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In The Money



By Matt Kinsman
02/27/2006

Curtco Media Labs is the latest iteration of many Bill Curtis companies. Its successes (Robb Report, Robb Report Vacation Homes) have taken it to a whole new level. Its few missteps (including a stab at the momentarily hot customer relationship management sector) have either been sold off or quietly folded without harming the overall company.

Over the last 20 years, CurtCo has launched 31 different publications. Today the company has a stable of 13 magazines. With CurtCo becoming the gold standard in luxe publishing, many people forget that the company's start was far more modest.

CurtCo Media launched in 1987 and focused on titles such as Car Audio, Mobile Office and Office Interiors. "Originally our launches were self-funded, which was certainly a challenge for me, since I began the company with little in the way of resources other than a few good ideas," says Curtis. "The result was a group of publications whose business plans featured bare-bones, guerrilla-marketing plans wherein the advertising funded our growth."

Curtis developed his "market driven" approach early. When consumer electronics shifted from conventional TVs to big-screen models, CurtCo launched Home Theater to de-mystify what was then complex technology. Flash forward to 2004, when the demand for vacation-oriented real estate prompted the launch of 100,000-circ. Robb Report Vacation Homes.

In 2001, Curtis purchased then-struggling Robb Report and set about re-establishing the magazine, which had lost its focus on the ultra-luxe market and consequently saw a 70 percent drop in circulation and a decline in newsstand sell-through to under 40 percent. In 2005, flagship Robb Report grew 20.1 percent to $35.7 million in advertising revenue, while ad pages were up 10.1 percent to 1,586, according to Publishers Information Bureau. The CurtCo team took a business that lost millions per year to one with earnings well over $5 million and 20 percent annual increases in profit margins. Today the overall company has swelled to more than $100 million in revenue, a goal that took four years to reach rather than the initial five-year time frame.

While most magazines are happy to break 30 percent sell-through on the newsstand, Robb Report enjoys sell-through in the high 40 percent to 50-percent range, despite an $8 to $10 cover price. "Each publication's distribution plan was carefully orchestrated so that once an ad ran in the magazine, the marketer would profoundly ムfeel' the response and momentum in sales," says Curtis. "This way ad salespeople don't have to be ムmiracle workers' to obtain and grow ad lineage."

In 2003, CurtCo formed a $100 million acquisition vehicle with Weston Presidio and TD Capital and continues to focus on aggressive growth. "Once our investment plans exceeded $100 million for acquisitions and launches, we found that private equity was readily available," says Curtis. Over the last two years the company has teamed with Hearst to launch Robb Report Russia and acquired Showboats International and San Diego.

CurtCo continues to focus on launches that satisfy select niches of the ultra-wealthy. This spring the company will debut Robb Report Luxury Resorts, followed by Sport and Luxury Car this summer and Robb Report Boutique (targeted to women) this fall.

Curtis says that funds are readily available for entrepreneurs with a track record. "In today's financial marketplace, there are 10 dollars that will chase every dollar that you need, assuming that you present a low risk opportunity run by a team with a history of success," he adds. "Unfortunately, funds are thin today for first timers. I would not recommend that anyone attempt to obtain outside money before demonstrating either a track record or at least proof of concept. Without these you may have to relinquish a disproportionate percentage of your interest in the business in order to raise investment funds."

Takeaway

ユ Reached five-year goal of $100 million in under four years.

ユ Looks at high cover and subscription price as key to success.

ユ Words of Wisdom: "After our first divestiture, our business plans took on a less cautious, more forward-thinking structure, though we never assumed huge upfront costs without first assuring ourselves that we had the necessary advertiser momentum."

By Matt Kinsman
02/27/2006







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