As Blue-Chip Publishers Reinvent Themselves, What Does It Mean for the Industry?
Execs weigh in on existential change at Time Inc., Rodale, and Wenner Media.
It’s been a busy couple of weeks in the world of magazines. Three iconic companies made major moves, and none of those moves necessarily reflect a positive outlook on their own futures, or for the print magazine industry overall.
First, on June 13th, Time Inc. laid off 300 people in the latest round of an extended run of tumult at that company. The June 13th cutbacks came three years almost to the week when the company spun off from Time Warner. The company is also moving Food & Wine to Alabama, in part perhaps because of cost considerations.
Then on June 21st, Wenner Media announced it had sold Men’s Journal to American Media.
The sale of the 25-year-old magazine came close on the heels of the sale in March of Wenner’s Us Weekly, also to American Media, and leaves the once-powerful company with just a 51-percent stake in flagship Rolling Stone and a gaming website it launched last year.
The same day, June 21st, Rodale announced that it is exploring strategic options, a move that’s usually a precursor to divestment. The family-owned company, founded in 1930, was said to have cut 80 to 100 employees ahead of the announcement, according to the New York Post. It announced in January that it was selling some of its properties in Emmaus, Pennsylvania, in a bid to centralize and to raise $4.6 million.
Because of the blue-chip nature of the companies involved and the compressed timeframe for these momentous announcements, this two-week period stands out even in a year when the drumbeat of consolidation and cutbacks has been relentless for magazine media.
So Folio: sought to get a broader perspective on what it means for the industry. Is it just garden variety individual portfolio adjustments and rightsizing, or — given the long decline in print media and the dominance of digital advertising by Facebook and Google — a look at what’s ahead for the overall industry? We asked a range of executives for their take, including, naturally, the principals from the companies involved.
Time Inc. CEO Rich Battista, through a spokesperson, said that further consolidation (presumably of the kind that just happened at his company) is likely given the long-term secular decline in print. But part of it, he added, is advertisers wanting to work with fewer and larger partners. “Which makes Time Inc. — number one in print and the only publisher in the industry in the top 10 ComScore digital-audience ranking — uniquely positioned to benefit from the disruption in the industry,” Battista said.
And Gus Wenner, head of digital at Wenner Media, said, “As a media company in today’s environment, it is crucial to shift reliance from the print business to the brand business. Our brand is Rolling Stone, and that is what we are doing, aggressively, to ensure future growth.”
Other industry leaders, who spoke on the condition of anonymity so as not to be seen criticizing their peers and competitors, were less certain, generally casting the three moves as a sign of continued consolidation and diminishment.
“The decline in print advertising accelerated more than expected over the past year or so,” one consumer-magazine media president tells Folio: sister site min. “When looking at print-focused portfolios like Wenner, Rodale, and Time Inc., I’m not surprised that you are seeing cost cutting, brand sales and consideration of taking on strategic partners. If a portfolio of brands hasn’t managed a reasonable transition from reliance largely on print advertising, then I do think you’ll continue to see companies explore options that provide them with more cash that can be used to drive that transition,” the executive added.
Said another CEO of a major magazine media company that has seen a remarkable rebound the last two years: “I think the recent news in our industry is a sign of the continued disruption. I expect consolidation will continue, because there is a significant cost advantage to be a bigger player.”
In the end, the perspective of a senior Rodale executive may be the most accurate. It’s a sentiment often heard in these uncertain times, but it hasn’t yet stopped the inexorable tide. “The industry is evolving quickly, and while change can be disruptive, it also brings opportunity,” the Rodale executive said. “Companies like Rodale, with deep customer relationships rooted in a mix of sought-after health and wellness content and utility-driven products, will succeed over the long term by finding the right ways to engage with customers across multiple platforms.”