It's official: Time Inc. has not found a buyer -- and is no longer considering offers. In an announcement that put a cap on months of speculation over who would buy the publishing giant and when, Time Inc. said Friday morning that the "Company will continue to pursue its strategic plan."
The magazine group, home to brands including Sports Illustrated, People and Time, outlined said strategic plan in corporatespeak that veered from predictable to scary. As any good publisher plan would, it calls for an emphasis on video and "continued growth in digital audiences and digital revenues." It also promised "selective portfolio rationalization" and "continued aggressive reengineering of the cost structure of the Company."
These are trying times for magazine publishers. Magazines' print ad revenue, still a crucial source of revenue for the industry, will decline 2% to $12.4 billion this year, according to a recent forecast from eMarketer, and slip another 0.5% next year.
Ad Age spoke briefly this morning with Time Inc. CEO Rich Battista and Chief Operating Officer Jen Wong. Excerpts lightly edited:
What does it mean in plain English that the "Company will continue to pursue its strategic plan?"
Battista: This management team came into place September, October. We've been executing on a very exciting plan where digital is a centerpiece of the company. We've had a tremendous growth in digital audiences and that has led to tremendous growth in digital revenue. How do we take these titles and expand into all new platforms and arenas where we can generate new revenue and opportunities? This company has largely under-exposed its brands. Really this company has made print magazines and not done a whole lot more.
So what does that look like? Are you launching more verticals? Digital-only titles? Or going deeper in digital with pre-existing titles?
Battista: It's a combination. We have amazing brands with scale with loyal audiences doing gangbusters in digital. We've seen fantastic growth for our core brands. We've cracked the top 10 in the U.S. in digital audience rankings for the first time. What's important to note is we're taking these brands into new arenas: We have three Snapchat channels. People, Entertainment Weekly and Essence. People has been there since day one. These are huge platforms for us. We're seeing tremendous audiences. I've got 16- and 17-year-olds now engaging with the People brand. There's real advertising revenue going against that.
One of the companies most widely rumored to be looking to buy Time Inc. was Meredith. What happened there? What else were you guys dealing with?
Battista: There were multiple expressions of interest across several companies. We can't comment on who those companies were. Our board, as any good board does, reviewed those. At the end of the day they were excited about continuing with our plan.
What does "selective portfolio rationalization" mean? Are you folding titles? Spinning any off?
Battista: I wouldn't say that. We have a full set of brands and I think focus is key. We're going to look at the portfolio and if there are assets we believe are not core were going to look at these interesting opportunities.
And "continued aggressive reengineering of the cost structure of the Company?"
Battista: What we want to do is sustain the margin of the print business as we reinvest in digital and grow the overall company. Part of that is really reimagining what these brands can be in terms of growth and in terms of the core product.
That sounds like layoffs.
Battista: I wouldn't characterize it as that. We are going to look at the whole company holistically and where we have opportunities to re-engineer the costs.
Talk about video.
Battista: We are selectively strategically launching now brands where we think we can play well. Six months ago we launched a food vertical, Well Done. In one month we had 130 million views. We launched an OTT network with People and Entertainment Weekly brands. We're not in the over-the-top space. It's a huge opportunity. If you think about where the cable networks were in the 1980s, that's where we think OTT is now.
Your announcement touts your data capabilities. You acquired giant, the former MySpace. You've got Adelphic, a programmatic DSP. What's the pitch there?
Wong: We think that makes us really unique as a company. We now have premium brands and content and sophisticated data targeting all under one roof. That's really unique and we think that positions us really well. It provides the marketers with the two things they really want.
What did you think of recent reports that Google and others might be putting ad blockers in their browsers?
Battista: Adblocking is something that we're obviously against as publishers. In terms of Google, I don't really want to comment.
A year or so ago you switched from selling ads by title to selling by category, across all titles — with mixed results.
Battista: We are excited about the switch in that we really believe it's the right way to be set up. We have tweaked it a bit and adjusted it. But any time you do a massive restructuring, it's a bit like ripping off a band-aid: You're going to have some disruptions.
What's the latest there?
Wong: Advertisers are looking for fewer, deeper partnerships. We can go to partners now with our whole portfolio and that's really serving us well in terms of being able to do bigger deals. We provide insights and expertise for our partners.
Battista: We think we're unleashing the scale of the company in a more effective way. If you think about it we used to be 25 siloed companies and 25 different brands. They would each go into advertisers and they were trying to sell banner ads on their web sites. It's just more exciting if we can go to our partners with a wide array and massive distribution.