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Time Sees the Future and its DrunkenStepfather

Stocks in this article: TWXNWSA

"If the primary purpose of your digital properties is to drive paper, you're thinking about it backwards," said Savar, who started Big Fuel in 2004 and the sold it two years ago to Publicis Groupe (PUBGY), the world's third-largest advertising agency. "As for pop-up ads, that's a very old-world experience and people don't take to that today."

Savar is a new-fangled advertising exec, so his jargon can be unwieldy but instructive. Users are no longer passive readers, he says, they're "content curators." Users, or consumers, aren't just reading stories online, they're "interacting with your brand." The People brand, he says, needs to be "re-invented and become more social by design."

"This is about more than just a neat app or neat Web site," Savar said. "This is about experiencing content through a brand. It's about where the content travels and how it's consumed. People has to be more of a technology company and technology platform than a paper platform."


The same could be said for Time magazine, Sports Illustrated and Fortune, says T.S. Kelly, CEO of The Media Strategist, a business development company. These are venerable titles but they've lost ground in the branding game to Huffington Post and Politico, ESPN The Magazine and DeadSpin as well as Bloomberg BusinessWeek.

Time's newsstand sales and subscriptions declined in 2012 as advertising pages fell by 12, according to the Pew Research Center.

"Despite its title, Time is not real time," Kelly said. "The circulation number is a metric from yesterday. More important is the integration between other dimensions of consumption: content sharing, time spent on the site, the interaction rate. What users do next is arguably more important than exposure to the content itself."

That's all easier said than done, and the risks are enormous. Sales of People's print publication are a major slice of Time's revenue, so executives obliged to meet hard and fast sales targets may be disinclined to tinker with the current business model. In fact, People's print advertising numbers are growing, a sign that the brand continues to have traction. Ad dollars in the first quarter totaled $250 million, a 9.6% increase from the same period a year ago, according to the Association of Magazine Media.

But changes may be inevitable. Time, which publishes 21 U.S. magazines and operates an assortment of titles in the U.K. and Mexico, posted $3.4 billion in revenue last, a 7% drop from 2011. The company's operating income was $420 million, though that, too, was less than in 2011, a decline of 25%. Kreisky says the company may be forced to close titles that aren't the No. 1 or No. 2 in their category.

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