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Time Inc. cutbacks

Discussion in 'Journalism topics only' started by spnited, Jan 15, 2007.

  1. spnited

    spnited Active Member

    Some interesting stuff here, including a little from Terry McDonnell about SI on the net, from this morning's NY Times

    As Time Inc. Cuts Jobs, One Writer on Britney May Have to Do
    People magazine’s article this week on Britney Spears and her “new guy,” model Isaac Cohen, is five paragraphs long. It was reported and written by seven people.

    To be fair, they were long paragraphs. But with layoffs expected this week at Time Inc., which publishes People, such reporter-heavy treatment is headed the way of Kevin Federline, Ms. Spears’s soon-to-be-ex-husband.

    Time Inc., the publishing division of Time Warner, is planning to cut more than 150 people, about half of them in editorial jobs across the company’s best-known titles, like People, Sports Illustrated, Time and Fortune. The cuts follow about 600 last year, many of them from the company’s business side, and a decision to trim its roster by selling 18 of its roughly 150 titles.

    Time Inc.’s top executive, Ann S. Moore, has not yet publicly outlined or discussed the cuts, and she declined to be interviewed for this article. But other executives said that, while Time Inc. remains profitable, with margins of about 18 percent, it is witnessing a downturn in print advertising revenue and increasingly fierce competition from the Internet.

    To prepare for the future, they said, the company is cutting costs now and continuing to shift resources to its branded Web sites.

    That in turn is prompting big changes to the standard newsweekly formula of many correspondents contributing to heavily processed articles at magazines like Time and People.

    Time Inc. is taking other steps to save money. Within a year or two, most of the company’s corporate offices and magazines at the Time-Life Building in Midtown Manhattan will have moved to lower floors so that the more valuable upper floors can be leased out. Time magazine is shutting some of its bureau buildings overseas, including in Paris, although it expects to maintain “laptop” correspondents, who can work from home.

    “They’re amputating in order to save the patient,” said an executive at a competing publishing company.

    Time Inc.’s challenges mirror those of the publishing business broadly: its strong brands generate plenty of cash and profit, but have not been growing, a profile that is highly unpopular on Wall Street these days. But, while its biggest competitors, Condé Nast Publications and the Hearst Corporation, are privately held, Time Inc. is part of a publicly traded conglomerate with big holdings in television, film, cable and the Internet and is on a mission to prove itself to restless investors.

    Time Inc. still has nearly 11,000 employees worldwide and it is hiring more people at its Web sites, but its overall fate is unclear. When Carl C. Icahn, the financier, waged a brief assault on Time Warner last year, he said the publishing division was ripe for sale or a spinoff because it does not fit with the company’s other businesses.

    For now, Time Warner’s president, Jeffrey L. Bewkes, and its chief executive, Richard D. Parsons, have said they intend to keep Time Warner whole. Despite its journalistic legacy and its position as the largest magazine publisher in the country, Time Inc., with annual revenues around $5 billion, is now the baby in the Time Warner family, which has annual revenues of more than $42 billion. In both revenue and profits, it was the smallest of the company’s five operating units in the first nine months of 2006, generating 11 percent of revenues and 8 percent of adjusted operating profits.

    Advertising has been down for many magazines, in part because of troubles in the auto industry and a slump in financial services. Ad pages at several Time Inc. publications dropped last year, compared with 2005: Fortune, down 6.4 percent; Money, down 9.6 percent; People, down 2.9 percent.

    The good news: Time magazine held its own, with ad pages up 0.8 percent, propped up by the pharmaceutical industry. Other Time Inc. magazines did well enough so that the total for all the company’s magazines was flat, not down. In this environment, one company executive said, “flat is the new up.”

    Even People magazine, arguably the most successful magazine in history, is in for an overhaul, one guided in part by consultants from McKinsey. People remains by far the nation’s dominant celebrity magazine, with a weekly circulation of 3.8 million and more ad pages and revenue than any other magazine for the 16th year in a row. But some of its competitors, chiefly US Weekly, are growing faster.

    People has one of the last vestiges of the classic newsmagazine reporting structure, in which several correspondents send files to a writer in New York, where stories are fact-checked by yet another department. The new model, which is standard at most news organizations, will be for one person to report, write and fact-check the article — much as Simon Perry, the London bureau chief, did with People’s take this week on Kate Middleton, Prince William’s girlfriend.

  2. spnited

    spnited Active Member


    Larry Hackett, managing editor of People, said the new reporting model would not preclude putting several correspondents on one piece when the news warrants it, as it often does these days with the peripatetic Ms. Spears. But he said the changes would result in better journalism. Reporters are eager to craft their own articles and writers eager to do the original reporting on theirs, he said. More important, if one person is in control of the information, he or she can move it faster to the Web.

