Laura Lang: Tom Cruise, Katie Holmes Divorce Key to Digital Transformation

The Time Inc. CEO told the Fortune Brainstorm Conference in Aspen that how consumers followed the divorce points the wayforward for her struggling magazines.

TORONTO – As newly-arrived Time Inc. CEO Laura Lang searches for new business models for magazines like People and Sports Illustrated, a surprising beacon came to her recently: the break-up of Tom Cruise and Katie Holmes.

“You really have to understand where the consumer is,” Lang said Tuesday at the Fortune Brainstorm conference in Aspen, Colo., while taking part in a panel on transforming mature business models through innovation.

Consumers of any age, she argued, look for headlines in the morning. Then as the day goes on, and computers and tablets become close at hand, consumers look to go deeper into the news. “And when you’re on your own time, and usually in the evening, you’re ready to get immersive,” Lang observed.

How does that fast-changing consumer behavior play out?

Take June 29, when Katie Holmes out of the blue filed for divorce, while husband Tom Cruise was on a movie set in Iceland. Lang said the news came on a Friday afternoon as a People scoop, and produced a surge of traffic to via smartphones. “It all came in through mobile. It was immediate,” she recounted.

And during the next couple days, consumers went online for photos and additional news coverage.

“By the time the magazine came out, there had been a lot of discussion and interest built, and the content that was in the magazine expanded on the story that started Friday afternoon through mobile,” Lang argued.

The lesson for Time Inc. is adapting to where the consumers are in a fast-changing digital world, and putting the consumer in the middle of the action.

Meanwhile, Electronic Arts CEO John Riccitiello told the Fortune Brainstorm conference that the games maker has also transitioned to a consumer-centric organization to figure out how to make the digital curve.

“Focusing on the consumer and what they’re looking for is the best answer, and not getting too hung up on whether it’s a mobile, social or PC game,” he told the panel.