“When the dust settles”

Poised to emerge from its second bankruptcy in less than four years, RDA Holding Co., the parent for Readers Digest, sees a bright future. As Michael Rondon reported in Folio:

RDA is now set to emerge from Chapter 11 in late July with about $100 million in debt. That's down from around $500 million at the time of the latest bankruptcy filing and $2.1 billion less than the first time around. Robert Guth, president and CEO of the company since late 2011, has been orchestrating a strategic turnaround against that backdrop, betting on discipline and exclusivity to stabilize the 91-year-old name brand. He says the company will return to profitability next year.

There is good news in Guth's plan: unprofitable circulation is being cut at Readers Digest, and the company is repositioning itself to focus on subscription revenue. The company is also talking about investing in its core product, with a redesign planned for "late 2014".

As Guth notes, "When the dust settles, we're going to be a quarter of the size we were two years ago. And you don't go through all that without some amount of change." I just wonder if the dust will ever settle.

I've been writing about RDA for almost as long as I've been posting, and the news has never been good. The history is telling:

Admittedly, it's easy to be a sideline pundit, and I hope RDA makes a go of it this time. Reader-focused strategies are good things, even if they take time and investment to grow roots.


About Brian O'Leary

Founder and principal of Magellan Media Consulting, Brian O’Leary helps enterprises with media and publishing components capitalize on the power of content. A veteran of more than 30 years in the publishing industry and a prolific content producer himself, Brian leverages the breadth and depth of his experience to deliver innovative content solutions.

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