In the past few years, we've seen Hearst Magazines acquire Lagardère's international magazine portfolio (102 editions across 15 countries), and Time Inc buy out American Express Publishing.
Meredith Corp has acquired Every Day with Rachael Ray and the huge, thriving food site Allrecipes from struggling Reader's Digest Association, the EatingWell Media Group, and two large parenting titles from Bonnier, along with many television, marketing services, digital and mobile properties. And now, Meredith has inked a 10-year licensing deal with Martha Stewart Living Omnimedia (MSLO) to run all operations save editorial content generation for Martha Stewart Living and its wedding magazines, websites and video content library.
That news came shortly after a less attention-grabbing but telling development: Hearst Magazines' launch of a group offering publishers with circulations of 300,000 to 1 million outsourcing for basically any or all services needed, including consumer marketing, subscription fulfilment, procurement, production, development and management of websites, apps and e-editions, financial management and yes, even "content creation". Hearst, of course, owns CDS Global, by far the dominant fulfilment bureau for consumer magazines, with 450 print and digital client titles (supplier consolidation is also rampant).
Meanwhile, the speculation that Time Inc will be acquired, possibly as early as next year, has renewed with a vengeance since its spin-off from Time Warner in June. Citigroup media analyst Jason Bazinet noted that financial pressures on the magazine industry will almost certainly prompt more consolidation, and that Citigroup (like others) believes that Meredith is the most likely potential Time Inc buyer. Further expanding its scale with such an acquisition would, in Bazinet's estimate, enable Meredith to slash some $175 million in costs.
Meredith's previous negotiations with Time Warner over Time Inc reportedly foundered because it was interested only in acquiring the titles that could further blow out its huge database of female print and digital readers / customers, who are the foundation for its particular strength in the food advertising arena (a category that's performed better than most others in recent times). But it's certainly conceivable that, with Time Inc now needing to survive on its own, the companies could work out some full or partial acquisition or operations / resources-sharing deal that benefits both sets of shareholders. Scale imperatives are making partners of companies that years ago wouldn't even have agreed to one-time list exchanges.
With traditional print advertising spending in decline, programmatic ad buying poised to dominate digital media (objective: maximum eyeballs at minimum cost), paper as well as postal costs on the rise, and the traditionally profitable newsstand channel dwindling, finding cost-effective ways to deliver sufficiently large numbers of Millennial and Gen X audiences to advertisers is the key to the profitability and futures of large, traditionally advertising-dependent publishers.
Importance of scale
Meredith president and CEO Stephen Lacy was candid about the scale realities in a recent interview with WWD. He observed, for instance, that despite the high-quality content and "amazingly loyal consumers" of Martha Stewart's magazines, profitability and growth are "very difficult for any standalone media brand" today. Meredith, he confirmed, brings the ability to cross-market Stewart's media products along with its own brands, as well as "operational efficiencies due to our scale".
As for Meredith's own properties, "at this point, we would describe ourselves as pretty platform-agnostic, as long as we can aggregate a large enough consumer audience [so] that we can have a meaningful advertising play," Lacy said. "We have that in print, and we now have it in digital, as well."
Condé Nast would at first glance seem to be bucking the "bigger is better" trend, having recently sold off its Fairchild Fashion Media division and spun Lucky off into a separate company in which it's an investor, not full owner. But these are means to generating more cash and shedding money losers as Condé Nast aggressively invests in spinning its magazine brands and content into advertising-supported video series and networks, TV shows (yes, NBC is to air a comedy series based on working at a Cosmo-like magazine) and movies.
Obviously, publishers believe that consolidation, partnering and outsourcing are essential to success in today's cutthroat, constantly shifting media environment, and it's hard to argue with that logic.
But with native advertising being produced by editorial staff; custom content-producing divisions increasingly common at publishers of all sizes (not just the big ones); large publishers offering to produce content for smaller publishers; Time Inc (and perhaps others?) looking to outsource editorial jobs overseas; Forbes and its emulators welcoming content from all paying contributors on their websites; and use of automated writing platforms catching on, is it naive to wonder if at some point, magazine brands' content could become indistinguishable from one another and perhaps from the content of corner-cutting, all-digital competitors?
One of the ironies here is that Google is now giving search results advantages to content "created with a high degree of time and effort, and in particular, expertise, talent, and skill," where there is a clear line between content and promotional material. "Many high-quality publishers are already seeing huge gains in search traffic, and we can expect more tuning of the search algorithms in ways that favour good, in-depth reporting," reports Dead Tree Edition… "but publishers' increasingly reckless behaviour threatens to dash this odd-couple relationship on the rocks."
