Big Publishers Shed Media Assets
Two of America's most powerful publishing companies Tuesday announced plans to shed major assets to better position their core offering for the future. But the divestiture strategies revealed by The New York Times Co. and Time Inc. are pursuing markedly different paths. The Times Co. said it was getting out of the broadcast business, while Time Inc. said it would pare its consumer magazine portfolio by 18 publications, including some classic print titles such as Popular Science, Field & Stream and Outdoor Life, as well as its Parenting Group, while the Times Co. will divest its entire broadcast TV operation, including nine network affiliated local stations in order to focus on its newspaper and digital operations.
The Times Co. owns a duopoly in Oklahoma City; four CBS affiliates, located in Memphis and Norfolk, Va.; and two each affiliated with ABC and NBC. The company said it expects the station group to post $150 million in revenue this year. Last year, it accounted for 4 percent of company revenues.
The local station business is no longer the cash cow it once was. Audiences are fragmenting and advertisers are consolidating into national marketers. Stations have tried to bolster their Web operations and have demonstrated growth--but by and large, they still trail the local newspapers in the local-market digital sphere.
At Time Inc., Chairman-CEO Anne Moore tried to spin the spin-off properties as "good performers" on the auction block.
According to the latest FAS-FAX from the Audit Bureau of Circulations (ABC), Popular Science experienced a 10.2 percent drop in subscriptions in the first six months of 2006 compared to the same period of 2005, with overall circulation sinking 8 percent. Field & Stream fared somewhat better, with overall circulation holding steady, but newsstand sales saw a 7.9 percent drop in the same report. Outdoor Life turned in a similar performance, with subscriptions basically even and newsstand sales down 10.6 percent. And Parenting did worst of all, with a 6.1 percent drop in subscriptions and a 25.8 percent drop in newsstand sales.
Samir Husni, a professor of journalism at the University of Mississippi also known as "Mr. Magazine," summed up the sale: "It's massive. They're getting rid of some very big titles, including Parenting, which has been with them a long time. And if you are looking for specific information about sports equipment or rates, for example, you can just Google it." Small magazines will continue to proliferate on a "micro-scale" for very specialized audiences, Husni predicted, but they'll never again attract the attention of companies like Time Inc.
I'm really becoming interested in what the Canadian networks take or response to all this is? No, really...I am.