Time Inc. reported financial results for its second quarter ended June 30, 2017. Time Inc. President and CEO Rich Battista said, “I am pleased with our second quarter Adjusted OIBDA of $88 million, which was roughly flat year-over-year. Our revenues continued to be impacted by disruption through the first half of 2017, as we said on our last call. Despite that revenue disruption, we executed in a highly disciplined way, which enabled us to beat Adjusted OIBDA expectations. The third quarter represents an important turning point for the Company as we are seeing strong momentum and sequential improvement of year-over-year trends for total advertising revenues. Today, we are reaffirming our 2017 Adjusted OIBDA outlook.” Battista continued: “On our last earnings call, we outlined aggressive actions—building on what we had accomplished to date—to reduce costs, expand margins, rationalize our portfolio and extend our brands into new growth revenue streams. We’ve been moving with speed and, most significantly, we are announcing today, a strategic transformation program based on a thorough review of Time Inc.’s business. Through this review, we have greater confidence in our path to accelerate the optimization of costs and revenue growth drivers. We have already targeted more than $400 million of run-rate cost savings, with the majority of initiatives expected to be implemented over the course of the next 18 months. Click Read More below for additional detail.
One truism of the media industry in 2016 is that there’s seemingly no end to the restructurings and reorganizations that are swiftly remaking companies across the publishing landscape. That’s particularly true for magazine companies, which are starting to acknowledge the reality that their competition now also includes digital-native companies and social giants like Facebook and Snapchat.
“I think it is now taking on the level of urgency that you feel when you see the sea water beginning to seep under the door of your cabin,” said Rob Gregory, who served as publisher of prestige brands like Rolling Stone and Men’s Health magazines.
Just last week, Condé Nast announced plans for a company-wide group that would bring together creative, art, design and photo staffers from the company’s individual brands.
Staffers working as copy editors and researchers are also being lumped together as a separate team, though brands will still have staffers assigned to work on them. Those people will generally be the same people who previously worked directly on the brands.
Condé Nast would not make executives available to discuss the scope or impact of the change. According to an individual with knowledge of the situation, the streamlining will result in some staff “duplications,” but there will also be new people brought on.
Time Inc. is also undergoing changes, though nothing as drastic as what’s happening at Condé Nast, according to a Time Inc. employee, who said the company’s magazines still largely operate independently.
The big change at Time Inc. occurred when the company moved to a sales structure based on categories, rather than on the individual brands. That change, according to Time Inc. staffers, has had big implications for the company and the way content is produced. With a topic-focused sales structure, it makes more sense to produce content — across brands — that can be placed in buckets like finance and travel. On the sales side, Time Inc. has also phased out the publisher role.
The company, under the direction of new chief content officer Alan Murray, is looking for ways to be more strategic about the editorial content it produces. As the thinking goes, there’s no need for two brands to produce the same piece of content when instead it could be created by a dedicated team and syndicated to multiple, like-minded brands.
Early last year, Time Inc. instituted what was originally known as a “pub desk” for like-minded brands Time, Fortune, and Money, though the degree of cooperation between the brands has ebbed and flowed. This desk, and the staffers assigned to work on it, were tasked with working fast and producing quick hits, sometimes by aggregating content from other publications. According to a former employee, some staffers were frustrated that getting shifts on the desk took them away from the work they were hired to do. Some of these staffers chose to eventually leave the company, the individual said. These days, though, the brands are now hiring more specifically to fill those roles.
“They knew that they had much larger competitors beating them at the traffic game,” a Time Inc. employee said of the idea behind the desk.
Fortune and Time magazines, which have since split up their rapid news desks, are once again moving to a joint structure, according to multiple individuals.
Mr. Murray, in a memo obtained by Ad Age, announced plans for 10 digital desks that seem to have taken inspiration from this pub desk “experiment,” as one person called it. But Time Inc. would not make Mr. Murray, who continues to edit Fortune, available to discuss the desks and any similarity to what has already been done.
He also announced plans for “multi-magazine hubs” that will centralize design, layout, and copy editing, in the same way that newspapers like The New York Times are creating desks dedicated to the production of the print newspaper. These hubs will also likely have staffing implications, as there are likely to be some employees no longer needed.