t be caught dead with a seniors’ magazine under your arm, maybe Znaimer’s made Zoomer zippy enough for you to imagine comfortably reading it over coffee in Starbucks. Or, if joining an organization for seniors called, of all things, CARP, never crossed your mind, maybe you’re now giving it some thought. After all, Znaimer’s a visionary, and he’s betting his own fortune on it. And what about those benefits?

With his Zoomer vision, Znaimer is tapping into our basic insecurities. Maybe he’s not been as right as often as he wants us to believe. Maybe that bathtub ad for Classical 96.3 made him look like an aging sea otter washed up in the spume. And maybe I should pay no attention to that man behind the curtain. But what if I am a Zoomer? What if he got it right again this time?

Who Else Should Get Credit for Moses Znaimer’s Accomplishments?

THE FOUNDING OF CITY-TV: Israel (Sruki) & Phyllis Switzer

Although Znaimer made his name synonymous with CITY-TV, pride of place for its creation belongs to cable TV engineer Israel (Sruki) Switzer and his journalist wife, Phyllis.

CITY-TV’s “STREET” STYLE: Jacques de Suze

Znaimer’s parentage of the CITY-TV genre is shared with American “news doctor” Jacques de Suze, who suggested innovations such as a “very street-oriented style” that included roaming videographers and a local newscast that revelled in showing the gritty, chaotic reality of a newsroom.

IDEACITY: Richard Saul Wurman

Znaimer’s annual confab was spun off from Richard Saul Wurman’s TED (technology, entertainment, design) conference.

“ZOOMER”: David Demko

Among those who lay claim to the coinage is Atlanta-based gerontologist David Demko, who began publicly musing about “zoomers” in 1998. Demko trademarked the term, and used it to name an online magazine. He and Znaimer have a slow-burning dispute about the latter’s use of the term in Canada. “You know the homily,” says Znaimer: “Failure is an orphan and success has many parents.”