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Jason Fell

Magazine Journalism’s Darker Façade Abroad, Part II

Jason Fell Editorial - 04/08/2009-13:07 PM

Last year, I wrote a post about prosecutors raiding the offices of a French auto magazine which allegedly published unauthorized pictures of a yet-to-be-unveiled new car. Authorities confiscated computers and documents containing names and contacts of sources, and arrested one staffer.

Today, I read a story about how an Egyptian court withdrew the publishing license of a monthly magazine it said published a poem two years ago that included “expressions that insulted God.”

Foreign authorities shutting down or censoring magazines and newspapers, unfortunately, is nothing new. But what caught my attention was the last line of the BBC report, quoting the Egyptian court’s official ruling: “Freedom of press … should be used responsibly and not touch on the basic foundations of Egyptian society, and family, religion and morals.”

WHAT!? If that’s the case, I’m not sure what Egyptian journalists are allowed to write about.

One more time: I’m happy that I’m a journalist working in the U.S. , where freedom of the press is, at least most of the time, respected.

Jason Fell

A G-Rated

Jason Fell Sales and Marketing - 04/06/2009-14:53 PM

The financial situation at Playboy hasn’t been pretty: The company reported a year-end net loss of $156.1 million in 2008, compared to a net gain of $4.9 million during 2007. Year-end revenue from Playboy’s publishing division was $84.5 million, down from $93.8 million in 2007.
The company said it expects to report a 27 percent decline in advertising revenue in its publishing division in the first quarter of 2009.
The publisher has understandably been in a tight spot. Print-side advertising revenue has been down and online has suffered since so much—ahem, racey—content can be found elsewhere, for free. Its online/mobile sector reported $48.4 in 2008, down 24 percent from the prior year.
Playboy’s solution? Clean up in hopes of attracting advertisers. The magazine announced a redesign today that will offer “a greater value proposition for advertisers, complement Playboy magazine, and firmly position as the number one entertainment men’s site,” according to Playboy Digital division vice president and associate publisher John Lumpkin.
Risqué photos will be relegated to one specific area, aptly called “Girls.” Playboy said the site will feature a forum, a culture and lifestyle news section and new multimedia features, among others.
But will the dramatic turnaround online be enough to drum up enough sales to stay afloat? I’m sure traffic to the site is already sizable but are users going there for the editorial content, or to shop? My gut tells me no.
It’ll take a lot of work to reengage Playboy’s audience online.

Jason Fell

Layoff Round-Up: Entrepreneur, Forbes, More …

Jason Fell Consumer - 04/01/2009-14:42 PM

It’s a battlefield out there. Yesterday, b-to-b publisher Cygnus Business Media laid off 30 staffers, or about 6 percent of its workforce, and suspended publication of two photography titles.

In terms of layoff/cutback stories, that was just the tip of the iceberg.

Rumors surfaced late Tuesday about massive editorial layoffs at Irvine, California-based Entrepreneur Media. Two FOLIO: requests for comment have gone unanswered, but a knowledgeable source tells me that eight editorial staffers—including executive editor Charlotte Jensen and managing editor Mike Werling—have been cut. If that’s true, a quick count of editorial names on the masthead indicates that 15 print and online editorial employees remain—including a copy editor, a research editor, a listings assistant and two interns. There aren’t many people left to write the magazine.

There also have been rumors that Forbes Media has started a second round of layoffs, this time letting go more than 50 people. My e-mail about the cuts was bounced from spokesperson to spokesperson and I never received an official response. Forbes announced a restructuring in November that resulted in 43 layoffs.

The rumors hit b-to-b publishing, too. Sources told me today that Milo Media—which saw six staffers, including several publishers, walk out last week to form their own, competing publishing company—has closed down altogether. Phone calls and e-mails to president Mike Domke have not been returned.

I also received a tip that Randolph, New Jersey-based Edgell Communications slashed employee salaries by 10 percent company-wide. That, it turns out, was true. “As consistent with Edgell's operating philosophy, particularly over this recent downturn, the salary reduction was a proactive decision based on the high degree of uncertainty in the market,” a spokesperson wrote in an e-mail. “Our revenue forecasting—even over several months—has become increasingly unreliable.” Edgell, which reorganized late last year, said no layoffs were associated with the salary cuts.

Even as I’m writing this, I’ve stumbled upon more rumors of layoffs and closings.

It’s a tough time to be in magazine publishing. Sometimes it seems all you can do is put on your helmet and let the shrapnel fall.

Jason Fell

Penton ‘Will Never Again’ Be Dependent on Print Advertising

Jason Fell B2B - 03/30/2009-15:15 PM

The outlook for b-to-b advertising revenue for 2009 hasn’t been looking great. Earlier this month, American Business Media said the economic recession could force advertising revenue in the b-to-b space down 19 to 22 percent in 2009. That’s after revenues plunged 13.1 percent during the fourth quarter of 2008, leading to an overall slide of 7.3 percent.

