Time Warner Will Hang On To Its Magazines After All, Spin Off Publishing Business
Just a few weeks ago, it was looking pretty certain that Time Warner was going to sell off many of the magazine titles under the Time Inc umbrella, with Meredith a prospective buyer. Now the decision has come down to instead turn Time Inc into its own, separate, publicly-traded company, which will give Time Warner the freedom to focus on its broadcast and film business. With the resolution, Time’s head Laura Lang, who’s only been in the position for 14 months, will leave her post.
According to The New York Times, the issue became Meredith’s willingness to purchase titles like Time and Sports Illustrated, which were once hot commodities, but are now feeling the same pinch that many in the publishing industry are feeling. The continued growth of digital subscribing and online news is eating away at the profitability of traditional magazines and other media.
And on Time Warner’s quarterly spreadsheets, the publishing titles are bringing down the overall numbers, with the cable business showing an increase in the last quarter while the magazines fell.
The big transition will take place by year’s end. Reuters obtained an internal memo in which Time Warner’s CEO Jeff Bewkes commented that “change can be unsettling,” foreshadowing some of the discomfort that Time’s employees could be feeling in short order.
The New York Post already has quotes from “insiders” who say that people are nervous. They also have word that a big part of Lang’s decision has to do with Bewkes lack of confidence in her ability to turn the fortunes of the publishing arm around. Some of these other “insiders” say Bewkes doesn’t like the publishing industry and lacks direction himself. Well, that sounds like a bad workplace situation.
Time Inc will still be the largest magazine publishing company in the world with $3.4 billion in revenue in 2012, down 6.6 percent from 2011. We’ll still wait to see how this impacts some of our favorite titles including People, InStyle, and Essence.