There’s been fallout big and small from the firing of Time Inc. CEO Jack Griffin, but the most significant was surely the loss of the company’s digital head, Randall Rothenberg.
Rothenberg’s hire just two months earlier was important for its own sake; his exit leaves the publishing giant without a leader to unify its strategy for the digital world.
Rothenberg was Time Inc.’s first chief digital officer, and given the competition for talent in the field, his hire was widely seen as a coup that spoke to Time Inc.’s digital commitment, an area in which it—like most publishers—hadn’t previously excelled. In saying it wouldn’t replace him, Time Inc. seems to be saying things are just fine the way they were.
But falling back on the status quo is itself a risky move. Something has to replace the loss in print business that all publishers have been experiencing (Time Inc.’s happens to be lagging its expectations so far this year), but Time Inc.’s digital strategy of focusing on paid apps is a business model that’s still unproven.
That’s where Rothenberg, with his industry stature and digital experience as CEO of the Interactive Advertising Bureau (a job he since returned to), could have come in handy. While his role was designed to be an advisory one, he had a broad mandate that included coordinating the company’s sprawling digital efforts and looking for new revenue sources, including acquisitions.
With the market for print advertising shrinking—Time Inc.’s revenue was $3.7 billion in 2010, down from $5 billion in 2007—the company is trying to get consumers to pay for content on mobile devices, but doing so will require reversing years of consumers being trained, through discounted subscriptions and free Web sites, to pay little or nothing for magazine content. There’s also risk in thinking consumers will port their magazine subscription habits over to their mobile devices, despite the popularity of paid mobile apps.
(In a December survey by Business Insider, iPad owners reported that far from abandoning the free Web, they spent the biggest percentage of their iPad time—38 percent—browsing. Games and other apps, meanwhile, took up just over 27 percent of iPad time.)
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