So, the need for integrated packages is greater now than ever, right? A no-brainer, even.

Today, at the SISO CEO Conference in San Diego, recently-appointed Penton Media CEO Sharon Rowlands [pictured] told attendees that print advertising in trade magazines will not recover to previous levels when the economy rebounds.

“Penton will never again be overwhelmingly dependent on print advertising as it is unlikely to return to historical highs,” Rowlands said. “Advertisers have so many more choices for their marketing campaigns today—ranging from live to on-line events, a variety of electronic products, sophisticated direct marketing, etc. Offering the full array of such media will be what will distinguish the b-to-b winners from the losers in the future.”

Jason Fell

Women + Bikinis = Big Event Bucks for Shape

Jason Fell Consumer - 03/23/2009-16:35 PM

What’s the key to launching a new face-to-face event in these tough economic times? Women in bikinis isn’t a bad place to start.

While other publishers and magazine associations are pulling the plug on their annual conferences, American Media Inc.’s Shape magazine today said it is kicking off a two-stop “Bikini Body Tour.”

Each event will feature professional trainers teaching cardio and full body conditioning classes as well as calorie-burning dance instructions. Also on hand will be 2008 Sports Illustrated Swimsuit of the Year cover model Marisa Miller. The first is scheduled for May 16 in Santa Monica, California. The second stop is Miami, Florida on June 13.

So, exactly how attractive is a consumer event for bikini clad babes on sun-soaked beaches? The event, which has attracted 15 sponsors including Victoria’s Secret and Pantene, is Shape’s “most successful program event launch,” a spokesperson told FOLIO:.

I’m sold. Where can I sign up?

Jason Fell

Bloggers Say They’re Open to Paying for Online Content

Jason Fell Editorial - 03/20/2009-11:53 AM

As print advertising revenue continues to decline, publishers are debating whether or not to charge for content online. According to a report conducted by J.D. Power and Associates, unveiled this week at the McGraw-Hill Media Summit in New York, 40 percent of bloggers—on their own blogs or on message board postings—said they would, or already do, pay for news content online.

What was one of the most common reasons why? Because they “don’t want the quality of news to decline.” Really? How noble.

Let’s be serious. If all original news sites put up paid walls today the majority of bloggers would find themselves out of business. Sure, “walled gardens” online are old school, but charging micropayments or subscription fees for premium content may not be too far off. What would happen to bloggers who make their living regurgitating (hopefully at least linking to) the work of professional journalists?

To be honest, FOLIO: accesses a good amount of news, if not just for background, for free online. Would I be open to paying subscription fees to sites I think are valuable sources of quality, reliable news? Sure, but not because it’s the right thing to do, necessarily. I’d pay up because that content improves the quality of my own original reporting.

Jason Fell

Luxury Magazines Not So Recession-Proof After All?

Jason Fell M and A and Finance - 03/11/2009-10:53 AM

McMurry’s 6, a magazine the custom publisher said targeted readers with household average net worth of $25 million, has suspended publication. CEO Chris McMurry said the company will consider relaunching the title when “the economy and luxury goods ad spending pick back up.”

When the magazine launched last fall, it entered a crowded luxury magazine market at a time when the bottom was about to fall out of the U.S. economy. One could argue that it wasn’t the best time to launch any magazine, not to mention one targeting luxury goods advertisers. Or, perhaps because the ultra-affluent can be a bit more insulated than the rest of us in tough economic times, it could have been a fine time to launch the magazine.

For instance, Singapore-based publisher CR Media next month is planning to launch Prestige New York, a U.S. version of its Prestige Singapore flagship targeting “high net worth individuals.” The monthly magazine will carry a controlled circulation of 50,000 and distribution in ultra-affluent households, primarily in New York.

In the meantime, here’s a quick look at how some of 6’s competition fared last year in terms of ad pages and total circulation:

Architecural Digest -3.8 830,533 0.5
Departures -6.5 N/A N/A
Modern Luxury Dallas N/A 51,064 0.6
Modern Luxury Hawaii N/A 51,479 -7.8
Robb Report -9 113,496 8
Town & Country -5.3 455,087 -0.3
Travel + Leisure -6.7 960,147 -2.7
Vanity Fair -15.5 1,190,000 2.5

Sources: PIB and ABC

Jason Fell

Reader’s Digest, Source Interlink Among Companies with ‘High Risk of Defaulting on Debt’

Jason Fell M and A and Finance - 03/10/2009-16:08 PM

For the financially morbid types (and the rest of us) who’ve been tracking U.S. companies on the brink of bankruptcy, credit rating agency Moody’s has created a list to satiate our appetites. The “Bottom Rung” lists roughly 300 companies the agency says are at the highest risk for defaulting on their debt.

