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Salesforce CEO Marc Benioff and his wife Lynne sent shockwaves from New York to San Francisco on Sunday, announcing their purchase of Time Magazine, one of the world's most iconic magazines, for $ 190 million.
Now comes the difficult part: what to do with it.
Despite its illustrious history, Time is in the same situation as almost all of its peers in the magazine industry. Revenues and print subscribers are down, competition for ad dollars on the Web is fierce, and the size of the newsroom continues to decline due to regular layoffs.
Restoring the good old days, while weekly news sets the agenda for public discourse, seems to be a daunting challenge, even with the financial support and passionate support of the Benioffs. Now, industry watchers and insiders are trying to figure out exactly what Benioff has spent $ 190 million for – brand, broadcast, journalistic legacy or whatever – and what will be next version of the magazine 95 years old.
Employees inside the magazine were so thrilled by the news of the sale that they quickly made plans to roll out the old cart this week. The trick, in which a bartender moves from desk to desk mixing cocktails for newsrooms, is reminiscent of the magazine's golden age.
"A deeply pocketed customer who believes in the brand and the mission and who plans to stay out of the hair is a dream scenario," said a long-time member of the magazine. "People are really happy, there's a wait-and-see approach, which I think is fair, we have to see, we do not have a lot of specific information about what's going on, but all of that." He said was positive. " . "
People wonder if Benioff is a Bezos or a Pecker?
The Benioffs are the third-time owners of Time Magazine in a year, after magazine publisher Meredith Corporation bought Time's parent company Time for $ 1.8 billion in November 2017.
For months, Meredith made it clear that Time was up for sale, but it was less clear whether it was a buyer like David Pecker of American Media, an ally of Trump who drastically reduced his workforce after 100 million of dollars. March 2017, or if things went more like the $ 250 million acquisition of the Washington Post by Amazon CEO, Jeff Bezos, in 2013, which allowed to expand its staff and reorganize its digital offers.
Regarding the editorial, one of the staff said the team hoped to maintain its current reporting structure and hope to recruit new employees, even though the Benioffs made no particular promises.
According to a Meredith spokesperson, about 170 employees will change hands at the close of the market next month, the majority of whom are editorial.
Although many magazines have doubled the digital, there are also signs that the Benioffs intend to maintain the print magazine: as part of Time's purchase, the Benioffs signed a multi-year purchase and printing agreement, as well as consumer marketing magazine.
A likely area of investment will be video, an area in which the Benioffs have said they are optimistic about the Wall Street Journal.
"Rotate for video" is a cliché in the media industry, but Time's efforts seem to work up to now. Time's video audience grew 30.7% year-on-year compared to July 2017 and July 2018, according to the report from Media 360 magazine. During the same period, the audience overall on paper and digital decreased by 3.2%.
Events and brand licensing are also options
If the Benioffs decided to look for sources of revenue other than traditional print advertising, they could be inspired by Meredith, which boasts the world's second-largest brand licensing company.
The publisher has more than 3,000 unique products, with magazine titles such as Better Home & Gardens, sold at over 4,000 different Walmart sites and Walmart.com, according to one company. So, even though the Benioff may have bought a print magazine, they might find a lot of revenue in the name of Time Magazine.
Other magazines have been fortunate to generate revenue through events. The Atlantic, whose organization Laurene Powell Job took a majority stake last summer, has a major event division called AtlanticLIVE. In 2014, AtlanticLIVE was profitable and returned $ 10 million in revenue a year.
In the end, though, what employees and industry insiders want to see is support for Time's legacy of journalism.
"Meredith Corporation has thoughtfully found buyers who respect the trust and credibility that is so strongly associated with the TIME brand," said Linda Thomas Brooks, President and CEO of the Association for Media Magazine, in an email.
"It has been said that the Benioffs were deeply attached to the community and that they found solutions to some of the most complex problems in society and that they engaged as much as TIME. to share and debate competing ideas and journalism of the highest quality, "she added.
While Time's broadcast is down, the magazine still counted nearly 3 million weekly subscribers by the end of 2017, making it one of the most read magazines in the United States.
Revenues are expected to decrease 9 percent, from $ 173 million in 2017 to $ 158 million in 2018, according to the Wall Street Journal.
Changes include a new office and a new management team
Although things are ambiguous editorialally, operationally, time has several obstacles to overcome before becoming an independent business.
On the one hand, it takes a management team. Benioff made it clear that he would not play any operational role in the new company and that Meredith currently manages all of Time's backend processes, such as accounting and public relations.
A spokeswoman for Meredith said some of the back office employees who are fully dedicated to Time will move on to the new company. In the short term, Meredith will continue to provide certain features, such as payroll and ad sales, for the Time magazine machine to continue operating.
But for the most part, it will be up to the Benioffs to create from scratch the executive bureau and Time's administrative team.
In addition, the magazine needs a new office because the agreement with the Benioffs did not include any building.
Marc Benioff told the New York Times that the magazine's staff will remain based in New York. But if he decided to move Time to San Francisco, he could probably find room for the Salesforce Tower team.
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