MBR Conference: Publishers Talk SIP, Bookazine Opportunities
Publishing executives with a wealth of experience in newsstand special interest publications (aka bookazines), from Bauer, Condé Nast, Centennial Media, and Topix Media Lab, shared insights about the editorial, distribution and promotion dynamics involved in maximizing the retail success of this growing, profitable product segment.
More on AMI's Buy of Bauer Celeb Titles
NY Post: "With a deal estimated at $80M, embattled American Media Inc. Chief Executive David Pecker has managed to turn the world of glossy celebrity magazines on its head. By buying In Touch, Life & Style, Closer and nine teen titles from Bauer Publications on Friday, Pecker has tightened his grip on the celebrity magazine category. AMI already owned Us Weekly, purchased a year ago for $100M, adding to a stable of magazines that includes the National Enquirer, Star Magazine and OK!, as well as several smaller supermarket tabs. AMI will now sell more than 1M celebrity magazines a week on newsstands, the company said... [Despite double-digit newsstand unit declines], both Bauer and AMI have continued to invest in the marketplace and we believe there is still terrific opportunity to grow newsstand revenue,' Pecker said in a statement. The sale is a sign of continuing consolidation in the magazine world. In the past year, Meredith bought Time Inc. for $2.8B, Hearst picked up Rodale for over $210M and Wenner Media slimmed down, with Rolling Stone going to Penske Media and Us Weekly and Men’s Journal to AMI. With Bauer’s titles, AMI now owns every large-scale celebrity magazine except Meredith’s People, the No. 1 title in the market. Meredith obtained the title when it bought Time Inc. in January. 'AMI’s new-found scale in the celebrity category will pressure-test Meredith’s ability to sustain People’s leadership position in the unfamiliar world of celebrity weeklies,' said Peter Kreisky, a media industry consultant. Meredith says it is not concerned. 'People magazine is by far and away the leader in the celebrity category by every measure,' said a spokesman. 'In fact, the recent Royal Wedding issue of People sold more copies on newsstand than all of the other celebrity titles combined.' The sale, which includes J-14 and Girls’ World and is expected to close by July 1, was a stunning turn for Bauer, which is owned by a German media giant that had never sold anything since its arrival in the US in the late 1980s. The deal cuts down Bauer to a three-title company in the US: Woman’s World, First for Women and Soap Opera Digest. While the sale price of the Bauer titles was not disclosed, sources pegged it at roughly $80M. Any such sale with a price tag of $84.4M or higher would require a lengthy regulatory review under the Hart-Scott-Rodino antitrust laws. '[That] was not an issue,' said an AMI spokesman. To do the deal, AMI got bridge financing from its two main stockholders--Chatham Asset Management, and Leon Cooperman, head of Omega Advisors. It is expected to announce a refinancing of its existing debt after the deal closes. Pecker, a longtime friend and booster of President Trump, has been the subject of some controversy recently for his company’s practice of so-called 'catch and kill' stories in the National Enquirer. The company is said to have paid $150,000 to Karen McDougal for her story about her affair years ago with Trump. The story never ran."
Real Simple Launches Cooking School
Release: Meredith has launched a multiplatform Real Simple Cooking School, building on the success of the brand's Facebook Live cooking videos, which currently reach an average of 85,000 viewers each week. This launch includes a monthly live cooking show hosted by Real Simple food director Dawn Perry on Facebook, a hub with all the recipes and videos on RealSimple.com, a dedicated Facebook Group in which members engage with each other by sharing recipes and tips; Instagram; and a rebranded print section.
