People walk past the Time & Life Building on the Avenue of the Americas in New York
Washington - AFP
Storied magazine publisher Time Inc. gets a fresh start with its upcoming spinoff as an independent company in a challenging and fast-changing media landscape.
The split highlights the woes of print journalism, which has been suffering for years from a move to digital news.
The June 6 move split the magazine arm -- including the famed Time newsweekly, Fortune, People and Sport Illustrated -- from media giant Time Warner, ending a marriage that merged the two firms in 1990.
The new firm is the latest publishing spinoff from a big conglomerate. It comes on the heels of Rupert Murdoch's News Corp. splitting its entertainment and publishing segments, and a similar action planned by Tribune Co.
Time Warner "is dumping the magazines to save themselves from continual losses year after year," said Nikki Usher, a George Washington University professor specializing in new media.
Ken Doctor, analyst at the research firm Outsell, agreed, saying "this is an affirmation that print-based publishing assets have no growth prospects."
But analysts said an independent Time Inc. will have a chance to refocus with an improved strategy for the magazines and their integration with online services.
"I would expect some selling of assets, and maybe some buying," Doctor told AFP.
He said the flagship weekly Time magazine is "largely anachronistic" and that it's not clear how it can compete in the fast-moving world of journalism.
The new company, he added, must decide whether it wants to focus on breaking news and long-form journalism, or "lifestyle" titles such as Food & Wine and Travel & Leisure.
"The early magazines created by Henry Luce may be the least valuable," he said. "So Time may want to go the lifestyle route."
Usher said that if the new firm wants to compete in daily journalism, it needs to invest more to cover breaking news for its digital clients and long-form journalism for print.
"A lot of the best writers are producing for the weekly cycle but there is a need to fill that 24/7 Web environment," she told AFP.
- Leaving home -
In a symbolic move, the new company headed by veteran executive Joe Ripp is leaving the Time & Life building in midtown New York, where it has been since 1959, for Lower Manhattan.
It also agreed to acquire technology firm Cozi this week to help optimize its websites.
Time Inc. has "one of the strongest collections of media brands," reaching some 100 million US consumers in print and 70 million online each month, according to company documents.
Properties include iconic titles like Fortune, begun in 1929; Sports Illustrated, launched in 1954; and People, which premiered in 1974, as well as some 50 international editions for print or digital.
When its finances are calculated independently, the unit showed a modest net profit of $201 million on revenues of $3.35 billion in 2013.
"This is a very challenging environment for the magazine industry," said Mark Jurkowitz at the Pew Research Center's Journalism Project, whose recent study showed single-copy magazine sales down 43 percent since 2008.
- No 'secret sauce' -
"These magazines have to monetize the digital space," he said, adding that the formula for doing that is not yet clear -- "there's no secret sauce."
Samir Husni, director of the Magazine Innovation Center at the University of Mississippi's journalism school, said the spinoff can help the division emerge from being a "poor stepchild" of a large conglomerate.
"The best thing that's happening is putting the magazines back in the hands of people who know and care about them," said Husni.
Contrary to popular belief, Husni said Americans still read a large number of magazines and some publishers, such as Hearst, have successfully launched new titles and kept existing ones healthy.
He said he sees Time Inc. returning to its roots with high-quality journalism, adding that "nobody does weeklies the way Time Inc. does weeklies."
"I truly believe this is a new spin on life for Time Inc. and all the magazines," he told AFP.
"You can see the excitement. There is some nervousness but, they know if they fail they will fail doing something they love, rather than being pushed to do something they hate."