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Tony Silber

'Profits Before Expenses!'

Tony Silber M and A and Finance - 09/28/2007-02:00 AM

From the Folio: Show, Day Three: In a well-attended (20 or so people) and excellent presentation on the structure of building an M&A transaction, the conversation turned to "add-backs," the kinds of items a seller will tell the prospective buyer that he can discount on the expense side because they won't be there after the sale. It's often things like club memberships, cars, or if the owner is paying himself an unusually high salary, some portion of that. Naturally, the seller wants to throw in as many add-backs as possible, because taking out costs means profits are higher, and higher profits (or EBITDA) means a higher transaction price. But sometimes the chase of a higher selling price causes the seller to get over-zealous. Clay Hall, CEO of Aspire Media and moderator of the session, told the story of one such case, where the seller included two full pages of add-backs. Hall described his exasperated response: "You've invented a new accounting term," he says he told the seller. "Profits before expenses!"

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Bill Mickey

Magazines ‘Out of Vogue’ Says Economist

Bill Mickey Consumer - 09/28/2007-02:00 AM

The Economist puffs into the print-is-dead smoke-screen with a story noting that consumer magazines ‘have problems.' And you'll never guess the culprit: The Internet. Apparently people are ‘spending more time' there and an ‘even greater share of advertising spending' is moving online. How much? We don't know, the writer doesn't provide any metrics.

Worse: ‘Magazine units are mostly a drag on growth for their parents.' How much of a drag? Still don't know. But apparently they're a drag on at least two parents-maybe, and possibly more-because Time Warner is fending off rumors of a Time Inc. divestment and ‘people in the industry' are saying it may also sell IPC Media, its British subsidiary, and that ‘publishers reckon' Bertlesmann may sell Gruner + Jahr next year.

That the divisions might be sold someday (isn't everything basically for sale anyway?) and they may indeed be a drag on the bottom line is all relative, and certainly not a reflection of the overall market. Time Warner and Bertlesmann are massive media conglomerates with unique financial pressures and don't represent the consumer magazine industry as a whole. Neither does Emap, which the writer determines might not sell because it's possible no one will pay good prices, which will only add to the industry's ‘gloom.'

But then, and I never thought I'd ever write this in a sentence, here the writer is hoisted on his or her petard, as they say. If Time Inc. is ever sold, buyers will line up around the block, and even Emap's magazine division is reportedly seeing interest from a healthy mix of private equity and strategic buyers. Why? Because in the right context magazines are still an excellent business to be in.

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Dylan Stableford

Digital Magazines: ‘Doing Nothing for Us’?

Dylan Stableford emedia and Technology - 09/25/2007-02:00 AM

An odd moment happened Sunday at the Folio: Show during a pre-conference session. Doug Harbrecht, director, new media, for Kiplinger's, effectively dissed the viability digital magazines. "They're doing nothing for us," Harbrecht said. "They're static ... I think people are realizing that they just don't want their content that way.

(Consider, of course, that Harbrecht also admitted that one of the most common refrains heard outside the office is "Oh, my Grandfather used to read Kiplinger's.")

A few minutes later, an energetic team from Nxtbook, one of the show's sponsors, gave its sales pitch to the same room about how digital is growing, vibrant and why people "just do want their content that way."

Nxtbook's Marcum Grimm, citing industry research, said digital magazines will make up 30 percent in 15 years. Within 25 years, they will represent 75 percent, Grimm said, adding: "Zing!"

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Matt Kinsman

Would These Editors Hire You?

Matt Kinsman Editorial - 09/20/2007-02:00 AM

Editors are faced with not only a demanding and ever-expanding list of must-have skill sets, but also a change in mindset. Two of the smartest editors we’ve spoken to over the last year—one from the consumer side, one from b-to-b—talk about what they’ll be looking for in editorial talent over the next few years.

Alfred Edmond, Editor-in-Chief, Black Enterprise

“At least three skills will be key across the board for people in editorial. First, we’ll need to be better than ever at spotting and developing talent, especially people with the right attitude and degree of intelligence and flexibility.  Print journalists will end up needing to be able to help develop a television show, content for a Web site, podcasts and so on. We need to hire people who are not only technically skilled and talented but people who are coachable, not stuck in what they were doing before but with an attitude that will allow them to adapt to something totally different.

Second, because we’re asked to do more with the same resources, it will be increasingly important for editors to have a general manager’s mentality. It’s like if the owner of a professional sports team tells you to accomplish this and that but without increasing the salary cap.

