Parsons Not Done Pruning Publishing Portfolio

Time Inc. to Continue to Transition Titles to Online

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NEW YORK (AdAge.com) -- Time Inc. may have just sold 19 magazines and shut down others such as Life and Teen People, but its work culling the portfolio isn't done, Time Warner Chairman-CEO Richard D. Parsons told a media conference audience in London today.
Time Warner Chairman-CEO Richard D. Parsons gave an in-depth discussion of his company's media properties today in London.
Time Warner Chairman-CEO Richard D. Parsons gave an in-depth discussion of his company's media properties today in London. Credit: AP

The publishing unit had 30-something titles when Mr. Parsons joined Time Warner a little more than 12 years ago, he said. More recently the count was closer to 150. That was largely due to acquisitions aimed at securing one or two key properties -- but which came as part of larger deals including less valuable properties.

"We hadn't gone through and really pruned the portfolio, if you will," Mr. Parsons said today. "We've sold some titles and we've closed some titles also. We'll probably look to continue to do that."

Growth won't be the same
The unit will have to continue its push into digital, of course. "Magazines are going to be around for a long time but they're not going to grow like they have in the past," he said. "If we can get these brands positioned properly online there's huge upside potential."

Digital revenue growth actually offset the publishing division's offline declines for the first time last year, Mr. Parsons said. "I think it can be an 8%, 9%, 10% growth business for a long time if we successfully complete the transition to online."

There's work left to do at the cable networks too, both on TV and online. "So far most of the focus has been on the Cartoon Network and CNN, with a lot of success," Mr. Parsons said. "We're still thinking about how to make TNT and TBS more online-friendly." The trick there, until TBS and TNT build out their original programming further, is making a web play out of channels that primarily show movies and syndicated repeats.

Worried about CNN
"I'm going to say something I shouldn't say," Mr. Parsons offered. "I worry about CNN more now than I do about CNN.com."

Time Warner has different priorities for its cable business, namely the development of ad-supported video on demand for network programming. Mr. Parsons said Jeffrey Bewkes, Time Warner president-chief operating officer, is off on a kind of "one-man jihad" to persuade content providers to join the company in developing a network VOD model. "I'm pretty confident we're going to succeed in this," he said.

Electronic downloading is coming to the movie business too, Mr. Parsons said, endorsing the concept of simultaneous release of films in theaters and online. "Everyone's afraid it's somehow going to upset the 800-pound gorilla, Wal-Mart. We don't think so. We think and what we've shown in some of our trials is the video on demand can help increase sell-through as well as change the economics dramatically for the studios."

Wal-Mart believes, plausibly, that on-demand and digital-download movies released near the time of theatrical or DVD release will hurt DVD sales.

"It will be a cold day in hell that I would actually get up from my apartment to go to the video store," Mr. Parsons added. "I've never actually been in a Wal-Mart."

AOL
Time Warner's chief said, as he has before, that AOL's transition from a subscription service to a free one is going well -- so far. "I think by the end of this year we'll be in a place where we can make the call on AOL."

The company's cable interests, and the cable business more broadly, will see a lot of activity over the next 18 to 24 months, he predicted. The field is going to continue to consolidate, a process in which Time Warner wants to participate -- just without overplaying its hand. "To the extent that we are able to build a bigger, stronger, more robust cable company, we probably wouldn't increase our financial exposure to the space but would own a smaller piece of a bigger company."

Mr. Parsons' talk at Merrill Lynch's U.S. Media Conference in London was streamed live online.
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