RIP, Time Inc; it was fun while it lasted

This article first appeared in The Edge Financial Daily, on November 29, 2017.
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IF you joined Time Inc when I did, in the mid-1990s, the glorious excesses that once marked the company were a thing of the past. But you heard the stories.

The great Fortune writer Carol Loomis used to recall how the male writers would always travel with their female research assistants, who would take notes during interviews, transcribe them and do the heavy lifting while the writer was out on the town.

Dan Okrent, a former editor of Life magazine, had a raft of memorable expense-account stories he told and retold. John Podhoretz, who worked at Time magazine three decades ago, once wrote a piece recalling the time Henry Grunwald, Time’s editor, took a helicopter from Manhattan to White Plains, 40km away. There were carts serving drinks in the late afternoon, dinners at the most expensive restaurants in New York and limousines to take editors home at night.

Which is not to say that the journalists of my era were suffering, at least not during the first five years I was there. The period from 1995 to 2000 (I left in 2004) was print advertising’s last hurrah. The first Internet boom was roaring and the money just poured in. At Fortune, where I worked, the managing editor, John Huey, would sometimes begin the morning meeting by saying that we had just gotten 15 more pages of advertising and did anyone have any ideas about how to add some more stories?

At its peak in the late 1990s and early 2000s, Fortune was making, pre-tax, upwards of US$110 million — we even spent US$5 million one year taking the entire staff to Hawaii. Time magazine made in the US$100 million range, People made over US$400 million, and Time Inc had earnings that came in a hair under US$1 billion. The idea that it would all come to an end one day was unimaginable.

But that day has come. On Sunday evening, Meredith Corp, a magazine company based in Des Moines, Iowa, announced that it was buying Time Inc. It will pay US$1.85 billion (RM7.6 billion) in cash and assume close to US$1 billion in Time Inc debt. Charles and David Koch are supplying US$650 million of that cash, raising fears that they will want to use the magazines, especially Time, to spread their conservative views — just as founder Henry Luce did in the 1930s and 1940s.

I doubt that will happen, but not because I believe the Koch brothers’ promise not to get involved. I just do not think Time magazine is going to be around much longer, at least not in a form its loyalists would recognise. When Meredith Corp first tried to buy Time Inc in 2013, it did not want to include Time, Fortune, Money or Sports Illustrated in the deal. There are already rumours that Meredith plans to shut down Time. My guess is that Fortune and Money are goners, too. None of them make money. Meredith publishes magazines for the heartland, like Better Home and Gardens, Family Circle and Ladies Home Journal. The Time Inc magazines it likely covets are titles like In Style and Real Simple that it can market to its subscriber base.

As a Time Inc alumnus, I am sad to see this once-great publisher fade into the sunset. The magazines did a lot of great journalism. But I am not at all surprised. Once the Internet bubble burst in the spring of 2000, the company was ill-equipped to cope with the decline of print advertising and the growing importance of digital publishing. Two months earlier, Time Inc’s parent company, Time Warner, had been purchased by AOL for something like US$160 billion. It was a classic bubble purchase — not only insanely overpriced, but without any overarching rationale. Internally, it was a huge distraction.

I remember going to an offsite where AOL executives sternly told us that things were going to be different: They would impose new discipline while transitioning us to Internet. We began to clash with them almost immediately. Within two years, the combined company had to take a goodwill write-off of nearly US$99 billion, and the Time Inc division became marginalised within the company.

Meanwhile advertising was rapidly disappearing, and it was not just a temporary phenomenon. When I became executive editor in 2000, one of my first meetings included a painful discussion about layoffs. (“So, Joe, how do you like management?” asked Huey sardonically.) From that point on, layoffs were a never-ending fact of life. It wore everybody down. Meanwhile, the magazines had to shovel whatever profits they made to the parent company instead of being able to reinvest them.

As I have written before, one of key reasons for Time Inc’s decline was its inability to figure out the Internet. When I was there, the executive charged with driving Fortune’s Internet strategy worked on the business side and rarely interacted with journalists. On the editorial side, there was simply no urgency about driving Internet traffic. Meanwhile, Sports Illustrated allowed itself to be reduced to also-ran status by ESPN’s website; People’s genteel gossip could not compete with TMZ, and so on.

There is another issue, though. Magazines do not necessarily last forever. Sometimes, they simply outlive their usefulness. In the 1940s and 1950s, Time Inc’s Life magazine was perhaps the most popular mass circulation magazine in the country. But the rise of television diminished the need for weekly magazine built around photography, and it folded. Money magazine is a monthly personal finance magazine in an era where financial information is at everyone’s fingertips. Time’s once-proud competitors, Newsweek and US News and World Report, are hanging on by their fingernails, and their old formula — a well-written roundup of the week’s news — has been outdated for decades. And while Time has valiantly tried to reposition itself in various ways, it really does not have a reason for being anymore.

So yes, I am sad to predict that Time Inc will soon fade away. And I am sorry that my alma mater, Fortune, will probably not survive the move to Meredith Corp. But it has been a long time coming. And nothing lasts forever. — Bloomberg