{"id":19861,"date":"2016-11-18T17:35:56","date_gmt":"2016-11-18T22:35:56","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/digitize-or-die-how-the-nations-largest-magazine-publisher-is-coping-with-digital-transformation\/"},"modified":"2016-11-18T17:42:32","modified_gmt":"2016-11-18T22:42:32","slug":"digitize-or-die-how-the-nations-largest-magazine-publisher-is-coping-with-digital-transformation","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/digitize-or-die-how-the-nations-largest-magazine-publisher-is-coping-with-digital-transformation\/","title":{"rendered":"Digitize or Die \u2013 How the Nation\u2019s Largest Magazine Publisher is Coping with Digital Transformation"},"content":{"rendered":"

Framing the Scene: Print Advertising in Secular Decline<\/strong><\/p>\n

The U.S. magazine publishing industry is in steep secular decline given the proliferation of mobile devices and rising consumption of digital media.<\/p>\n

\u00a0\"fundamentals\"<\/a>
\n<\/a><\/p>\n

For Time Inc. (TIME), which was spun off from Time Warner in 2014, this trend is particularly disconcerting given for most of its history, TIME has been focused on publishing a robust portfolio of traditional print-based magazines, and has amassed the largest such portfolio of popular brands in the U.S. (e.g., People, Sports Illustrated, InStyle, TIME, Entertainment Weekly, Essence, and Fortune, among others). In 2015, its U.S. print audience approached nearly 100 million viewers and its print advertising revenue share surpassed 25%[1]<\/a>. Though we have always been told that being the industry behemoth provides benefits of scale, a quick look at deteriorating newspaper businesses is quite sobering.<\/p>\n

\"rev-share_01\"<\/a><\/p>\n

Source: Stephens Inc. Research, 6.23.2016, Page 8<\/em><\/p>\n

Despite enjoying double digit<\/strong> growth in digital advertising, TIME has yet to be able offset heavy losses on the print side<\/strong>[2]<\/a>. In 2015, TIME\u2019s print advertising revenue declined $153 million, only to be offset by $33 million growth in digital advertising revenue. TIME has for some time mentioned it expects to reach an inflection point in 2016<\/strong>, with growth in digital advertising expected to offset declines in print[3]<\/a>, although disappointing Q3 results present risk to turning the corner[4]<\/a>.<\/p>\n

\"digital\"<\/a>Source: Stephens Inc. Research, 6.23.2016, Page 12<\/em><\/p>\n

TIME Must Adapt and Transform Its Business Model and Organizational Strategy<\/strong><\/p>\n

When Joe Ripp took the reins of TIME as CEO post the spin-off in 2014 (since replaced by Rich Battista), he made it clear that TIME would no longer be associated as a magazine company, but as a full-fledged media company[5]<\/a>. TIME deployed a robust digital transformation strategy, including redesigning the organizational structure and enhancing its business model in a number of key ways.<\/p>\n

From an organizational perspective, TIME has attempted to redesign positions to suit an increasingly digital world[6]<\/a>, including:<\/p>\n