TV Guide is expected to become the latest Mass-circulation magazine to radically chop the number of copies it delivers, On the Money has learned.
In a move expected to be announced as soon as tomorrow, TV Guide, starting next month, will drop from its current rate base of 2.9 million down to 2 million, a drop of more than 30 percent. It follows the January lowering of the rate base from 3.2 million to 2.9, which in turn followed a massive cut in October 2005 — when it collapsed from nine million down to 3.2 million.
In the past, the mantra for magazine circulation was always more is better, but with the ad recession, many publishers are finding that with the advertising tumbling, it is not worth carrying all the cheap circulation.
Reader’s Digest, which once had circulation of 10 million, said in June that it was going to reduce its now 8 million circulation down to 5.5 million.
Time magazine had reduced its circulation to 3.2 million two years ago and Newsweek this year said it was moving in stages from 3.1 million at the end of last year to 1.5 million at the start of next year.
“I remember the days when TV Guide cost 15 cents and had 20 million in circulation,” said Steve Cohn, editor-in-chief of Media Industry Newsletter. “A lot of circulation numbers were artificially bloated through verified [i.e. unpaid] circulation or cheap subscriptions.”
In TV Guide’s glory days, the bulk of its circulation came from sales at newsstands.
Now the overwhelming majority of the circulation is mailed to homes. And with ad pages down 28 percent through the Sept. 7 issue, the advertising is no longer paying the freight.
“Are we hitting home runs? No, but we have a business model that works,” said Jack Kliger, the former Hachette Filipacchi CEO who was brought in to run the business as a consultant.
Kliger says the magazine now makes money on circulation. “It is a predominantly circulation-driven magazine,” he said. In contrast, most magazines in the United States rely on ad dollars, not circulation dollars, for the primary revenue stream. “I just said let’s focus on the highest yielding subscriptions and eliminate the lowest yielding subs.”
– Keith J. Kelly
Candy raid
Kraft is covering its bases in its hostile $16 billion bid for chocolate maker Cadbury.
When choosing which firm to advise it on strategy, Kraft did not turn to one of the larger investment banks. Instead, it retained three-year old Centerview Partners.
Why? Likely because Centerview co-founderBlair Effron for years was the main outside advisor to Hershey, Cadbury’s main rival.
For years, Effron had a strong relationship with former Hershey CEO Richard Lenny, but Lenny retired in December 2007 after having become frustrated with the Trust that controls Hershey’s voting stock. Towards the end of his tenure Hershey held unsuccessful merger talks with Cadbury without his knowledge.
Effron, 47, should be able to give Kraft advice on how to keep Hershey out of the Cadbury auction. If Kraft completes the deal, the former UBS vice chairman might also advise it on marketing Cadbury’s products in the US — which could hurt Hershey again by taking away some market share.
That would certainly be a huge price for Hershey to pay for giving Lenny and his advisor the kiss-off. Effron did not return calls.
– Josh Kosman
Bad Carol-ing
Is anyone else tired of Carol Bartz yet?
On the Money certainly is.
Like a bad singer, the Yahoo! CEO is sounding increasingly one note lately. And, what’s worse, the lone note she seems capable of hitting is to publicly trash her predecessor — that would be Yahoo! founder — Jerry Yang.
Bartz first gave Yang a brutal flogging for the corporate disorganization at Yahoo! during an interview at the D Conference in May that On the Money attended. She was at it again yesterday, this time on CNBC.
In response to a question about whether she would have taken Microsoft’s $34 per share offer for the company, one that Yang rejected, Bartz said, “Well, sure. You think I’m stupid? I mean, let me see . . . $15, $34, yeah, I think so.”
Though she didn’t mention Yang by name, the implication that he was stupid for turning down the offer was hard to miss.
But here’s the thing: Bartz seems to use her Yang-bashing as a way to deflect criticism away from herself. Indeed, some industry observers think she’s the stupid one for letting Microsoft CEO Steve Ballmer take her to the cleaners the way he did in the search deal the two companies struck recently. But why try to defend the merits of that deal when you can attack Yang?
And never mind the questions swirling around the technology industry about Bartz’s actual credibility — or lack thereof — as an Internet executive. AllThingsD’s Kara Swisher attempted to bring that up at the D Conference, but was given a stern glare that sug gested she stick to other topics lest she be publicly flogged as well.
While some think Bartz is re freshingly honest, On the Money is of the opinion that she talks loud and says nothing — other than bad things about Yang, of course. We’d rather see Bartz operate Yahoo! out of its stagnation than hear her witless quips.
In lieu of that, how about showing some decorum and shutting up when it comes to Yang? Sure he’s made some mistakes, but he also founded one of the world’s biggest and most recognizable companies, not to mention recruiting her for the job. That de serves some respect, or at the very least a simple thank you.
– Peter Lauria