My first 12 years in publishing were spent working on three of Time Inc.’s weekly magazines: Time, People and Entertainment Weekly. Many of us who worked at Time Inc. in those days still hold the memory of the company in a special place.
Last month shook those memories a bit. In the span of four weeks, TimeWarner eliminated about 500 jobs within Time Inc., explored a partial sale to Meredith Corporation and then announced a plan to spin off the magazine subsidiary later this year. I imagine that Laura Lang, the company’s second consecutive outside CEO, could file for a whiplash disability.
As it happens, she told the parent company that she wasn’t interested in staying on. Despite their best efforts, the next CEO will inherit a company fundamentally unchanged under Lang or her predecessor, Jack Griffin. Time Inc. actively resists change, and therein lies the problem.
To save the company, Time Inc.’s next CEO needs to do six things that have been more or less off the table for generations. These aren’t easy, and some are controversial. But there’s little hope for a Time Inc. that passes on these ideas:
- Lose the Vatican. Since Henry Luce, the company has made its editor in chief the nominal defender of editorial integrity. Over time, the separation of “church” and “state” became almost synonymous with Time Inc. That era was always overblown, as any history of Luce’s meddling has shown, and it effectively ended more than 20 years ago. It’s time to stop paying for a vestigial organ.
- Stop grouping magazines. If I wanted to write the world’s longest blog post, I’d recount the various ways that Time Inc. has grouped, regrouped and re-regrouped magazines over the last 20 years. The company may think Time and Sports Illustrated (SI) are “news and information”, but no one else does. As media properties, Fortune and Money are no more alike than an orange and an apple. Treating them that way muddles your thinking about the people you should care about: your audience. Save the overhead and let the magazines run their own operations.
- Scale back corporate. I worked in a corporate department, so this one strikes close to home. A corporate department has to prove its value. Magazines should be freed up to negotiate with suppliers on their own. Paper and printing are commodities, and believe me, the postal service really doesn't care who you send to lobby it these days. They have much bigger problems to solve. Even the environmental initiatives should be scrapped. That's why we have the MPA; let them carry the freight for the industry.
- Write off the legacy systems. In 2012, Time Inc. earned $463 million on revenues of $3.436 billion, a 13.5% margin. That’s weak, one of the reasons Meredith was said to be offering only $1.7 billion for all of the titles other than Time, SI, Fortune and maybe Money. Worse, in 2012 Time Inc.’s depreciation and amortization totaled $127 million. A fair share of that depreciation covers editorial, consumer marketing and operations systems built for a print magazine model. Beyond depreciation, the systems also cost a lot to run. The new CEO should scrap the lot and change processes to take advantage of cheaper, current tools that support cost-effective cross-platform content distribution and sales.
- Raise consumer prices. The cheapest offers for many Time Inc. titles are way too low. I can buy a year’s subscription to Time for $20. Short of a return to the golden age of advertising, there’s no way the print version of the magazine survives at $20. Just ask Newsweek. Yes, you’ll lose subscribers as you raise prices, and yes, it will have an impact on advertising revenues. Make the change now, while it is still under your control, before advertising is gone completely.
- Stop using the B-word. As Jeff Jarvis has argued, “Magazines have pretty much blown it now because they’ve insisted on the mass market and being brands, not community companies.” People are looking for reasons to become and remain connected to the companies they choose to spend time with. The precise strategy varies by title and content focus, but if you want to build loyalty, try investing in the things a community values.
Other things fall out of these ideas. Independent publishers will learn to partner more, both inside and outside of Time Inc. A focus on community brings Time Inc. back to the best parts of its Briton Hadden – Henry Luce roots.
And folks who don’t have to manage up all the time may enjoy an opportunity to look sideways, sharing ideas with their colleagues. After all, Time Inc. remains the only consumer magazine publisher with four national weeklies. There’s something to be learned there.
The same week that Meredith was said to offering $1.7 billion to buy most of Time Inc., Comcast bought the 49% of NBC Universal that it did not already own in a deal that valued NBC at $34 billion. There’s no denying that print is challenged, but print is not dead. Just print alone.