Maine Magazine Finds New Owners
Folio: "Six weeks removed from the emergence of sexual harassment allegations against former owner and publisher Kevin Thomas, Maine magazine has been sold. State 23 Media, a group of investors led by Esteem Media founder Adam Japko, announced Wednesday that it has acquired the monthly title and its related assets, including Maine Home + Design and Old Port magazines, from Maine Media Collective, the company co-founded by Thomas in 2006. Terms of the deal were not disclosed. “We’re confident Adam and his team’s experience and expertise with national and local media properties will propel our business forward and allow us to continue making a positive impact on the state we love,” said publisher and CEO Andrea King, who will remain in the same role at the newly formed State 23.King said she was “stunned” in late April when former Maine Home + Design art director Jessie Lacey accused Thomas of making unwelcome sexual advances in 2010 and subsequently bullying her into leaving the company.Lacey’s Medium post—as well as an article in local magazine The Bollard in which she and other current and former employees elaborated on what they called a “toxic atmosphere” fostered by Thomas, former editor-in-chief Susan Grisanti (who left the company in 2016), and CFO Jack Leonardi—forced the company to cancel an upcoming event after losing sponsors and elicited both a resignation from Leonardi and a vague and non-committal open letter from King about “maintaining a positive, inclusive, and respectful company culture.' A day later, King released a follow up statement calling the allegations “serious and of great concern” and acknowledging that the company was pursuing a transfer of ownership. Thomas has since apologized for “lines that were crossed,” but maintains that any contact with Lacey was consensual.... A day later, King released a follow up statement calling the allegations “serious and of great concern” and acknowledging that the company was pursuing a transfer of ownership. Thomas has since apologized for “lines that were crossed,” but maintains that any contact with Lacey was consensual"...
Penske Media Hires Operations Exec
WWD: PenskeMedia, "owner of WWD and Fairchild Fashion Media, along with Variety, Deadline and now a majority of Rolling Stone, among almost a dozen other titles, has brought on Tom Finn as its SVP and general manager of operations. Finn has more than two decades of experience in media, mainly in film and television, but a PMC memo did not specify his responsibilities beyond 'working with the company’s operating units and business plans.' He will report directly to George Grobar, who in 2016 became PMC’s COO after several years at the VP level... Finn will be working directly with PMC business leads on several of the company’s brands, as well as international business, 'to help plan growth initiatives and assist in achieving our business plans,' Grobar said. He declined to specify the units that will be under Finn’s purview, as that 'may fluctuate over time. As we have increased scale and the number of business units in the company, we felt it was time to add some senior management that could allow us to maintain the required focus across our entire portfolio,' Grobar added... Like Grobar, Finn spent most of his career with Disney. He joined that company in 2001 after six years working as executive director for business development at Paramount Pictures, part of Viacom. At Disney, Finn spend a decade as an operations executive, managing the financial and capital aspects of its media networks, before moving on to a role as CFO at ESPN Star Sports in Singapore, a venture between Disney and News Corp."...
The Great Interview Magazine Caper
In an in-depth piece, NY Times reports on the curious circumstances around the Brant family's efforts to regain control over Interview magazine, after Brant Publications filed in May for Chapter 7 bankruptcy, with nearly 300 unpaid creditors. "On May 25, Interview’s chief revenue officer, Jason Nikic, released a memo that said Interview would rise from the dead under the ownership of an entity called Crystal Ball Media. The next issue, he said, would come in September. The new creative director would be Mel Ottenberg, a stylist who works with Rihanna. Interview, he promised, would be 'as beautiful, as creative, and as visually stunning as ever.' The president would be Kelly Brant, Mr. Brant’s daughter and the magazine’s digital director. This was a strangely confident assertion. To assume ownership of the bankrupt magazine, Crystal Ball Media likely will have to earn the support of a court-appointed bankruptcy trustee. In all likelihood, Crystal Ball will have to to outbid other prospective buyers"...
Magazine Brands Celebrate Pride Month
MediaPost: "Magazines are celebrating this year’s Pride Month with a number of magazine covers, editorial and partnerships dedicated to the occasion.Every June, Pride Month commemorates the 1969 Stonewall riots that sparked the gay rights movement, and celebrates the LGBTQ+ community. Billboard published its first issue dedicated to Pride this week, with openly gay teen singer Troye Sivan on the cover. Sivan discusses gay culture, his past relationships and upcoming collaboration with Ariana Grande in the feature story. Billboard's annual “30 Days of Pride” series, sponsored by American Airlines, asked a number of pop culture celebrities to write love letters to the LGBTQ community. Among those participating were Jason Mraz, Meghan Trainor and Carole King. Singer Hayley Kiyoko, nicknamed pop’s “lesbian Jesus,” graces the cover of Paper magazine’s Pride issue, which also features an editorial on Tan France, the fashion expert on the popular Netflix reboot of “Queer Eye.” Out magazine teamed up with retailer H&M on a campaign called “#ProudOutLoud” to share the empowering voices of Gus Kenworthy, Kim Petras, Shaun Ross, Gabrielle Richardson and Aja in a number of videos and social posts. “Hamilton” star Javier Muñoz teamed up with social-first news brand NowThis as guest editor for LGBTQ+ coverage this month. Muñoz will host “Legendary,” an interview series profiling people who are making an impact in the LGBTQ+ community. Muñoz will also take over NowThis’ Instagram Stories during the NYC Pride March on June 24. Magazines are taking the opportunity to publish articles about Pride Month as well. Variety did a story on the top films and TV shows centered around LGBTQ themes available for streaming on Netflix, Hulu, Amazon and HBO. Shape wrote about breweries in Seattle celebrating Pride Month with “glitter beer”: Highly Verotic Pale Ale, brewed with citra and mosaic hops, with a spoonful of edible glitter mixed in.Some brands have also updated their logos temporarily: Entertainment Weekly changed its usual white lettering on a black background to a rainbow-colored version"...
