Revenue Falls Again for Time Inc.
Publishing revenues were down again again at Time Inc. in the fourth quarter of 2010, though company executives were quick to note positive trends as the sector continues to recover from a disastrous 2009.
Time Inc. saw a 4 percent drop in revenues in the fourth quarter, including a 1 percent decrease in ad revenue and 7 percent decrease in subscription revenue. Ad revenue declines were mainly due to the transfer of the SI.com and Golf.com websites to Turner in the fourth quarter, a company press release said.
Time Inc. reported a 2 percent revenue drop for the year as a whole, to $3.7 billion. Ad revenues grew 3 percent overall last year, a gain offset by declines in subscription revenue of 2 percent (reflecting a decrease in U.S. subscription and newsstand sales) and 17 percent in other revenues-primarily, due to the sale of Southern Living at Home in 3Q 2009 and lower revenues at in-house magazine subscription marketer Synapse Group Inc.
As a result of internal cost cutting, adjusted operating income rose 89 percent, while operating income rose 109 percent to $269 million, the company said.
"Although the environment is still challenging for print magazines, we intend to grow profits again in 2011," Time-Warner CEO Jeff Bewkes told analysts in a conference call Wednesday. "... That will require strong execution in traditional areas like circulation and ad sales, but will also come from new areas of focus like marketing services and e-commerce. At the same time, we will remain focused on our operating efficiency."
Bewkes said tablet products were key to Time Inc.'s magazine strategy. "For digital magazines to take off we need to offer consumers the flexibility of purchasing single-copy digital issues, having digital-only subscriptions and having a content everywhere approach that allows us to offer dual print and digital subscriptions," he said.
Time Inc. is discussing ways to achieve this flexibility in purchasing and access with a number of tablet manufacturers, he added. "It's critical to the long term health of our business that we be able to do that while also retaining the customer relationship and the data of what they are using and what they like."