Changes Await Time Inc. as Bain Consultants Complete Review
Bain & Co.'s consultants are expected to wrap up their work at Time Inc. this month, giving CEO Laura Lang the ammunition to start making her first significant moves.
Staffers expect the near- and long-term results to include new spending on video production, partnerships or acquisitions in the digital and mobile arenas, an effort to better use data in building ad programs for marketers, attempts to expand the company's business with subscribers and a push into e-commerce.
Bain is not looking for cost cuts or considering potential asset sales, Time Inc. executives said. But the need to fund some of the new priorities might indirectly spark asset sales down the road, several employees suggested. The overall effort will ultimately help the company expand, but could "make us a smaller company" first, one publisher said.
A Time Inc. spokeswoman declined to comment on the process. A Bain spokeswoman did not respond to inquiries.
Ms. Lang announced the review in March, three months after she arrived from the digital agency Digitas, saying Bain's study of the company and the media landscape would help peg the areas where it can "double down, place big bets and get back on a revenue growth trajectory."
That would certainly make the parent company happy. "The whole goal is returning to topline growth," one Time Inc. executive said. "If you ask Time Warner what they care about, it's revenue." Time Inc. -- the publisher of major magazines including Time , People, Fortune and Sports Illustrated -- saw revenue decline 3% in the first quarter from the quarter a year earlier, hold essentially flat in 2011, slip 2% in 2010 and fall 19% in 2009.
Some staffers said they will be excited just to have a direction -- any direction. Ann Moore, Time Inc.'s CEO from 2002 to 2010, was best known to the rank and file for focusing on the bottom line, reducing costs and eliminating thousands of jobs through cuts and magazine sales. Her successor Jack Griffin only lasted five months before company veterans convinced Time Warner CEO Jeff Bewkes to oust him, creating a long vacancy at the top of Time Inc.
Now Bain, which consulted for Meredith Corp. during the recession but had no prior history with Time Inc., is working with company executives to map potential courses of action in various areas, providing alternatives for Ms. Lang and her team to choose from.
Although Bain is completing its work, however, staffers probably shouldn't expect to hear its conclusions in a big announcement soon. Ms. Lang is likely to wait for the next quarterly management meeting to start spelling out where Time Inc. will and won't focus. Some aims may not become clear until the company closes deals or takes other concrete steps.
Those steps are likely to include an effort to produce more online video, where ad rates are high but attracting large audiences is difficult. "It would be transformative if we knew how to do video that was attractive, didn't cost $1,000 per video and you could scale," another Time Inc. executive said.
Some also believe that any bid for bigger digital audiences will require investments or acquisitions, perhaps in the mobile arena. "The only way to get great digital scale is to buy something, but it's hard," the publisher said. "Mobile is still so new, there are opportunities to do deals."
"They need to put a huge stake in the ground and go buy something that gives them immediate platform and scale that 's not in the magazine business," the publisher added.
If Time Inc. needs to come up with funds for significant deals on its own, selling some smaller magazines could become very tempting, according to employees.
"There's a growing sense," another Time Inc. staffer said, "of 'What is Laura going to do?'"