The last thing that gets harder and harder to do in this world of so-called multimedia convergence is that somebody in the organization has to maintain the integrity of the content. Despite all the cross-pollination and multiple uses and repurposing of content, the consumer has to trust that someone is the guardian of the audience, saying that this information is credible.

Wyatt Kash, Editor-in-Chief, GCN – Government Computer News

“There is a lot of pressure on editors and journalists to begin developing and delivering stories as a multi-media package for the web.  But in practice, the tools to edit and produce those packages require a lot more training and resources than most publishing houses are willing to support.  There’s a reason we don’t ask our writers to learn Quark or HTML—those skills are important in the production stage.  But when it comes to generating original or value-added content, I’d rather our writers commit their time and our resources to developing relationships with sources and honing their journalism and writing skills than learning how to put a Podcast together.

“With that said, I think our writers and editors absolutely need to keep abreast of the rapidly changing nature of information on the Internet.  They need to understand not only how information is being gathered, assembled and presented in new ways online, but also realize that those changes are impacting our readers’ experiences and expectations.  So the skills that will be important for me to see as I recruit talent will be the ability to use emerging online research, networking, and collaboration tools online as well as the ability to get answers to frank questions in person from the right sources in our market.”

 

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Tony Silber

The Role of Print for the Online Obsessed

Tony Silber emedia and Technology - 09/18/2007-02:00 AM

Paradoxically, the magazine industry is obsessed with online media. Advertisers are flooding the online channels, with some publishers telling me they can't create e-media channels fast enough to sell.

Even in my market, where we cover the magazine industry, the growth of advertising online is so significant that it will rival the size of the monthly print magazine in the not-too-distant-future.

That obsession, then, is not all that surprising. In fact, I have in the past predicted that print-weeklies on the b-to-b side are dinosaurs. Especially in the IT space, there is a lot of evidence to support this. Overall advertising spending in the big IT weeklies has declined dramatically-fallen off a cliff-in the last several years. Some of them are barely hanging on.

So why is it that over the last couple of days I'm rethinking this area anew? Several reasons. First, I've never been an online true believer. I've never concluded (unlike many others) that print media is in an inexorable decline and has in some served markets become an impediment, not part of the solution.

Second, I've had some really interesting conversations recently on exactly this topic. First, Ted Bahr of BZ Media and I had a conversation about print at the U.S. Open this month, and while he noted the decline of the IT weeklies, he also said that his audience-both advertisers and readers-like his print magazine for software developers.

Maybe even more interestingly, he noted that his an all other magazines he knows of don't have any falloff in print subscriptions-direct-request is not declining, renewals are not falling off, nor are they more costly to acquire. (Things are a bit different on the consumer side, but not all that different.)

So there is no decline in reader interest in print, even as advertisers seemingly begin to write it off.

Then I had a conversation with IDG's Bob Carrigan the other day where he emphatically stated that the solution to the decline in advertising in print weeklies is not to reduce the frequency. He said the nature of buying in the weeklies is such that a reduction in frequency would essentially mean one-quarter of the spend, because the marketers would not end up bulking up on a single monthly, say. So print, even in decline, somehow stays vital.

And then today in a Folio: and CM Webinar on lead generation, I heard the case made in a compelling way to integrate print into lead generation in a way that is very different from the old bingo card approach and much closer to the online lead-generation methods. This is big, in my opinion, because when you tie print to online media, the sum is far better than the individual parts.

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Dylan Stableford

Times Kills TimesSelect: What It Means for Magazines

Dylan Stableford Consumer - 09/18/2007-02:00 AM

The New York Times today announced that it will drop its paid online subscription program, TimesSelect, effectively admitting its two-year attempt to charge its Web site users to access premium content and archives had failed.

TimesSelect, which charged $49.95 per year ($7.95 a month) for access to its columnists and the newspaper's archives, drew an estimated 227,000 paid subscribers and $10 million in annual revenue. Beginning at midnight, the newspaper will open up access to its entire site to readers. So what

changed?Many more readers started coming to the site from search engines and links on other sites instead of coming directly to NYTimes.com. These indirect readers, unable to get access to articles behind the pay wall and less likely to pay subscription fees than the more loyal direct users, were seen as opportunities for more page views and increased advertising revenue.

According to Nielsen/NetRatings, NYTimes.com traffic sees roughly 13 million unique visitors each month, and could explode without a wall, according to industry observers. The crumbling of the Times subscription modelleaves the Wall Street Journal as only major newspaper in the country to charge for access to most of its Web site, generating $65 million in revenue, according to the Times.