And, unsurprisingly, magazine publishers are no exception. Making the list is the Reader’s Digest Association, with $2.21 billion in outstanding debt. The publisher recently retained law firm Kirkland & Ellis and financial adviser Miller Buckfire to help “explore strategic initiatives.”

Also on there is embattled publisher/wholesaler Source Interlink, with $1.63 billion in outstanding debt. (It can’t help that the company’s stock is trading at less than 11 cents per share.)

Click here to see a list of the top 30 companies based on rated debt.

Jason Fell

Condé Nast Internal Memo: 'Managing Through Challenging Times'

Jason Fell M and A and Finance - 03/06/2009-10:59 AM

Condé colleagues: GQ editor-in-chief Jim Nelson, publisher Peter  Hunsinger, chairman Si Newhouse and CEO Chuck Townsend in headier times.

"Managing Through Challenging Times.” Is that the understatement of the year? No, it was the subject line of an e-mail Condé Nast CEO Charles Townsend sent to staffers Thursday.

As news that the national unemployment rate jumped to 8.1 percent last month—the highest in 25 years—as a whopping 651,000 people lost their jobs, the mega magazine publishing chief executive called on his employees to “prudently and responsibly manage our business costs and expenses.”

While Townsend didn’t detail any specific cost-cutting initiatives, he did say the company will need to make “difficult decisions to manage costs and ensure our financial well-being.” Are more layoffs to come?

Late last year, Condé Nast laid off about 5 percent of both its print and online staff. In December, Condé closed its syndicated blog network and scrapped, its social networking/virtual scrapbooking site for teen girls. In January, Condé Nast shuttered Domino, its four-year-old shelter title, and its accompanying Web site.

Here’s Townsend’s memo, via All Things Digital:

From: Townsend, Chuck
Sent: Thursday, March 05, 2009 05:04 PM Eastern Standard Time
To: Conde Nast Publications
Subject: Managing Through Challenging Times

I continue to believe that there are two things that make our Company truly unique, world-class brands and remarkable employees. This statement is even more true today as I watch how Condé Nast is managing through this challenging economy.

While advertising pages are down, Condé Nast is gaining critical ad revenue market share through the early part of 2009. Perhaps more importantly, our consumer connectivity, as measured in key circulation statistics, is particularly strong.

So, while our Company is not immune to the economic stress that has been experienced by the media community, we have made adjustments to secure our ongoing stability, just as each and every one of us has had to personally deal with the economic challenges we face.

Unavoidably, as the downturn extends, we have to make additional difficult decisions to manage costs and ensure our financial well-being. These decisions involve all of us. We’ll all have to do more with less and accept that some of the benefits and resources that were available to us in robust economic times will have to be scaled back–and revisited when the economy and our business recover lost ground.

The best course of action is for us to prudently and responsibly manage our business costs and expenses through these troubled waters, assuring us the opportunity to fully participate in the recovery that lies ahead. At that time, we will take great pride in what we accomplished.

I can only ask that you join me in these efforts to ensure the continued success of our great Company.

Jason Fell

Airline Takes Heat Over SI Swimsuit Promo on Side of 737

Jason Fell Sales and Marketing - 03/02/2009-17:32 PM

Here’s when a magazine marketing idea that sounds good on paper can backfire.

Southwest Airlines is taking some heat over the steamy picture of Sports Illustrated swimsuit issue cover model Bar Rafaeli splashed on the side of one of its commercial 737s.

Since the illustrated jet first hit the runway February 11, the airline has received angry letters and comments on its official blog about the SI tie-in promotion. “This looks like a flying porn ad,” one commenter wrote. “I'm a longtime fan of SWA, this is one reason for me to change airlines.”

“I find this tacky and somewhat offensive,” wrote another. “I am a twenty-something male, and I would not want to have to watch this plane pull up to the gate traveling with my young child, or mother, grandmother, etc. I know Southwest is known for its fun, laid back qualities, but this is just completely inappropriate to plaster all over the side of the plane.”

A Southwest spokesperson said about a quarter of the response it has received about the promotion so far has been negative. "As with anything that's different and unique, you do hear from some people who disagree," the spokesperson said. “We wanted to make sure it was in good taste before we put it up on the aircraft.”

Likening the image of Rafaeli to porn, however, is where I take exception. How different is this than a billboard on the side of a highway? Is it different than ads in fitness magazines? How about a day at the beach?

I’m not sure what SI publisher Time Inc. thinks about all the negative attention. A spokesperson did not return a request for comment today.

