Time to speed up European assault

Time Incorporated, the publishing arm of Time Warner, has made slow progress in its plans to expand its European magazine range over the past year. Nevertheless, it has promoted European president Richard Atkinson to the role of chief financial officer and executive vice -president of Time Inc (MW August 26). The publishing arm of Time Warner contributes some 20 per cent of the parent company’s sales. With a former European president now making global financial decisions for Time, the European market may benefit and the number of launches undertaken on this side of the Atlantic is likely to accelerate. Atkinson’s appointment is the result of restructuring at the top of the organisation to allow for the impact of digital technologies and the Internet. Richard Bressler was appointed to the new role of chairman and chief executive officer of Time Warner Digital Media in June. His role as chief financial officer and executive vice-president of Time Warner was taken up by Joseph Ripp, who was promoted from the Time Inc magazine division. Atkinson will step into Ripp’s shoes and a plush New York office. “With the Internet, there are a lot of things which cut across all traditional boundaries of content,” says Atkinson. “And the purpose of setting up Bressler is to deploy resources that cut across the divisions. It is an attempt to bring digital to the fore.” When Bressler’s move was announced, Time Warner chairman and chief executive officer Gerald Levin went further: “Digital media is Time Warner’s single most important growth area. I am pleased to put an executive of Bressler’s calibre in charge of an area that is transforming the company.” Bressler’s task will be to corral resources across Time Warner’s fiercely independent brands. The company will create five Internet hubs, based on finance, news, sports, entertainment and lifestyle, which by the end of next year will have e-commerce capability. It is an opportunity that the company – and other publishing houses – cannot afford to ignore. Time Warner has resources on its side. The group exceeded analysts expectations in April, reporting strong profits on the back of &£16.3bn global sales. Its magazine portfolio, part of Time Inc, includes 25 different titles, such as Time, Fortune, In Style, People and Sports Illustrated. Two years ago, it bought trendy UK lifestyle title Wallpaper, and then rolled it out in the US. Wallpaper was one of the few titles to perform well in the most recent Audit Bureau of Circulations figures – it showed a 40 per cent rise compared with last year. The company has the potential to clean up on the Net. Its lifestyle hub is likely to impinge on the territory of IPC Electric and Hearst’s women.com. The cashflow it could generate through e-commerce – by taking a cut from purchases made by subscribers – is compelling. The company could take a cut of a mortgage arranged on the Net, a percentage of a clothes or cosmetics purchase on its lifestyle hub, or generate revenue from a stock purchase on a business site. But while digital has created a shift in resources and management time, becoming international remains a key plank of Time Inc’s strategy. This time last year the company said it was looking to Europe to build its presence by launching European editions of US brands such as People and In Style. But so far it has been cautious. In Style was launched in Germany earlier this year as a joint venture with Burda, and the title is about to be launched in Australia. David McMurtrie, director of media buying agency Mediacom Europe, says: “I think it has accelerated. The size of Time Warner means that sometimes it is difficult to make quick decisions. But I think the more it is seen to be expanding in Europe, the greater autonomy European management will have.” The company’s cautious stance may be prudent, even if it comes at the expense of opportunities. The magazine market is a difficult one to crack, both in Europe and the US. John Frelinghuysen, vice-president of management consultancy Booz Allen & Hamilton in New York, says: “Only one in five titles in the US reaches year five, and, of those, many may never generate significant profitability. But large media players have a real advantage in that they can cross-sell advertising, and there is a lot of leverage with distribution networks.” Ben Atherton, account director at CIA Medianetwork’s international department, says: “In Style’s access to celebrities is not a guarantee of success. I think there is a lot of churn in the market. Every year dozens of launches take place, but the success rate is quite low.” Atkinson’s replacement will be arriving in a few weeks. That person’s task will be to increase the pace of Time’s European expansion.

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