Restructurings, Downsizings, and a Social-Media Steamroller
Two weeks of convulsive change at three of the most prestigious magazine publishers, while Facebook grows by nearly 60 percent.
If you’re looking for a snapshot of the state of the magazine-media world, just look at four important news stories from the last two weeks.
Start with Condé Nast. The company announced a reorganization of its sales teams last week in a bid to “simplify the way we work with our partners and better leverage the extraordinary talent in our company,” according to Jim Norton, chief business officer and president of revenue. The new structure consolidates clusters of brands under a single leader, and creates sales category leaders, covering areas such as beauty, luxury or travel. At least three high-profile positions were eliminated, and it's unclear how staff size will be affected moving forward.
A week prior to the Condé Nast restructuring, Time Inc. endured the most recent of its seemingly endless series of shakeups, as new CRO Brad Elders similarly shuffled his sales operation, establishing both cross-brand leaders and leaders for various vertical sales categories. There were a reported 30 layoffs. This most recent Time Inc. shakeup came just six months after one in July, led by the executive sales-management team that was in place then. The two most senior people, at the time, announced in December they were either leaving their posts or leaving the company.
And this week, Meredith Corp. announced it’s eliminating 40 positions, just a week removed from having announced a “record-breaking” first half of fiscal 2017 (the second half of calendar 2016). In a statement, Meredith cast the cutbacks as part of a process of investment in new areas, which as a matter of course, de-emphasize others:
Over the past several years, Meredith has made a number of investments, including strategic acquisitions; brand relaunches and refreshes; video, mobile, social and shopper marketing expansions; and build-out of our licensing and consumer revenue platforms. In the process, we have created new career growth opportunities for many across our workforce. To capitalize on opportunities created by these investments, we must further invest in growth and align ourselves with market opportunities.
In line with these objectives, today we are announced several organizational changes, including a number of promotions and new assignments. As part of these changes, approximately 40 of our colleagues – which represents about one percent of our workforce of approximately 3,800 – will be departing Meredith, half in New York and half across other company locations. We thank them for their service, and wish them the best in their future endeavors.
But the company did a similar round of cutbacks in 2015. In any case, it’s difficult to reconcile “record-breaking” performance with subsequent layoffs.
These three companies are the cream of the crop in magazine media. They are blue-chip publishers, led by the smartest media executives in the world, possessing several of the historically strongest media brands in the world.
That’s why it’s significant that in just two weeks, all three of them have announced cutbacks and restructurings. Repeated series of shakeups are not a sign of stability or success. On the contrary, they’re indicative of disruption — they’re either proactive reactions to market shifts (the positive spin), or they’re the convulsions of companies whose business model, as a result of those market shifts, is no longer certain (the negative spin).
Positive or negative, the unavoidable context is that the market has shifted. And yesterday’s news about Facebook’s earnings makes clear the direction of that shift. Facebook generated $26.8 billion in ad revenue for the year ended on December 31, a 57 percent increase from the same period in 2015.
Because the magazine industry no longer releases revenue figures, it’s hard to estimate what its total ad revenue was in 2016, but it’s a safe bet that it is less than Facebook, and the trends are moving in the wrong direction for magazines and the right direction for Google, Facebook, and other social platforms.
Which makes these last two weeks of media-company moves seem like significant waypoints in an existential journey.