Why swimsuit issue is huge for Sports Illustrated
It draws in 7% of the magazine's annual revenue and is driving video views and app downloads.
One of the few things that Time Warner's (TWX) beleaguered Time Inc. magazine business can count is the Sports Illustrated swimsuit issue.
The issue is one of Time's top sellers, accounting for some 7% of Sports Illustrated's annual revenue, Forbes recently noted.
The magazine's advertising revenue last year was about $568 million, which would mean the issue -- and its associated calendars and other products -- generated more than $40 million in 2012, according to Publishers Information Bureau data from the Association of Magazine Media. That doesn't include the millions it generates in sales for swimsuit designers and accessory makers featured in the issue.
As AdWeek noted, last year's swimsuit issue got 34.5 million video views. A free mobile app got 482,000 downloads in its first week. That's why Time Warner executives are anxious to bolster the brand. They are probably livid that a fashion blog leaked the identity of cover model Kate Upton before the issue was published. Amazingly, that's the first time that's happened in the swimsuit issue's 49-year history.
Time Warner's publishing business, by far the media conglomerate's smallest, generated $3.4 billion in revenue last year, little changed from 2011. The business has been fading for years and recently announced plans to shed about 6% of its staff. Some investors have been pushing Time Warner to get rid of the magazine business for years.
The company may finally be succumbing to this pressure. According to reports in Bloomberg News and elsewhere, Time Warner is in discussions to sell all or part of its magazine business. In one scenario, Time Warner would retain Sports Illustrated, Time and Fortune.
Magazines as a whole are struggling. As The Wall Street Journal noted, newsstand sales plunged 8.2% in the second half of 2012 and paid subscriptions showed a 0.7% gain. Digital-edition sales are showing big gains, but they only account for 2.4% of the industry's overall circulation, the paper says.
If it were feasible, the company would gladly put out swimsuit issues for other titles such as Fortune and Golf magazine.
Jonathan Berr does not own shares of the listed stock. Follow him on Twitter @jdberr.
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