BUSINESS BLOGS
BUSINESS BLOGS
category: business
22 Nov 2008
related tags: Management | Magazines | maxim |

Traditional media firms have two main strengths over their online brethren:

- established and deep relationships with ad agencies and marketers,
- actual revenues.

Their main weakness is their distribution is antiquated.  Take print: when I look at a yellow pages book now, I laugh.  My daughter will in turn laugh when she thinks that media was printed on paper, bound and shipped to us.  It’s not that print media will die and disappear, au contraire, it will live on… in museums.  Jokes aside, print won’t disappear, but there is nothing too prophetic about saying digital media has decimated print.

The sooner print media companies understand that they need to leverage those two strengths above to dive into digital, the sooner they earn a shot at surviving.

This year we’ve seen two institutions of men’s lifestyle publishing: Playboy and Maxim, take a pounding.

Felix Dennis last year sold Maxim and Blender.  Playboy is on the ropes.  I’ve said this before, I will say it again: I don’t for the life of me don’t understand why neither firm bought my old company AskMen, who now has some 5-10 million uniques and is part of News Corp.’s Fox Interactive Media.  When I ran sales for the company from 2001-2005 (I joined as employee number 9 in 2000 during the nadir of the dot com crash) I generated $10M for them… in my last year, with two account executives, we generated about $3M.  These were admirable for our resources and the fact that I ran sales 400 miles away from Madison Avenue, but they were puny by print media standards.

Today I suspect Fox’s world class sales machine generates $5-10M in ad revenues for AskMen.  Mind you, this is a drop in the bucket for IGN Entertainment, who itself does $50-100M in ad revenues… which in turn is a drop in the ocean of FOX Interactive Media, who powered by MySpace does over $1B (disclaimer: my new company WatchMojo.com provides video content to MySpace TV).

However, when you consider that print is being torn to shreds, you have to wonder, why didn’t Playboy or Maxim acquire AskMen. From WSJ, via Paid Content:

Since then, its EBITDA has taken a nosedive, from about $28 million then to about $8 million that it is expected to generate this year. Kent Brownridge, who was brought in as the CEO when Alpha got acquired, left earlier in August. The digital head Doug Warshaw, who joined in fall last year, left after a few months as well.

I know we’re comparing apples with oranges (top line revenue of a lean online magazine vs. EBITDA for a print media behemoth) but I guarantee you that had Maxim bought AskMen, their EBITDA would easily be twice as large, if not more.

Why?  The audiences were similar and the print sales team could have leveraged their relationship to generate far more ad sales for the online property.  Sure, in the 2000-05 period, print sales forces would “throw in” online for free.  I had heard stories of this happening at Conde Nast, Dennis Publishing, etc.  Mind you, when I first wrote this, Conde Nast emailed to say “it ain’t so”.  Fair enough, I was going with what ad buyers were telling me (naturally, they had their own reason for saying this to me).  We had to pull out all of the stops to generate business at the expense of the print firms.  But over time, print and online merged.  Look at what is happening now to Forbes.  It’s long overdue, and arguably, it was driven by the economic meltdown.  Thank god though, Forbes had no reason to keep online and print separated, if you ask me.

This is all moot now, of course, Maxim or Playboy did not buy AskMen… they never really got serious about the Web… and look at them now.

But also in the past was my somewhat-serious attempt to buy Maxim Magazine (well, with the help of private bankers) when I found out it was about to be sold off.  As much as I have respect for the people behind that acquisition, I asked at the time:

For Brownridge (don’t know the man, I’m sure he’s a gentleman and a scholar) to think that raising private equity money and trying to drain the Atlantic Ocean one drop at a time is sheer lunacy.  It’s insanity, in the sense of the definition.

My strategy would be to leverage the Maxim and Blender brand and reposition Stuff (right now, it’s like a diluted Maxim, I’d make is a straight on tech, electronics and well, stuff magazine) and focus online, all the way.

Their text-based archives?  All online.

Their image archives?  All online, and on your phone.

Their video-based events?  All online.

Don’t get me wrong, offline in the form of events and print have a place in any company, but the core of any media company will be digital, not print.

Hmm… I should also mention that I have a proposal for a video partnership sitting on Maxim’s desks, it would be nice to see that move ahead, no?

Anyway, according to the same WSJ report, Cerberus Capital controls the chips now…  You know where to find me, gentlemen: there’s a lot of value under the hood, don’t flush it down the drain… by being insane: become a media company, not a print one.