#publishing

David Carr and Ravi Somaiya on the spin-off of Time Inc. from Time Warner:

The new entity will start off with $1.3 billion in debt, including $600 million that will go toward a one-time cash dividend to Time Warner shareholders. That stands in stark contrast to Rupert Murdoch’s News Corporation, which was given a $2 billion cash cushion when it was spun off into a separate company last year. At approximately three times earnings, Time Inc.’s debt is high-risk, and Moody’s has rated it at less than investment grade.

As recently as 2006, Time Inc. produced about $1 billion in earnings, a figure that is now down to $370 million. Revenue has declined in 22 of the last 24 quarters, which has tried the patience of both investors and Jeffrey L. Bewkes, Time Warner’s chief executive.

I’m a bit late to this, but there are a couple staggering things here. Earnings have been sliced by almost two-thirds — in just eight years. And the amount of debt they’re saddling this thing with seems absolutely insane. It’s really hard to see how Time Inc. exists in ten years. Maybe even five.

Michael Moritz on the recently-leaked internal New York Times internal operating memo:

The overwhelming sense from the report is that, except for the desire to refashion its rich trove of archived material, the Times hierarchy is still too busy paying homage to the past. Here are some telling examples. The printed newspaper still carries the slogan, “All the news that’s fit to print” - a slogan that is now so patently false that it sounds like a spoof borrowed from The Onion.

Ouch.

David Carr on Epic, a new entrant in the online publishing world:

They are trying to build a model for long-form journalism where the revenue generated over the entire life of a story — magazine fees, sales on Audible.com and Amazon Kindle Singles, ancillary film and television rights — can be used to finance the costs of reporting.

Seems like a smart thing to try. It almost has to work better than the current failing system by default.

Also:

In his more optimistic — or grandiose — moments, Mr. Bearman sees Epic as a journalistic version of the original United Artists, which was formed in 1919 by Mary Pickford, Charlie Chaplin, Douglas Fairbanks and D. W. Griffith as a way of using their leverage as artists to cut a better deal in the marketplace. “Maybe this is a moment, with all of these different platforms opening up, with new tools and new ways of telling big stories, when writers can get some control in the kind of work they do,” he said.

Let’s hope so. It definitely feels like a movement is underway for individual writers to take more control of their own destinies.

Everyone is focusing on the fact that The New York Times bought The Globe for $1.1 billion in 1993 and has now sold it for just $70 million two decades later — but what about the fact that the sale also includes the Telegram and Gazette, which The Times bought for $295 million in 1999?

Yes, The Globe is being sold for far less than The Times paid for the Telegram & the Gazette. And yes, the sale price now includes those two as well. It’s just a stunning loss of value all around.

The New York Times reporting that The New York Times is not for sale:

On Monday, The Washington Post Company announced it would sell its flagship newspaper to Amazon.com’s founder, Jeffrey P. Bezos, for $250 million. The sale of The Post by the Graham family, which owned it for 80 years, leaves The Times as one of the few major American newspapers still run by a family.

In an interview published last week in The Daily Beast, Mr. Sulzberger addressed rumors that a media mogul like Mayor Michael Bloomberg might purchase The Times at some point. “Imagine. People talk. What a shock,” Mr. Sulzberger is quoted as saying. “The Times,” he says, slapping his palm on the table, “is Not. For. Sale.”

Yet.

Leslie Kaufman and Christine Haughney on the failed merger of Newsweek and The Daily Beast:

Given that the two publications lost more than $30 million in the previous two years, he asked, why was it a good idea to put them together? And if The Beast was on schedule to break even in 18 months, how much longer would it take now that Newsweek was part of the mix?

Ms. Brown says she has no recollection of that particular meeting, but half a dozen employees who say they were present said the atmosphere immediately turned awkward. The famous editor gave no ground. The target, she said, remained 18 months.

More than two and a half years later, Ms. Brown has missed the mark. Synergies have long since slipped away. After the magazine hemorrhaged tens of millions of dollars, Barry Diller, the billionaire media mogul whose company owns both publications, publicly called the purchase of Newsweek “a mistake” and the original plan to save it “stupid.” On Saturday, the company announced that it had sold Newsweek for an undisclosed amount to the digital news company International Business Times.

What’s the opposite of “flawless victory”?

John Paczkowski:

What the ruling may do — should it survive Apple’s appeal (more on that later) — is force the further evolution of the e-book business which, according to Lemley, is in desperate need of a serious rethinking. After all, in a digital world, books are no longer as expensive to produce and distribute.

That’s something lost in all of this — the publishers are so worried about maintaining prices, but the world has entirely changed. With eBooks, they no longer have to print, store, and ship books (well, for the most part). So shouldn’t the costs come down?

Meg James on the very late Friday (before a holiday weekend, no less) announcement that News Corp. would write-down up to $1.4 billion due to the decaying value of its publishing assets:

The company’s U.S. publishing assets also contributed to the reduced outlook in future cash flow. Six months ago, News Corp. revealed that the publishing unit would have suffered a $2-billion loss last year if it had been a stand-alone company. Previously, News Corp. has written down the value of the Journal after News Corp.’s $5-billion acquisition of parent Dow Jones & Co. in 2007.

This situation does not seem tenable. You have to wonder how long it will be until even The Wall Street Journal — which has the highest circulation amongst U.S. papers — decides to stop the presses (literally, and go digital-only).

John Gruber:

Their success was that they got over 100,000 readers to pay at least $40 per year for a subscription. How many digital publications can say that? Not many. And the iPad — with Apple’s simple, trusted, familiar payment mechanism — made that possible. The Daily’s problem was simply that they weren’t conceived to operate on $5 or $6 million per year in revenue. A smarter, smaller team could.

After reading this, I must say that I have a lot of respect for not only what BuzzFeed is going after, but how they’re going about it. My favorite part is about respecting the readers. It’s amazing how many sites/publications fail to adhere to this simple and crucial principle.

To that end, BuzzFeed CEO Jonah Peretti:

First of all, we don’t publish slideshows. Instead we publish scrollable lists so readers don’t have to click a million times and can easily scroll through a post. The primary reason to publish slideshows, as far as I can tell, is to juice page views and banner ad impressions.  Slideshows are super annoying and lists are awesome so we do lists!

Report Declan McCullagh and Greg Sandoval:

The U.S. Justice Department’s legal pursuit of Apple for alleged e-book price fixing stretches the boundaries of antitrust law and is likely to end in defeat.

To be clear, that’s just the case against Apple. McCullagh and Sandoval note that the case against the publishers themselves seems much stronger. Given the evidence laid out right now, they’ll simply have a hard time proving that Apple was colluding in this from the beginning. 

The fact remains that what this really is about is Amazon versus the publishing industry. We’ll see how this plays out but Apple appears to be more of a (albeit willing) pawn.