The bankruptcy of Time Company Magazine

"We've achieved a lot of proud success together, and thanks to you all so it seems possible [...] Given Time Inc. will be part of Meredith, I hope that this company and you will get the best in the future. "
The above statement was written by Time Inc. CEO, Rich Batista and addressed to all employees on Tuesday (30/1) ago. It was a farewell to Time Inc. as licensor, publisher, and manager of Time magazine, Fortune, Sports Illustrated, to People. Starting Thursday (1/2), Meredith Corporation will take over the ownership of all Time Inc. products

Meredith is a media company that publishes magazines like Parents, Shape, and Better Homes & Gardens. The transfer of ownership is estimated at $ 2.8 billion and has been done since late November last year. The Koch brothers' oil and gas tycoon also injected $ 650 million in cash.

Tidal Time Inc.
Time Inc. founded by a pair of friends from Yale, Briton Hadden and Henry Luce in 1922. The first product is Time magazine which is published in the weekly and targeting readers from businessmen.

In 1929, two years after Time released the cover of "Man of the Year" for the first time with a photo of Charles Lindbergh's pilot, Hadden died at 31 years of respiratory infections. Shortly before he died, Hadden had a will that his stake in Time Inc. will be inherited to his family and can not be sold for 49 years. Hadden's will made Luce so upset that every way was done to get Hadden's share. Finally, Hadden shares he managed to buy at a fairly low price.

With additional equity capital from Hadden, Luce expanded the scope of Time Inc.'s market and products. In 1930, Time Inc. started a business magazine called Fortune. Six years later, he bought LIFE for $ 92,000. Shortly after its acquisition, LIFE magazine featuring photography published the inaugural edition under the banner of Time Inc.

Not until then, at 1954 Time Inc. launched Sports Illustrated sports magazine. In the 1970s, Time Inc. again releasing a pair of new products, namely Money (1972) and People (1974).

Time Inc. Movement increasingly massive when in 1990 they bought Warner Communications and made the world's largest media conglomerate at the time, Time Warner, with an annual profit of $ 10 billion. Time Warner's products include Warner Bros and HBO.

Four years later, Time Inc. launched a web platform called Pathfinder that covers about 80 news content, including Time magazine. The Pathfinder is essentially a web page with links. The idea departs from the idea of ​​Walter Isaacson, Time editor at the time, who wanted readers to pay for content in the Pathfinder if they wanted to subscribe.

However, Isaacson's hopes did not materialize as expected. Pathfinders do not sell and lose $ 15 million each year. In 1999, the official Pathfinder operation was suspended.

Night Inc. Nightmare has not stopped yet. The article "Who killed Time Inc.?" published by Columbia Journalism Review mentions that in 2001, Time Inc. merged with web-based media company AOL (America Online). The hope, Time Inc. can make up for Pathfinder failure given AOL has a sizable user base, which is 26 million subscribers. However, reality speaks otherwise: AOL is no better than Pathfinder. Time Inc.'s content did not sell well and caused a loss of $ 98.7 billion in 2002.
Time editorial ranks began to clean up. They add online staff at Time.com into twenties with the task of creating 15 original stories every day, in addition to taking care of the print magazines. Their strategy was successful and in 2005 Time Inc. posted revenues of $ 5.8 billion.

Nevertheless, Time Inc. again crashed during the 2008 financial crisis hit the world. Giant companies such as IBM, Apple, Toyota, to General Motors, one by one pulled their ads so that Time Inc revenue. drastically reduced. In 2010, Time Inc. revenue down to $ 515 million-half from 2005. Two years later, revenues dropped to $ 420 million, which caused the company to lay off large-scale employees.

In 2014, Time Warner decided to break away from Time Inc. with the consideration that Time Inc. can not make money consistently. On the other hand, the farewell to Time Warner contributed to making Time Inc.'s money. became more critical of $ 1.3 billion of debt due to the purchase of UK magazine publisher IPC Media and paid a $ 600 million "special dividend" to Time Warner shareholders.
To solve the problem, it is still in the Columbia Journalism Review, Time Inc. report. plunged into a conference business held by Fortune magazine and a marketing consultancy called The Foundry. Of the new strategy, Time Inc. also made great strides with a focus on mobile and video products. Time Step Inc. sweet fruit. They are able to attract 139 million visitors for all its contents and enter the top 10 digital properties list by 2017.

But that change is not without consequences. First, digital content Time Inc. marks the shift from a magazine culture that appreciates critical writing, fresh perspectives, and in-depth reports into fast and short-headed news. Second, focus Time Inc. to digital make print revenue decline that impacted the drop in stock prices Time Inc Third, the wave of layoffs and the withdrawal of some writers and senior editors is inevitable.

Time Inc. Steps to survive unable to cope with the decline in print revenue and advertising as a whole. In 1999, when advertising revenue and print sales circulation increased, Time Inc. garnering $ 4.6 billion in revenue and $ 627 million in operating income. In 2016, Time Inc. earned only $ 3 billion and operating profit of $ 2 million. In the following years, print sales declined sharply.
Finally Time Inc. can not last longer. The strategy of dealing with competition in the internet is very dynamic, concentration into advertising is so high, and the failure of management adaptation in the digital age to make this company stagger. The deal with Meredith is considered "the only way out."

"Time Inc. very slowly embracing the internet and seeing late that the internet will be the main format in the future, "explains Chris Roush, professor of media and journalism at North Carolina University.

How is the Next Time Fate?
The acquisition of Time magazine by Meredith involved the involvement of the Koch Brothers by an injection of $ 650 million. Koch Brothers-Charles and David-is a billionaire duo from the US who controls the oil and gas giant Koch Industries. Their influence is very strong because Koch Industries is now the second largest private company in the US with a value of $ 115 billion. David Koch is the richest New York resident. Together with Charles he occupied the 8th position of the richest people in the world in the year 2017 Forbes version.

What matters is not their wealth, but the Koch Brothers' political stance as a staunch supporter of the Republican Conservatism, a donor of the US libertarian right-wing movement, and what the environmentalist is most concerned about is that the Koch Brothers can not believe that true global warming is happening.

In a Meredith statement cited by CNN, the Koch brothers will not get seats in the editorial board and "will not affect Meredith's editorial or managerial work." This is fair because the Koch Brothers only get 10 percent of Time Inc.'s total holdings But is that right?

Some parties still voiced their doubts. Richard Stengel, former Time editor, reveals that sooner or later Koch Brothers will use the magazine as a vehicle to support their political ideology. It is naive, so Stengel, to believe that the Koch Brothers will not affect the editorial ranks of Time.

International editor of Time Charles Alexander through his writing in The Nation titled "Do not Let the Koch Brothers Buy Time Magazine" says Koch Brothers lot of modern finance in the US conservative movement, including financing of large-scale campaign to get people not to worry about climate change.

The Koch Brothers' grip is not as strong as imagined. But who can predict that one day Time will issue a non-fact-based report about global warming?

source: tirto id