SI should be used to controversy when it comes to the marketing of its swimsuit issue, however. Mayor Bloomberg’s office, for example, tried to stop David Letterman from unveiling this year’s cover on a New York rooftop. (Their beef? Traffic.) Last year, even a Time Inc. staffer took issue with the issue (“Time Inc. Staffer Complains About SI Swimsuit Issue: ‘My Company Made Me Look at Porn’”).

And all this, by the way, from the airline that in 2007 booted a female passenger whose clothes it deemed were inappropriate (read: showing too much skin) for flight. Somewhat ironic, isn’t it?

[Image via]

Jason Fell

10 Reasons Why M&A Will Be Stronger in ‘09

Jason Fell M and A and Finance - 02/24/2009-10:55 AM

For the first time in the more than two decades Veronis Suhler Stevenson has been producing its annual Communications Industry Forecast, the private equity firm Monday issued a special "mid-term update,” revising its previous forecast of a 5.4 percent gain in overall media spend in 2009 to a 0.4 percent decline.

While the magazine industry waits to dig out from the global economic downturn, media investment bankers the Jordan, Edmiston Group maintained its optimistic tack yesterday, releasing the “Top 10 Reasons Why M&A Will Be Stronger in 2009.”

Here’s a look:

Diversified Media, Marketing and Technology Companies

1. Pruning the Portfolio: Diversified media companies are analyzing their portfolios and making decisions to trim non-core assets to strengthen operating performance, build cash reserves, and provide liquidity to make acquisitions of high-growth, core businesses.

2. The Re-Tooling Imperative: For diversified media and marketing companies. Pressure on core traditional businesses means retooling for digital is no longer an “extra credit” project, but an imperative, and they must look to acquire high-growth businesses.

3. Investing in the Value Chain: Technology companies are pushing to participate more in the media value chain—from content creation to distribution to optimization to monetization.

4. IPO Window Nailed Shut:
Privately-held companies that hoped to tap the public markets as a way to provide liquidity for shareholders are finding the IPO option is currently non-existent. So, these companies are turning to M&A to gain shareholder liquidity.

5. Public Companies Going Private: There is pressure on public companies to go private, given low stock prices and valuations. Being a public company in current market conditions can be a distraction, and management needs to focus on running their businesses and strengthening their competitive positions.

Private Equity Firms

6. Pent-up Market Demand: Private equity capital overhang—swelling pools of private equity capital have begun to put pressure on PE firms to become more acquisitive and build their portfolios.

7. Dealing with Distressed Assets: Over-leveraged PE-backed companies are forced to sell assets, and/or recapitalize, to avoid bankruptcy.

8. Prime Time for Newer PE Firms: PE funds, especially those not distracted by legacy assets, see current buy-low market opportunities offering the perfect entry point to the media, information, marketing services and related technology markets.

Venture Capital Firms

9. Merge to Survive: Online media and advertising technology categories that were subject to “me too” venture investing are fragmented and ripe for consolidation.

10. Scarcity of Next-Round Funding: Given the lack of liquidity in the market, VC-backed businesses will have difficulty raising new rounds of investment capital and will instead need to find buyers.

Jason Fell

Attorney: Source Interlink Avoided ‘Thousands’ of Layoffs with Restraining Order

Jason Fell Audience Development - 02/19/2009-10:09 AM

UPDATE: Time Inc., Source Interlink Settle

The U.S. District Court in the Southern District of New York might have saved thousands of jobs when it granted embattled magazine publisher and wholesaler Source Interlink a temporary restraining order in its anti-trust lawsuit against several major magazine publishers and rival wholesalers—at least for now.

“If things continue the way they are going, Source will not be able to make its payroll this Friday,” Source attorney Marc E. Kaskowitz argued during the company’s February 13 court appearance seeking the order. “The result of that, your Honor, will be that the company will have no choice but to lay off thousands of employees.”

The order, which was granted by the court, prohibits publishers and national distributors from denying shipments to Source’s magazine distribution business. Source alleges that the defendants —including publishers Time Inc. and Hachette—“conspired” to force the company to sell its distribution business at a steep discount to rivals Hudson News and News Group.

The suit follows Source’s and fellow wholesaler Anderson News’ separate 7-cents-per-copy price hikes—which publishers largely balked at and refused to pay.

In what he described as a “gesture of goodwill,” Kaskowitz said Source on February 2 made several “advance payments” (totaling about $85 million) to national distributors after the defendants—except Time Warner—indicated they would continue to supply magazines to Source and would work toward an agreement.

“Literally within minutes of the payments that Source made, these good faith advance payments, the publishers and the national distributors sent letters to Source reneging on the assurances that they had given to Source during the previous two to three days and informing Source that they would no longer supply Source with magazines,” Kaskowitz said.

The temporary restraining order is valid until at least the preliminary injunction hearing, which is scheduled for February 23.

Did Source deserve the order? Click here to read the full transcript, via Incisive Media’s AM Law Daily.