Church vs. State Is Dead. Who Cares?

Time Inc. has other, bigger problems to solve

Time Inc. sent a shiver through publishing circles with the news that it would have its editors report to the business side, undoing a long-standing tradition at the company designed to preserve editorial independence. The rationale to reduce the edit/sales wall was that a closer working relationship would let the brands be more innovative and be better able to respond to market demands, but raised concerns that editors would have a harder time pushing back when business interests threaten reader trust.

All but forgotten was the more important news that the company had hired a consumer marketing head, filling a long-vacant role. As it prepares to spin off from Time Warner next year, Time Inc.’s biggest problem isn’t the edit/sales balance of power—it’s finding a way to replace shrinking print revenue. Sales and edit have been working more closely together for years, and it doesn’t seem to have helped the industry much. (In fact, the editor in chief’s power at Time Inc. has been on the wane anyway; it’s been years since the person occupying that post sat on the board.)

For all this rapprochement, print advertising in consumer magazines has still plunged 27 percent in the past five years.

Ironically, the new structure adopted by Time Inc. actually is much like the one in place at Meredith—at one time Time Inc.’s presumed merger partner—where editors report to the heads of their business units. Condé Nast editors are now expected to think as much about brand extensions as their printed product. At Hearst Magazines, editors report to a business head (David Carey) as well as an editorial head (Ellen Levine).

Where will Time Inc. find its growth opportunity? Ideally it would be in getting consumers to pay more for its content. But the publisher was late to the tablet subscription game, and the lack of a head of consumer marketing—whose job it is to crack the paid content code—hasn’t helped.

There’s talk of native advertising, which online publishers are grasping at to preserve premium ad rates online. But it remains a tiny part of Time Inc.’s business.

Native advertising defies accurate measurement because there’s no standard definition. But eMarketer estimates that sponsorship ads, which include shareable ads and brand-created articles that are often considered native, make up less than 5 percent of digital ad spending.

Advertiser demand for video is still growing—another area where the company is just getting going. Time Inc. may have scale, but its brands are all over the map, making it hard to tell a unified story to advertisers and Wall Street.

Advertisers want results, not scale, anyway, said news industry analyst Ken Doctor. He argues that Time Inc. has to figure out how to sell a suite of marketing services, along with growing consumer revenue. “Magazines have underpriced themselves for such a long time, so they’re starting at a low base,” he said.