Tough Holiday: Time Inc. Lays Off Staffers Days Before Thanksgiving

timeinclogogIt’s been widely reported that Time Inc. has been planning a rather significant round of lay-offs before the end of the year. The conventional wisdom around New York publishing circles was that the lay-offs would be coming after Thanksgiving. Unfortunately, that does not appear to be the case, as a Time Inc. spokesperson confirmed exclusively to Mediaite: “Yes, sadly there are layoffs today across a number of titles at Time Inc.”

Writing for the NY Post, Keith Kelly had previously reported last Thursday that layoffs would be coming after several staffers would volunteer for buyouts.

“The biggest magazines in the Time Inc. empire — People, Time, Sports Illustrated, Fortune and Money — should find out today how many volunteers have stepped forward to accept buyout packages.

It appears that not enough staffers stepped forward for a buyout to preclude further cuts in staffing. The spokesperson for Time Inc continued, “Today’s layoffs will mean the vast majority of layoffs announced earlier this month will be complete.”

At this point, no numbers have been confirmed as to total staffers cut.


Original sin

[Crossposted from Buzzmachine]

Like priests looking for someone to sacrifice, Alan Mutter, Steve Buttry, Howard Owens, and Steve Yelvington have been on the lookout for the sin that led newspapers astray. For Mutter, it’s not charging; for Buttry, it’s not innovating; for Owens, it’s tying online dingies to print Titanics (my poetic license); for Yelvington, it’s inaction.

But I think Owens hit on it when he wrote this: “I realized I needed to flip the expense/revenue picture upside down. Instead of thinking about how to generate more cash, I needed to figure out how to create a news operation that could exist profitably based on a reasonable expectation for local online revenue.”

Right. In other words, the sin was not running a business. It was not creating a sustainable P&L.

Newspapers have been too busy trying to protect specific budget lines that protected specific interests – the size of the newsroom, the ego expressed in gross revenue that yields stock performance and salary bonuses, the size of unionized staffs (up or down), the rules that governed advertising relationships even as they disappeared. They made preservation their mission.

What they should have done instead is rethink the bottom line: How is journalism going to be sustainable in new business realities?

Said Owens: “In a market where the newspaper newsroom might cost $10 million, I knew how to make $1 million online, or even $2 million, but I didn’t know — and still don’t — how to make $10 million. So if I can make a million online, why do I need operate a $10 million newsroom, especially given the greater efficiencies of online publishing?”

He built a realistic budget based on new business realities. Now picture news executives across the country hitting themselves on the head saying, “Damn, why didn’t we think of that?” They should have. But to do so would have required them to completely tear apart their businesses. Witness Detroit, banking, retail, advertising, insurance, and every other industry undergoing upheaval – nobody wants to do that.

Just as the bloggers linked above took their share of blame, so will I. Owens suggests that the problem with tying old and new operations together. At Advance, where I worked for a dozen years, we created separate online companies, which had some benefits: enabling the sites to build what was right for online (that is, interactivity), creating real value for advertising (rather than throwing in online as value-added), creating smaller and differently skilled staffs. But it also created problems: sites that were dependent on newspaper content, rivalries that killed collaboration and limited the responsibility anyone would take for the future. In the end, everyone needed to rethink what they were creating and what value it had, how they were creating it, how they related to their communities, and how the business could be run. But I didn’t see that happening anywhere in the industry. Everywhere, I saw people looking for someone to blame and somewhere to hide. I don’t put all the blame on the individuals because that’s how companies and industries operate.

Individuals who want to succeed in this upheaval become entrepreneurs. That’s what Owens – and many others – are doing. That, I’ve come to see, is the basis of the future of news.

In our New Business Models for News Project at CUNY, we threw out the old business assumptions with the old business. That’s why we tried to answer the tough question people were asking: What happens to journalism if the paper disappears? (their implied answer was that journalism does, too). What we came up with was one entity being replaced by well more than 100 entities – 1,000 entities, perhaps – each run according to new opportunities and needs, each smaller, each contributing real value, each sustainable (some very profitable; some choosing no profit). Everyone in this ecosystem has to think about running a business rather than preserving one.

Someone else looking for sinners is James Murdoch, whose MacTaggart Lecture at the Edinburgh Television Festival excoriated the BBC for bigfooting the news market in the UK and the government for enabling it and for regulating everybody else. I agree with him to an extent, this extent: that profit, in his words, will make journalism sustainable, independent, and innovative.

Except I doubt that this sustainable, independent, and innovative journalism will necessarily come from Mr. Murdoch’s father’s business and its cohorts because they are the ones that even today are trying to maintain the scale and models for their old businesses rather than inventing new ones. Look, instead, to the entrepreneurs who are starting over and rethinking the business from the bottom up, as Owens is.

Twitter Start-Up Funding, By The Numbers

New funding may be sluggish, but there’s at least one category that investors are more than happy to pour money into: Twitter-related startups. On its blog today (via Silicon Alley Insider), startup site ChubbyBrain tallies up the action and finds that to date, $23 million has been put into 11 startups hoping to make a business around the microblog. (That’s half the $55 million that Twitter itself has raised). In a sign, perhaps, that investors aren’t quite sure how to place their bets, however, no one sub-sector accounts for the majority of the startups getting funded — and most of the investments tend to be small. However, expect search-related fundings to take the majority of funding amounts going ahead, considering how the debate around Twitter is now moving from adoption to real-time search and discovery. Analytics is likely to the second biggest pie, as publishers and marketers try
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Digital Marketer Sapient To Buy Nitro Group

Acquisitions of ad networks have ground to a halt in the past year. But Sapient still wants to do some shopping. The digital-marketing firm said it intends to buy Nitro Group. Terms of the acquisition weren’t disclosed, but the WSJ cites a source close to the companies as valuing the deal at $50 million. The combo will extend Sapient’s presence across four continents, by connecting with the offices belonging to New York-based Nitro, which was founded in Shanghai. Although it runs an ad net, Nitro is considered a full-service agency. The deal is a twist on the usual arrangement, where a traditional ad firm buys a digital one. The recession will likely force a combination of all kinds of ad agencies, as the business continues to struggle amid a severe pullback in client spending across the board. Release