    “We know there are cost pressures at Time Inc.,” he said. “But the changes we’re making aren’t to cut staff because we want to put out People on the cheap. I believe firmly and completely that this will yield better journalism, better career opportunities and more accountability.”

    Last summer, Time Inc. shut down Teen People, which was losing advertising, but kept it alive online. The move was part of a broader decision by the company to pare its print portfolio and build what it sees as its six core strengths on the Web: news and information; celebrity and entertainment; sports; business and finance; home and food; and health and fitness.

    It also put up for sale the group of smaller niche magazines, including Popular Science and Field & Stream, which the company did not expect would become big draws online. Ms. Moore, the chairman and chief executive of Time Inc., wrote in a memo last year that those magazines no longer fit the company’s strategy.

    “I am confident that the biggest brands in print, with our expertise and support, will develop into the biggest brands online,” she wrote. Ms. Moore, the former People magazine president, who is 56, assumed her current job titles in 2002. She is in the first year of a new three-year contract, and she has told associates this stint will be her last before she retires — and has said that her goal over the next two years is to restore the business’s growth and solidify its position online.

    At an annual retreat for senior Time Warner managers in late November in Malibu, Ms. Moore was the featured speaker among all of the company’s division heads, arguing that the company is progressing after unwinding a relationship last year under which most magazine content was being distributed online via AOL.

    Her presentation featured charts that showed that Time Inc.’s titles ranked highly in competitive online categories — like celebrity news, with people.com, and financial news, with CNNmoney.com — and commanded increasing advertising rates. According to executives who attended, Ms. Moore said that at Sports Illustrated, for example, digital operations would account for 13 percent of profits in 2006 and are projected to rise to 18 percent this year.

    Terry McDonell, editor of the Sports Illustrated group, attributed the growth in part to programs that allow users to customize the Web site, and receive constantly refreshed news and pictures of their favorite teams. The pending cuts, he said, stem from a further melding of print and digital, with almost all print writers and photographers producing original material for the Web. “It’s all about being more efficient across all the platforms in the S.I. group,” Mr. McDonell said.

    For the company, the focus on the Web may have come at the expense of new start-ups. In 2004, Time Inc. started four new titles, but it has not had a major new success since 2000, with Real Simple. A new humor Web site last year, officepirates.com, quickly fizzled. Fortune is also wrestling to contain costs while Conde Nast is pouring money into its new business magazine, Portfolio, due in April.

    For all the changes at Time Inc., analysts said that investors were focused mainly on the performance of Time Warner’s cable unit and AOL as businesses that could drive up the company’s stock price. In the past year, Time Warner shares have risen 30 percent after a prolonged slump, due in part to a huge stock buyback by the company, a new strategy at AOL and the consummation of the company’s $13 billion acquisition of Adelphia Communications’ cable assets.

    Michael Nathanson, a media analyst who follows Time Warner for Sanford C. Bernstein & Company, said that the question for investors was whether Time Inc. could resume growing its operating earnings at between 5 percent and 10 percent per year.

    “Time Inc. only matters to the Time Warner investor if it’s sold or if they can get the profits growing in line with the rest of the content assets,” Mr. Nathanson said. “I think they’re on the path for the latter.”
  3. boots

    boots New Member

    This does not end well, I guarantee it.
  4. Do you mean the business as a whole?
  5. boots

    boots New Member

    Yes. When Times Inc. sneezes, many publications are admitted to hospitals. I'm an optimist but also a realist. I don't like hearing this, especially just a few days into the new year. Not a good sign at all.
  6. Pringle

    Pringle Active Member

    It's gut-wrenching, really. When you're a young person and you decide that you have found a field you love, something that's in your blood, you're so idealistic, you just pursue it with no doubts that this is what you want to do with your life. It was such a terrific feeling - having things together while many around you floundered to figure our where they were headed in life.

    Then to have it slowly and painfully taken away from us ...
  7. boots

    boots New Member

    Yes, it is beyond gut wrenching. It's FUBAR (fucked up beyond all recognition).
  8. Does it really take seven people to report a five-paragraph item?
  9. boots

    boots New Member

    Apparently so.
  10. Too many cooks must be spoiling that broth.
  11. e4

    e4 Member

    Wasn't this the mentality that got the NYT in trouble with Blair? More accountability if you F up, but no one checking to see if you are Fing up, intentionally or otherwise...
  12. Ben_Hecht

    Ben_Hecht Active Member

    Blair situation was Howell Raines' doing . . . a specific sociological makeup, not wanting to see what was one inch in front of his face . . .
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