Ann Moore has become a zealous Web convert as she carries forth her plan to transform Time Inc.'s storied magazines into multiplatform brands
From her office perch on the 34th floor in the Time & Life Building, Time Inc. CEO Ann Moore presides over the world's biggest publishing company, with some 150 magazines representing $5 billion in annual revenue. Today, it's not the magazines she's marveling over but the image of a cluster of football players that fills her oversized computer screen. "You can see every drop of sweat on these athletes," she gushes. "The quality of the photography is just unbelievable. It has something to do with the pixels."
The image is a customized screensaver of a Sports Illustrated photograph; Moore is a fan, having spent 10 years at SI earlier in her career. That extension of SI helped her see that Time Inc., in general, has a real opportunity to build a business on the Web.
SI.com easily sold out sponsorships of the screensavers. But one of the many beauties of a title like Sports Illustrated is that it need not necessarily create new material to make money—it can repurpose its existing content.
"We had those photos anyway," she says, "and to turn that into another business is really cool."
Whether it's pixels or screensavers, Moore has a lot to say about the Web these days as she carries forth her plan to take Time Inc.'s storied magazines and transform them into multiplatform brands.
Time and time again, the company has tried to reinvent itself. In July 2005, Moore reorganized the magazines into
six units, only to regroup them again in December 2005, into two groups. Its online strategy has gone through a number of iterations: in 1994, it launched Pathfinder, a portal for its magazines, only to shut it down five years later. Then, after the merger of AOL and Time Warner in January 2001, AOL took over the sales functions of most of the magazines' Web sites, moved them from a free to paid subscriber model. AOL started abandoning that strategy in 2005.
Now, it's somewhat of a different challenge for Moore. In her 28 years at Time Inc., her knack for launching new magazines like In Style and Real Simple earned her the moniker Launch Queen—though there have been bombs, too, like Suede, an ethnic fashion magazine, and online magazine Office Pirates. The golden age of big launches has given way to a new era as companies buckle down to figure out ways to extend their existing brands, and Time Inc. is no exception. Now, Moore has to learn to parlay her talent for creating magazines into building out the company's digital strategy. Yet she sees more similarities between the two than some might imagine.
"The process of building a product online looks amazingly to me like the same process you would use offline," she says. "First, you build a product and differentiate a product, then you build a big audience—and you need a big audience online because you've only got one revenue stream. Then you monetize the audience. That's the same kind of logical process that we would use in the offline world to build a product. People's eyes open up when I say that."
The old Time Inc. magazine grouping is a legacy of the acquisitions that built the company, like IPC Media and Time4 Media, its enthusiast group. Soon, Moore will have a smaller portfolio to run. In September, Time Inc. announced it was selling off its 18 enthusiast titles and parenting magazines, which were deemed too small to make a meaningful contribution to the bottom line.
The remaining 32 U.S. publications will be divided among six branded vertical-content areas: News, celebrity/entertainment, sports, business/finance, home/food and health/fitness.
"We need to think of ourselves in terms of the largest branded vertical content categories," she explains. "We're not going to get you online and we're not going to be your search engine, but what we have the ability to do is build these very deep vertical content areas."
The path of CNNMoney.com and SI.com, which are already well developed, is clearer. SI plans to add more weekly videos of its popular commentators, which are also available on mobile to Verizon customers. It will expand MySI.com, a desktop application that lets visitors get customized photos and news of their favorite team. It's also digitizing its 52 years of archives and planning a social-networking play.
CNNMoney.com, the Web site for Time Inc.'s four business and financial titles, will add video and portfolio-management tools to its offerings. The site recently added video segments that are extensions of its magazines' print articles.
People, meanwhile, is working on building an online database of 30 years of articles and plans to add more online features next year, including more mobile-delivered news. People also has been using its Web site to solicit reader reaction to major stories, like the Amish school slaying. "We know that we have enormous possibilities for community on People.com," explains Martha Nelson, editor of the People Group.
Time magazine's Web site, in the midst of a redesign, will focus on context and analysis while CNN.com continues to position itself as a breaking-news source. The change came about following the hire of Time veteran Rick Stengel as the weekly's managing editor and the recent news that the magazine would shift its on-sale date to Fridays from Mondays, thus allowing the Web more of an opportunity to break news.