So what does this mean for magazine publishers? Consumer Reports, one of the few remaining magazines to charge for access to its site, is nearing three million paid subscribers to its Web site. (Most subscriptions cost $26/year.)

But for most consumer magazines, the free model dominates the industry. Why? Because it comes down to readers - which is why magazine industry consultant Bob Sacks likes the Times move.

"They are thinking long term and this move will continue to protect and promote the Times brand, and at the same time cultivate new readership," Sacks wrote in an e-mail. "After all sustained loyal readership is the bedrock of any publishing empire, be it large or small. If you don't have readers, exactly what do you have?"

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Dylan Stableford

What's The Status On That Jane Pratt-Gwen Stefani Magazine?

Dylan Stableford Consumer - 09/17/2007-02:00 AM

JANE PRATT: Tell me about the new record.
MICHAEL STIPE:  There's two of them. We're putting out our first live record, which comes out in mid-October. Our first ever live release, it's a DVD so it's a feature length film that was shot 2 years ago. That comes out in October, and I am going over to Europe to do press for that. But then I'm working on the new album that comes out in March probably.  And ... the band, it's been a really tough ten years for us.  We at times, we're not communicating on the level that we should have been and we were trying to keep a real brave face publicly, and kind of hold through it, but I have to say I think we finally found a place of communication. We're talking to each other, we've written a bunch of great songs, we've recorded 14, I've written 14,  I've got another 4 songs to present to the guys next week when we go back in the studio and one of those is really going to surprise them.  I can't wait to see them.

As far as her rumored magazine project with Gwen Stefani, well, Pratt didn't return an e-mail seeking comment. But she recently gave Time Out New York something of a non-confirmation confirmation:

TONY: That is so Jane. Do you miss print?
Jane Pratt: No, but I can't talk about it.
TONY: Because you're starting a new magazine with Gwen Stefani?
Pratt: I'm not allowed to say! You can speculate if you want. I feel like I am working in print now.

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Bill Mickey

The Economist: $1 Million Chicago Marketing Push

Bill Mickey Sales and Marketing - 09/17/2007-02:00 AM

Phil Rosenthal at the Chicago Tribune reports that The Economist is beginning a $1 million marketing push to boost readership in Chicago. It's part of a multi-city campaign that also includes Washington, San Francisco, Boston, Denver, Baltimore and Austin, Texas. Chicago's slice of the pie? 25,000 of the 700,000 U.S. copies, reports Rosenthal.

Be ready to dig in, however. This is no magazine for the time-sensitive. Editor-in-chief John Micklethwait wants you to work for your new global perspective: "You turn on your television anywhere now, you get so much pap that what I think people want is substance. We're going to make them think. There's no great theme behind it. We just follow the things we think are interesting. ... It is a part of the market that not everybody is in. But we've found the top of the market is bigger than other people thought."

The pap he refers to? "We have sadly undercovered Britney Spears," says Micklethwait.  

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Matt Kinsman

Is Print Technology Replacing Production Knowledge?

Matt Kinsman Design and Production - 09/13/2007-02:00 AM

There's a pretty vocal segment of the publishing industry that says production technology has advanced to the point where problems such as color consistency, fonts and high res/low res shouldn't exist. Time Inc. maintains they don't experience any of the common problems associated with file management. Influential production consultant Bo Sacks has previously written, "Quality control has been reduced to a logarithmic equation. You can take the subjective out of the press. It not only can be done, it already has been done. Wake up and move on to more important issues."

Still, while the technological advancement is acknowledged, problems continue to exist with standards and human implementation of the technology. And perhaps an even bigger problem is the erosion of actual production knowledge, according to Biagio Lubrano, quality control manager at Conde Nast. While printers are being squeezed on costs by publishers, Lubrano contends that many are using new technology as an excuse to replace personnel-often the same personnel that knew how to rectify problems that a machine couldn't. "[The technology] has been oversold," says Lubrano. "The technology lets things go to the last minute, and that's creating more room for mistakes. There have been so many cuts that you're down to the raw mechanics of a specific task. The good knowledge of the task is gone. All the old craftsman are gone. Schools are putting out Web designers not page designers. Printers are buying technology to eliminate people. There's no training programs and printers are not teaching the basics. Technology will replace the knowledge and the loser is the customer."

Agree? Disagree? Lubrano will be one of the featured speakers at the Folio: Show on a panel called "The Road to Print Manufacturing Predictability" on Monday, Sept. 24, at 10:15am.