Washington Post Employees Petition for Better Pay, Conditions
Daily Mail: "More than 400 Washington Post employees signed a petition addressed to owner Jeff Bezos pointing out what they call unfair employment practicesThe petition calls for 'fair wages; fair benefits for retirement, family leave and health care; and a fair amount of job security.' The petition noted that within the last year, 'the Post has doubled the number of digital subscriptions and increased its online traffic by more than half.' Now the staff is asking for Bezos to step up and, in addition to creating wealth, to 'share it with the people who helped you create it.' The message asked readers and viewers to share it, if in agreement, using the hashtags #DearJeffBezos and #OneYearLater. Bezos's WaPost ownership is separate from his roles as chairman and CEO of Amazon. He could not immediately be reached for comment on the petition."
OTHER NEWS OF NOTE:
Can Barnes & Noble Survive?
Knowledge@Wharton: "Barnes & Noble played the role of disruptor, leading to the demise of many an independent bookseller. But now the big box book chain is considered a dinosaur, struggling to survive in a rapidly changing retail landscape. But if the company collapses (as its chief rival, Borders, did in 2011) who is to blame? While a recent New York Times op-ed argued that lax government policy toward giant corporations has allowed Amazon to take over the book business and made it impossible for B&N to compete, experts from Wharton and elsewhere say there are other trends at play. They note that the 633-store chain is incurring losses because it has failed to make good use of its stores to endear itself to book lovers. By consequence, B&N has been unable to cash in on a revival in the fortunes of physical bookstores and yielded ground to smaller local shops that have been able to forge deep connections with their customers. In the digital space, meanwhile, B&N's Nook e-reader has lost badly to Amazon’s Kindle. Wharton marketing professor Thomas Robertson, who is also director of the school’s Jay H. Baker Retailing Center, identified a few important factors that B&N or any other retailer could consider. 'You have to find ways to reach out to [the millennial generation], and it is about being omnichannel--it has to be a seamless experience,' he said. 'Also, if you’re going to reach Gen Z or Gen X, it is all about mobile.' However, all indications are that Barnes & Noble faces an uphill road ahead. In its March 2018 earnings statement, the company posted a 5.3% revenue decline to $1.2B and a loss of $63.5M. B&N leadership has talked of a 'strategic turnaround plan,' but that hasn’t inspired much hope. 'It’s pretty grim,' said Wharton marketing professor Peter Fader. 'They’ve tried lots of different things from devices to experiences to broadening the merchandise. Nothing’s working. At this point, they haven’t found that hook to save the business nor have they found the vision or leadership to give people any confidence in it.' Mark Cohen, director of retail studies at Columbia University Graduate School of Business, also viewed the closure of the chain as an inevitability. 'This is late stage demise,' he said. 'They were the last man standing in a sense in the traditional brick-and-mortar space, but they just haven’t figured out how to be become relevant. Too little, too late... 'There is a tremendous resurgence of local bookstores that’s underway, but these have relevance because they’re coming up out of the ground as green shoots in the communities in which they are appearing and they’re not trying to be all things to all people as B&N has always tried to be,' said Cohen... Wharton marketing professor Barbara Kahn assessed B&N's predicament through the “Kahn Retailing Success Matrix,” an analytical tool she has developed to determine whether a business has the fundamentals of what it takes to be successful. The matrix, which is featured in her forthcoming book, The Shopping Revolution: How Successful Retailers Win Customers in an Era of Endless Disruption, has four quadrants that represent key customer values and how retailers could respond to them. The quadrants represent aspects such as 'product benefit,' or the value a customer would get, say, from brands like Nike or Warby Parker; and 'increased pleasure' at retailers like Italian foods marketplace Eataly or cosmetics store Sephora. They also represent aspects that 'take away the pain' for customers, such as lower prices at Walmart, or an 'easy and frictionless' experience, as with Amazon. According to Kahn, in order to be successful, a retailer has to be good in every one of those quadrants, and then be the best in the business in at least one of them. 