Moore also is encouraging executives to share their best practices; it seems like a no-brainer that the celebrity titles would cross-promote each other's Web sites, but they only recently started doing so. The cross-pollination also is starting across the pond with IPC, Time Inc.'s British magazine unit, which is looking at importing InStyle.com to the U.K. and exporting its own women's portal to the U.S.
The whole multiplatform strategy isn't without risks. For starters, Time Inc. is a latecomer in the online game. It didn't start selling ads on most of its Web sites until 2005, when it took back control of the inventory from AOL. The decision to sell off the 18 smaller titles will free Time Inc. to focus on its bigger magazines, but it also leaves the company with fewer eggs in its basket.
"Personally, I think this is a smart move, given Time Inc. has such strong brands to work with," says Andrew Swinand, president, chief client officer of Starcom USA. "The challenge is, how quickly can I work that strategy while I sell these other assets? How quickly can I make SI and others large and profitable businesses to make up for the businesses I'm selling off?"
Time Inc. also will have to adopt a culture that's oriented around content rather than the medium. Executives will have to think of their competition as Internet sites rather than other magazines, and make the Web sites more than just replicas of the print magazines.
The investment on the digital side comes as the company's core print business is flagging. For the first nine months of the year, revenue for the publishing division, Time Warner's smallest, was flat at $3.7 billion. Operating income declined 2.8 percent to $527 million, online revenue growth at SI.com and CNNMoney.com notwithstanding. Some of Time Inc.'s biggest titles face sluggish circulation and advertising growth: Time and People's ad pages and circulation are essentially flat with last year. (Time earlier this month announced it would reduce its rate base in January by 18.8 percent to 3.25 million, and offer buyers the choice of an audience guarantee of 19.5 million readers per issue.) There's sentiment on the Street that Time Warner should spin off the unit to focus on its faster-growing divisions.
Media buyers, meanwhile, are supportive of Moore's latest Web play. Peter Gardiner, partner, chief media officer at Deutsch, applauds Time Inc.'s efforts to migrate its brands to other platforms—after a number of fits and starts—but adds that the company needs to improve its cross-selling ability. "They're not as good as they think they need to be at selling an integrated product," says Gardiner.
Nelson says Moore's ability to see the big picture and focus on the consumer will serve the company as it pushes out its brands digitally. "When you go to the online experience, she's pushing us to see [that] people want to get the content of our brands online, and how are we going to do that and what's the best possible user experience?" she says.
That process won't be pain-free, though. On the edit side, some writers toggle between producing for the Web and print with ease; others have yet to make the transition.
Moore is scoring points internally for communication: To get out her message and answer staffers' questions, she and other top executives have been holding small gab-sessions with 50 employees at a time, called Luce Talks.
Yet, any change creates unease. With the sell-off of the enthusiast publications, the company will have shed more than 1,000 people in the past year or so, and Moore has confirmed additional layoffs are coming in January. A McKinsey & Co. study due at the end of the month has uncovered plenty of inefficiencies at five magazines the firm studied for Time Inc.: Time, SI, People, Fortune and Entertainment Weekly. Time, for instance, has several layers of editing (articles are read by two editors, three copy editors, and reporters that do research and fact-check) that offer room for streamlining. "We've got a lot of waiting around. We've got a lot of technology that could really cut some steps. Some of it is years away, but remarkable things will be able to be done directly by reporters and editors and art directors online and you will cut out a lot of hand-holding as the story flows through the system," Moore says. "There could be changes in editing, changes in art direction. An art director is able to do so much more than an art director was able to do even a year ago."
Moore disagrees with the notion shared by people inside and outside the company that the AOL phase hurt Time Inc. For example, People.com is the No. 2 celebrity site behind AOL's TMZ.com channel in terms of unique visitors.
And since they started selling on their own in July, People and In Style's sites have seen CPMs jump dramatically, Moore says. "Do I think we missed out? I don't think that there was a party to go to over the last couple of years. There's plenty of time for the big trusted brands to establish their rightful place on the Internet and in the digital future.