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Dylan Stableford

Forbes Cuts Helicopters, Yachts from Budget

Dylan Stableford Consumer - 09/12/2007-02:00 AM

Here's some news every publisher in America can relate to:

[Forbes,] the family controlled publishing company that last year sold a big minority stake - reputed to be as much as 40 percent for $300 million - has now sold off its two corporate helicopters. The flying machines include a Bell JetRanger, a nifty little four-seater that used to be perched atop the Forbes yacht the Highlander, and a larger Apache-type chopper used for long-range commuting by the corporate brass and guests.

"Forbes did sell the two 20-year-old aircraft," a spokeswoman confirmed. "We are planning on buying a new Bell JetRanger for the Highlander as soon as the boat heads south this winter."

This news comes on the heels of last week's devastating revelation that the annual twilight cruise for media and Forbes staffers around New York harbor aboard the family's yacht would be cut from this year's budget.

Shame.

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Dylan Stableford

FHM: More Trouble with Topless Teens

Dylan Stableford Consumer - 09/11/2007-02:00 AM

Bad timing. EMap, the U.K.-based publisher of FHM, is reportedly having no trouble attracting suitors for its on-the-block company -- it's the topless teens that are posing a problem. According to a report in the Media Guardian, FHM has come under fire from England's Press Complaints Commission after the magazine published a topless photo of a 14-year-old girl without her consent.

The photograph appeared in FHM's April 2007 issue as part of a gallery of mobile phone snapshots. FHM said it receives roughly 1,200 photos of women either topless or wearing lingerie for publication each week, adding that it was "extremely surprised" to learn that the girl was 14 "as she certainly appeared to be older." According to the commission, FHM "should have been much quicker to [recognize] the damage that publication would have caused the girl, and offered to publish an apology or take other steps to remedy the situation to the satisfaction of the complainant. Failure to respond in a swift and proportionate manner aggravated what was a significant breach of the code."

The magazine offered an apology and vowed not to republish the image.

This is not the first time the FHM brand has had trouble handling teen girls. The now-shuttered U.S. version of the magazine ran into trouble with liquor advertisers when it decided to put Brooke Hogan -- the Hulkster's underage daughter -- on its November 2005 cover. That same year, New York's Hudson News censored five consecutive months of FHM displays for what it deemed were inappropriate covers.

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Tony Silber

Crossing the Line With Ads and Edit is Like a Small Knife Cut: One May Not Hurt, But If You Keep Doing It…

Tony Silber Editorial - 09/10/2007-02:00 AM

There was a time in the summer of 2006 when Folio: ran an article about ABC's new rules for Verified Circulation, and, because of a last-minute change in the map, an ABC ad fell right next to the ABC story. It was my responsibility to catch the unfortunate juxtaposition, and I didn't.

Then in Circulation Management last year, we ran a story about fulfillment services from outsource providers. A couple of months before that, I had lunch with the president of one of the fulfillment companies, who asked me to use him as a source-where appropriate. No pressure, no questionable suggestions of quid pro quo. Fine. So I passed that info on to the edit team, and said use him where appropriate and without any consideration of advertising.

Of course, the best intentions sometimes go awry, and again because of a map change (and the ad side not following closely enough what was happening on the edit pages) we ended up running a photo of the guy on an edit page across from his ad. Not good, and I heard about it from the company's competition.

I bring these anecdotes up simply to point out that this stuff happens inadvertently sometimes, but even then-as I tell our editors-even then, perceptions get formed and reputations get damaged, sometimes permanently.

You have to be both clean and buttoned up.

Which is why it disturbs me when I see others in our market do this so blatantly and so consistently. You can only make so many inadvertent mistakes. You can only give so many mulligans. When you see ads for products followed by stories whose headlines explicitly reference the exact name of the product in the ad, that's bad. When you see photos of suppliers appearing in stories built to please suppliers (not readers)-and those photos are next to the supplier's ad-and this happens consistently, that's bad. When stories fill the book issue after issue that are "ad traps," not valuable information for the reader, that's bad. When the owner of the cover-2 ad spread also has an editorial column on the back page, that's bad. And all this is widespread not just in my market but throughout b-to-b. (Consumer magazines are also frequent ad-edit ethics violators as well, so my intention is not to accuse just one sector here. B-to-b happens to be the subject of this post, that's all.)

Back to my market. I don't like to throw stones. And I'm obviously biased, as a competitor. And even though those kinds of shenanigans work in my favor in the competitive sense, I can tell you it makes me mad as anything as a reader that I'm treated in a disrespectful manner.

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