'B&N has been playing catch up in all of these dimensions,” she said. She explained that while the retailer probably has attractive prices, a good selection of books, good stores that offer a satisfying customer experience, and a strong online presence, 'the problem is they’re not the best at anything... Amazon and Apple are among those retailers that have evolved much further in what it takes to endear a company to customers, according to Kahn. “Why would you want to buy from a store when it is easier to buy on Amazon? Why would you want to buy there when you get a cheaper price somewhere else?” she asked. “[Barnes & Noble’s] customer experience is OK, but it’s just not worth going out of your way for.” She also noted that while Barnes & Noble has big bookstores, they don’t translate into an intimate or cozy customer experience. The book assortment is also likely to be bigger on Amazon, she added. “The problem is they’re stuck in the middle.'" Article goes into more depth with various experts' assessments of B&N's scenario. On RetailWire, retail industry pros comment on whether Amazon is standing in the way of B&N's turnaround.
Grocers Turning to Google to Fight Amazon/Whole Foods
CNBC: Since Amazon acquired Whole Foods a year ago, Google "has become an increasingly attractive partner for retailers looking for ways to compete with Amazon, allowing it to explore new business models and alliances. For example, Target, Walmart, Costco and others all agreed to a new advertising program with Google that makes their products appear in search and through its smart, voice-activated Assistant at the same time, with a universal shopping cart that routes purchases through its Express shopping delivery service. Instead of paying for an ad, the retailers now have to give Google a cut of each purchase. It's an interesting new model for Google and helps retailers stay on par with Amazon by giving consumers a simple, consistent purchasing process.And earlier in June, the search giant announced a fresh partnership with French supermarket giant Carrefour to sell its groceries through Google's shopping site and Home smart speaker. For retailers, partnering with Google on shopping offers visibility and consumer convenience. For Google, its shopping service is crucial in helping it win back product searches from Amazon and stay relevant in the voice-powered future of e-commerce"...
Sprouts Sees Online Delivery as Key Growth Avenue
SN: "Sprouts Farmers Markets Inc. is well-positioned to extend its customer reach via online delivery, according to CEO Amin Maredia. In a discussion yesterday at the Deutsche Bank dbAccess Global Consumer Conference in Paris, Maredia said Sprouts’ business through Instacart has been brisk since the natural and organic grocer hatched a partnership with the online delivery provider in January. Previously, Phoenix-based Sprouts used Prime Now for online grocery delivery but later 'unwound' that partnership with Amazon, he said. Last August, Amazon acquired Sprouts competitor Whole Foods Market... CFO Brad Lukow said about 70% of Sprouts’ sales come from shoppers in a seven-minute drive time or less from its stores, which total nearly 300 in 16 states, and 60% of sales are from fresh food. 'What we're seeing generally is 70% of our sales come from within seven minutes of the physical store, and our home delivery business is the inverse. And so, we can truly extend the trade area and drive incremental sales to EBITDA, both EBITDA dollars and EBITDA margin,' Maredia said. 'So now that we've gotten good operations and execution through this transition [to Instacart], we're starting to accelerate the marketing of this program because of what it opens for us. We can get more market share, I think, compared to conventional retailers.'"...
Innovative Food Start-Ups Drawing Investment
TechCrunch: "A Crunchbase News analysis of venture funding for the food and beverage category found that startups in the space gobbled up more than $3 billion globally in disclosed investment over the past 12 months. That includes a broad mix of supersize deals, tiny seed rounds and everything in-between.Spending several hours looking at all these funding rounds leaves one with a distinct sense that eating habits are undergoing a great deal of flux"...
OTHER NEWS OF NOTE: