2/14/2013 10:28 PM ET|
People magazine in play in Time Warner deal
Magazines aimed at women sell much better than general-interest titles.
Under a scenario outlined by The New York Times, Time Warner and Meredith would set up a joint venture of soft news magazines targeted to women, such as People and Better Homes and Gardens, a Meredith title that earned more than $775 million in ad revenue last year. Meredith is especially keen on Time Warner titles that appeal to a female audience, such as In Style ($435 million in ad revenue) and Real Simple ($242 million).
Why women? Advertisers want to target their messages to as specific a demographic as possible. That's great news for publishers such as Meredith, which calls itself "the leading media and marketing company serving American women." The losers wind up being general-interest titles targeted wide audiences.
That may explain why Time Warner, whose roots in the magazine business date back to Time magazine's start in 1922, is retaining hard news titles such as Time, Sports Illustrated and Fortune, according to Bloomberg News. Even sports attracts a diverse audience. A 2011 eMarketer survey found that 50% of the women who responded identified themselves as a sports fan.
Many details regarding the deal are still being worked out. According to the Times, Time Warner shareholders would control two-thirds of the new company, which would also pay a special dividend to the parent company of CNN and Warner Bros. It would also borrow several billion dollars, the paper says.
Time Warner has been under pressure from investors to shed its magazine business, its smallest and least profitable, for years.
--Jonathan Berr does not own shares of the listed stocks. Follow him on Twitter @jdberr.
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