Time Inc. Tells US Newspapers – “It’s No Longer Appropriate To Continue LIFE As A Newspaper Supplement” – Admitting The Newspaper Business Is No Longer Worth The Risk

A company statement didn’t mince words on its negative views on the newspaper world. “While consumers responded enthusiastically to LIFE, with the decline in the newspaper business, and the outlook for advertising growth in the newspaper supplement category, the response was not strong enough to warrant further investment in LIFE as a weekly newspaper supplement.”

Chairman and CEO Ann Moore said she recognized that growth requires taking risk, but she has clearly decided enough is enough.

Some 103 newspapers with a circulation of 13 million carried LIFE as a weekly Friday supplement. But the revenue and pages are down this year, and in today’s magazine world show almost any weakness and you get shut down. In LIFE’s case, revenue is down some $2 million in March versus a year earlier – a 9.2% drop – and its pages are down 21.3%, according to the Publishers Information Bureau. LIFE, one of the great historic titles in Time, Inc.’s stable therefore is banished, from April 20, to Internet-only activities.

ftm background

Two Trends For Magazines, -- Show Any Weakness And The Publication Is Consigned To The Internet Only Or Worse, And The New Buzz Word is Video
With all the bad news about magazines closing, or being consigned just to the Internet, the surprising news from the Magazine Publishers of America is that in 2006 some 262 magazines were actually launched – that’s a 2% increase over the year before. But what the figures don’t say is how really tough it is out there these days.

Celebrities Are Now Finding It’s Much Easier To Keep The Media At Bay With Privacy Law Suits Rather Than Cumbersome Libel Proceedings, And That Is Changing The Face of UK Tabloids
Princess Caroline of Monaco’s name will go down forever in European media privacy law for setting a precedent that basically says we are all entitled to a private life without media intrusion in addition to our public life. UK courts have been expanding upon that to the point that tabloid editors believe the end of “kiss and tell” is upon us.

Faster Than You Can Say ElleGirl, Cargo, or Celebrity Living, Magazines Are Killed; Quicker Than You Can Say Time Inc. and Staff Are Fired And Now The Final Indignity – Internet Advertising Will Surpass Magazine Advertising This Year
The US magazine industry went into shock earlier this month when Hachette Filipacchi Media killed ElleGirl. Paid circulation was up 20% over 12 months, ad pages were up 50%, but this was a magazine targeted at teen girls. And teen girls look more at the Internet than they do glossy paper, so after its May issue ElleGirl , with its 500,000 paid circulation, becomes only ElleGirl.com for free.

With Major US Magazine Publishers Time Inc. and McGraw-Hill Making Savage Job Cuts The Signals Are Clear – The Difficulties Magazines Faced in 2005 Are Just a Taste of What to Expect in 2006
So much attention has been focused on newspaper circulation and advertisement woes that magazines seemed to have slipped under the radar, but with advertisers forecasting they will cut back on magazine advertising more than newspapers, and circulation at a basic standstill for most subject matter, the largest US magazine publishers have started to cutback.

French Presidential Hopeful Sarkozy To Sue Media For Revealing Lover’s Identity
The French love their sex scandals, but the media has to be very careful how it goes about reporting such because France has some of the world’s tightest laws guarding privacy. And Presidential hopeful Nicolas Sarkozy and his lover believe the media stepped over the line when her identity – a journalist at Le Figaro but we can’t say who – was revealed by some media.

LIFE’s impending print departure is just one more sign of the malaise affecting the newspaper industry. FTM wrote last week how the February advertising and revenue numbers were “awful” and there now seems to be some disquiet in the newspaper world that February is not a one-off as many publishers have implied, blaming bad weather and the like, but rather that February is the start of really bad numbers that will grow progressively worse during the year. Too much newspaper advertising is finding its way to the Internet, and it is now really biting.

The New York Times review of the numbers quoted Barry Parr, media analyst at Jupiter Research lamenting, “There is absolutely no question that the next 10 years are going to be really bad for the newspaper business. This is a time of wrenching change and chaos. All of our assumptions about newspapers are going to be changed. The format, the business model, the organization of newspapers have outlived their usefulness.” The good news in that quote is that at least he believes newspapers will be around for the next 10 years.

Pretty strong as that quote was, even stronger is a quote attributable by the O’Reilly Radar web site to San Francisco Chronicle editor Phil Bronstein, who allegedly told his staff recently that the news business “is broken, and no one knows how to fix it and if any other paper says they do, they’re lying.”

And the web site asks the question that gives many newspaper publishers nightmares these days as opposed to just a few years back because they are no longer sure of the answer. “If your daily newspaper went out of business would you miss it?” Well, would you?

Warren Buffet, the world’s second richest man next to Bill Gates, has made clear for several years now that he thinks anyone thinking of buying into the newspaper business should basically have his head examined (he was a bit more polite than that but it was the basic message) but that isn’t stopping several billionaires from surrounding the Tribune Company

Tribune, following a six-month review of how it should go forward, is said to be torn between a plan to regroup itself internally called the “self-help” plan, or to accept an offer from Chicago billionaire Sam Zell worth around $33 a share structured around an employee stock ownership plan (ESOP -- there are tax advantages doing it that way) and the total deal could be worth around $8 billion.

That has two Los Angeles billionaires, Ron Burkle and Eli Broad, real angry because their own bid for the company, valued a bit less, does not seem to be finding favor, but they claim Tribune gave confidential information to Zell to allow him to make the ESOP proposal and they say they want the same information so they can make a similar type of bid.

Tribune has said it wants to complete its review by the end of this week, but if Burkle and Broad howl loud enough, shareholders could demand that the board await their new offer since the board has a duty, if it is going to sell the company, to do it at the highest price possible.

With all the negative talk about the newspaper industry, it’s possible we could be treated to watching two billionaire groups fighting it out for Tribune. But remember, one reason billionaires become billionaires is because they don’t put up very much of their own money at risk. In Zell’s bid, he puts up around $300 million, and in the current Burkle and Broad bid their capital investment is around $500 million. The other $7 billion plus gets borrowed.

That may all be good for the shareholders but pity the poor Tribune staff. With so much debt being taken on that has to get paid back somehow, ESOP tax advantages or not, you know at the end of the day that the cost cutting will hit with a vengeance.

The very fact Zell is involved is an indication of how depressed he believes Tribune is, but the fact he is interested indicates he believes there could be much better times ahead. Kind of makes one ask what he knows that that the rest of us don’t, but it should not be forgotten that he gave himself the nickname “Grave Dancer” because much of his business empire is founded on buying businesses when they were really almost in the grave and then building them up again.

Which does, of course, beg the question of how close Zell believes Tribune is to the grave?

Further Complicated: Advertising, Children and Television NEW

The State of the Print Media in the World

Time Inc. Tells US Newspapers – “It’s No Longer Appropriate To Continue LIFE As A Newspaper Supplement” – Admitting The Newspaper Business Is No Longer Worth The Risk

Time Inc. is still busy putting its house in order and seems to have concluded that newspapers are in even worse shape than magazines. Proving the point, it is shutting down its LIFE Magazine weekly newspaper supplement in April.