Big Publishers Shed Media Assets, Time Wasn't On Their Side - The Times Either

In a sign of the Times, er Time Inc. too, two of America's most powerful publishing companies Tuesday announced plans to shed major assets to better position their core offering for the future. But the divestiture strategies revealed by The New York Times Co. and Time Inc. are pursuing markedly different paths. The Times Co. said it was getting out of the broadcast business, while Time Inc. said it would pare its consumer magazine portfolio by 18 publications, including some classic print titles.

The Time Inc. sale includes some of the nation's most venerable special interest titles - names such as Popular Science, Field & Stream and Outdoor Life, as well as its Parenting Group, while the Times Co. will divest its entire broadcast TV operation, including nine network-affiliated local stations in order to focus on its newspaper and digital operations.

The Times Co. owns a duopoly in Oklahoma City; four CBS affiliates, located in Memphis and Norfolk, Va.; and two each affiliated with ABC and NBC. The company said it expects the station group to post $150 million in revenue this year. Last year, it accounted for 4 percent of company revenues.

"We believe a divestiture would allow us to sharpen our focus on developing our newspaper and rapidly growing digital businesses, and the synergies between them," said Janet L. Robinson, president and CEO.

The local station business is no longer the cash cow it once was. Audiences are fragmenting and advertisers are consolidating into national marketers. Stations have tried to bolster their Web operations and have demonstrated growth--but by and large, they still trail the local newspapers in the local-market digital sphere.

At Time Inc., Chairman-CEO Anne Moore tried to spin the spin-off properties as "good performers" on the auction block, but the latest circulation and ad figures don't tell the same story.

According to the latest FAS-FAX from the Audit Bureau of Circulations (ABC), Popular Science experienced a 10.2 percent drop in subscriptions in the first six months of 2006 compared to the same period of 2005, with overall circulation sinking 8 percent. Field & Stream fared somewhat better, with overall circulation holding steady, but newsstand sales saw a 7.9 percent drop in the same report. Outdoor Life turned in a similar performance, with subscriptions basically even and newsstand sales down 10.6 percent. And Parenting did worst of all, with a 6.1 percent drop in subscriptions and a 25.8 percent drop in newsstand sales.

Data on ad pages and revenue was equally damning. According to figures from the Publishers Information Bureau (PIB) comparing the first eight months of 2006 and the same period last year, Popular Science's ad pages fell 8.3 percent while revenue fell 11.2 percent. In the same period Field & Stream's ad pages were down 18.5 percent--while revenue was down 14.1 percent, and Outdoor Life's pages fell 13.7 percent, with a 4.7 percent drop in revenue. Mirroring its ABC figures, Parenting posted an alarming 16.5 drop in ad pages and an 11.3 drop in revenue.

At the same time, Time Inc. is also getting rid of a number of magazines targeting niche audiences, like its Marine Group, with a stable of titles including Yachting, MotorBoating, and SaltWater Sportsman, and TransWorld Media, publisher of TW Skateboarding, TW Snowboarding, TW Surf, TW Motocross, Ride BMX, and Quad. The alpine division, represented by Mountain Sports Media, is also out--taking with it Ski, Skiing, and Warren Miller Entertainment.

Samir Husni, a professor of journalism at the University of Mississippi also known as "Mr. Magazine," summed up the sale: "It's massive. They're getting rid of some very big titles, including Parenting, which has been with them a long time." But according to Husni, it's important to note the titles themselves are not necessarily mass interest publications: "Time is saying they think there's a future for the big general interest magazine, but also predicting the demise of special interest titles that are not extremely specialized." Overall, Husni said: "They're betting all the money on the old stable: Time, People--the ones with real mass audiences."

Indeed, many mid-sized special interest publications are being replaced by Internet offerings, Husni explained: "If you are looking for specific information about sports equipment or rates, for example, you can just Google it." Small magazines will continue to proliferate on a "micro-scale" for very specialized audiences, Husni predicted, but they'll never attract the attention of companies like Time Inc.: "They can survive with 5,000, or 10,000, or 20,000 circulation, but these kind of magazines cannot and will never be part of a big publishing corporation."

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