Time Inc plots strategy to take magazines into the future

Chief Executive Rich Battista (Right). With him is the company's new chief operating officer, Ms Jen Wong.
Chief Executive Rich Battista (Right). With him is the company's new chief operating officer, Ms Jen Wong.PHOTO: NYTIMES

Chief executive Rich Battista leads the magazine publishing giant's charge into the multimedia realm, pushing into online video, television and entertainment

NEW YORK • Onstage at a recent industry conference with the longtime leaders of the country's biggest magazine publishers, Mr Rich Battista, the new chief executive of Time Inc, did not seem the outsider.

Tieless, with legs crossed, he ticked off his company's latest accomplishments - robust digital growth, updated advertising capabilities - with the swagger of a knowing publishing chieftain.

"There's something really exciting happening at our company," he said, echoing what had become something of a rallying cry at Time Inc. "We're taking our brand to really exciting new places."

A former television executive, Mr Battista, 52, has been charged with revitalising the most storied magazine publisher in the country.

At the helm of the nearly century- old Time Inc since September, he has worked quickly to transform the home of Time, People and Sports Illustrated into a multimedia, multi-purpose company, with a strategy heavy on online video, television and entertainment - and noticeably lighter on magazine journalism.

The foundation of the company is, has been and will remain the power of these brands. It's about extending these brands and taking these brands far beyond, obviously, the printed word, which was the legacy of this company.

CHIEF EXECUTIVE RICH BATTISTA, on Time Inc's strategy to leverage on its well-known magazine titles, such as Time and People. With him is the company's new chief operating officer, Ms Jen Wong

Among the ideas the company has floated: offering people paid services such as a food-and-wine club and insurance for pets.

Mr Battista's zeal, however, may not be enough to save the Time empire, whose weekly publications helped propel the national conversation for decades, but have struggled to maintain their relevance in the digital media environment.

Time Inc's revenue has fallen every year since 2011 and investors have punished its stock since the company was spun off from Time Warner nearly three years ago.

Brutal cost cuts and relentless executive churn have roiled the company.

Smelling blood, potential acquirers have been circling the company for months. And while the board has not yet decided whether to pursue a sale, it has asked suitors to submit formal bids by this week, according to two people briefed on the company's plans.

Five parties, including Meredith Corp and an investor group led by Mr Edgar Bronfman Jr and media executive Ynon Kreiz, have expressed interest in buying the company in its entirety, the people said.

Early last month, Time Inc filed an amended change-in-control severance plan with the Securities and Exchange Commission that protects bonuses for executives deemed most likely to be affected by a sale.

Time Inc rebuffed a takeover bid of at least US$18 (S$25) a share from Mr Bronfman and Mr Kreiz last year and it could ultimately decide not to sell. The company is also considering bringing on an outside investor.

Mr Battista and Ms Jen Wong, 42, Time Inc's new chief operating officer, maintain that they are committed to advancing their plans for the company.

During a recent interview at its new headquarters in downtown Manhattan, both insisted that Time was on solid footing despite its lacklustre financial performance and that it was done without any hand- wringing about what its strategy should be.

"Those things are behind us," said Ms Wong, a former executive of the website PopSugar. "We're really focused on growth now."

In a note to employees several weeks ago, Mr Battista introduced an "innovation challenge" intended to "surface ideas for new revenue- generating products and services to offer our consumers". The winning team will receive US$10,000.

"Think of it," he said, "as a Time Inc Shark Tank."

Time Inc, with its portfolio of 22 magazine titles in the United States and 15 digital properties, has, for years, been a vastly different company from the one Henry R. Luce founded in 1922.

Although the print business still brings in roughly two-thirds of the company's US$3 billion in annual revenue, focus has shifted towards other revenue opportunities, including short online videos and events.

The magazines share resources and editors work with the business side, an idea that for much of the company's history would have been anathema.

While the occasional story in People still generates buzz and Time's covers sometimes draw attention (one from October featuring an illustration of US President Donald Trump won the American Society of Magazine Editors' Cover Of The Year award), Time Inc's magazines no longer set the agenda or break memorable stories the way they once did.

But analysts and former employees also describe distinct challenges and missed opportunities that made it hard for the company to adapt to a shifting media landscape.

Management disagreements and cost cuts in the 2000s led to high- profile departures that bled the company of talent and left it without a clear succession plan.

Until the spin-off, Time Warner and its chief executive, Mr Jeffrey L. Bewkes, took Time Inc's earnings and invested them in higher- growth businesses such as HBO, leaving Time Inc with little money for reinvestment.

Mr Battista and Ms Wong insisted that Time Inc's magazines were still important to the company.

And early last month, Mr Battista and Mr Alan Murray, Time Inc's chief content officer, sent a note to employees praising recent developments at the company, including a bump in Time magazine's online audience.

"These achievements are a testament to one of our key points of difference - Time Inc's trusted, quality journalism," they wrote.

But Mr Battista and Ms Wong also said the company was looking to leverage on its well-known titles to tap other revenue opportunities.

"The foundation of the company is, has been and will remain the power of these brands," he said.

"It's about extending these brands and taking these brands far beyond, obviously, the printed word, which was the legacy of this company."

To some in the industry, Time Inc seems to be on the right track even if its financial results suggest otherwise.

And within the company, some have described a new sense of collaboration. Employees congregate in common areas, where there are bowls of fruit and free snacks. The company's new headquarters feature bright video studios and test kitchens, instead of the bar carts and palatial executive offices of yore.

"I think they're absolutely doing the right thing," said Mr Tim Nollen, an analyst at Macquarie Capital. But he added: "It remains to be seen how they actually can monetise what they're doing."

NYTIMES

A version of this article appeared in the print edition of The Straits Times on March 07, 2017, with the headline 'Time Inc plots strategy to take magazines into the future'. Print Edition | Subscribe