Publishing/Writing: Insights, News, Intrigue

02/20/2013

Inside Intrigue Re Readers Digest’s 2nd Bankruptcy Filing


Did you realize that Readers Digest reaches more $100,000 + income households than Fortune, The Wall Street Journal, Business Week and Inc. COMBINED ? Well, it does — according to Mediamark Research and Intelligence (also known as Growth from Knowledge – Mediamark Research and Intelligence [GfK MRI]).

RD is a veritable empire — albeit, one in stormy straits.

I grew up devouring Readers Digest and dearly love(d) it for the enlightening, timely and clearly written articles/stories AND the superb humor. Apparently, this venerable piece of consumer literature, enjoyed around the world in numerous languages, has encountered some rough waters — due, most probably, to bad management decisions in what had become an unwieldy, global empire during an explosively changing publishing landscape (in this writer’s humble opinion).

Let’s get into some key numbers and behind-the-scenes happenings with Michael Rondon writing for FOLIO magazine:

Behind RDA’s Chapter 11 Filing

RDA considered a sale, major creditors include several former employees.

RDA Holding has filed for Chapter 11 bankruptcy protection for the second time in four years.

The move to convert $465 million in debt to equity comes after the company considered a “wide range of alternatives” however, according to a statement from Robert Guth, president and CEO of RDA.

Guth was unavailable for comment in the lead-up to first-day motions with the U.S. Bankruptcy Court for the Southern District of New York, but some in the industry believe a sale of at least part of the company had been one of the “alternatives” explored.

“I do believe that RDA was approached by buyers and in conversations,” says Reed Phillips, CEO and managing partner of DeSilva + Phillips, an M&A advisory firm specializing in media properties.

Selling off titles wouldn’t be a first for the company, who parted with Every Day with Rachel Ray in October of 2011 and AllRecipies.com in January of 2012–both purchased by Meredith. Those are among the more publicized changes since Guth took over about a month before the Rachel Ray deal, but they’re part of an on-going evolution, he says.

“The complex transformation that we began 18 months ago under the leadership of a new senior management team has resulted in a more streamlined, more focused, and more profitable business,” Guth says in the statement.

Since then, business has been mixed though. Year-over-year operating losses decreased in first three quarters of 2012, while revenues took big hits. Yearly ad pages were up on two of its three biggest titles, Reader’s Digest and Family Handyman, but down on another staple, Taste of Home, according to the Publishers Information Bureau. Circulation has remained relatively steady over that time for each, per Alliance for Audited Media numbers.

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12/28/2010

Reader’s Digest Takes Center Stage with New Products


Readers Digest (RD), having emerged from Chapter 11 last February, is rolling out new print AND online products to grow and , hopefully, prosper in the 21st century!

Read my previous posts on the RD dilemma for background: RD Morphing into 24 New Products, RD Association(RDA) Emerges from Chapter 11 and RD, Playboy and Others Miss Rate Base

Readers Digest is 88 years old (that’s even older than I am!) and it’s editorial insight and expertise is unsurpassed! Not to mention the extremely relevant cutting edge humor. I wish them all the success in the world…and then some…

Matthew Flamm, writing for Caine’s New York Business, has these details:

Reader’s Digest gambles on new products

The venerable company is rolling out several mobile products next month, as well as a new brand, Best You, which will target women over 35 with e-mails, magazines and books.

The 88-year-old brand, which previewed a coming overhaul in September, will debut a slew of new online and print products next month. First up is Best You, a brand launching Jan. 6, the New York City-based Reader’s Digest Association Inc. announced on Tuesday.

Best You, which will target women 35 and older, will include a free daily e-newsletter, a series of newsstand-only magazines and a new book imprint, all focused on health and wellness subjects. The imprint’s first title will be Le Personal Coach, by French trainer Valerie Orsoni.

Reader’s Digest had initially planned to roll out a Best You magazine last March, but cut back on plans for that title and others following the continued weakness of the economy and the company’s bankruptcy filing last summer. The publisher emerged from bankruptcy in February.

A new Reader’s Digest will also debut next month when the redesigned magazine hits newsstands Jan. 18. In a money-saving strategy that the company describes as going back to its roots as a content curator, the 10-times-a-year title will mostly consist of stories that have already appeared elsewhere.

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09/14/2010

Readers Digest Morphing into 24 New Products


Readers Digest, one of my all-time fave magazines, just emerged from bankruptcy last February and has struggled somewhat. Now RD is moving forward while at the same time going back to it’s roots as a content distiller. RD has just finished a restructure that will get it into the world of websites, mobile apps, newsletters and a new book imprint.

This is exciting stuff for RD and I’m looking forward to viewing the finished products.

Here is more by Matthew Flamm from Crain’s New York Business:

Reader’s Digest will be going back to its roots—and saving money—with a redesign that will launch in January and turn the 88-year-old magazine into a distilled version of mostly repackaged content, said company executives who unveiled their plans for the flagship brand of the Reader’s Digest Association on Tuesday morning.

The company, which emerged from bankruptcy in February, will launch a new website, called the Reader’s Digest Version, as well as a daily e-mail newsletter and a book imprint, both under the name Best You, presenting health and wellness information targeted exclusively to women. The company published several test issues of Best You as a magazine in the last year before pulling the plug.

Reader’s Digest will also step up its newsstand-only publications, adding five new special interest magazines for a total of 13 in 2011, and launch one new mobile application each month. The apps will be built around familiar Reader’s Digest elements like humor and home repairs.

Altogether, the brand will be introducing 24 new products over the course of the next year. The announcements coincided with the company moving its headquarters into midtown Manhattan from its longtime home in Pleasantville, N.Y., as part of the consolidation that followed the bankruptcy.

“What people need is selection,” said Daniel Lagani, president of Reader’s Digest Media, at Tuesday morning’s event. “It’s a return to the brand’s role as the original curator of content.” He added that the many different elements launching next year will be treated as “one entity” and pitched to advertisers as “brand centered, not platform centered.”

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02/16/2010

Reader’s Digest, Playboy, Others Miss Rate Base


A magazine’s “rate base”, as I understand it, is the rate charged to advertisers in the magazine and is related to the circulation figures of the magazine…The higher the circulation the higher the cost to advertise in the periodical since it reaches more potential buyers.

FOLIO magazine’s Jason Fell wrote an informative article on this subject today:

While many of the consumer magazines included in the Audit Bureau of Circulations’ FAS-FAX report for the second half of 2009 made their rate base requirements for the period, many others, including some heavyweights, did not.

Of the 30 or so large circulation magazines with rate bases of 2 million or higher—including AARP, Time and Better Home & Gardens—Reader’s Digest and Playboy were the only titles to fall short of their circ. guarantee. Playboy reported an overall circ. of 2,021,751, more than 570,000 off its 2.6 million rate base. The magazine also fell short during the first half of 2009, delivering a total paid and verified circ. of 2,453,266.

With an 8 million rate base, Reader’s Digest delivered an overall paid and verified circulation of 7,099,558 during the second half. Last summer, the magazine said it was cutting frequency and reducing its rate base to 5.5 million—an 18-month process that would start with the February 2010 issue. A Reader’s Digest spokesperson told FOLIO: that missing its rate base during the second half last year was part of that strategy.

Generally, when a magazine doesn’t make its rate base, its publisher is required to issue refunds to its advertisers or make other concessions.

A number of celebrity titles also had trouble reaching their minimum circ. numbers during the second half of 2009. Among them were American Media’s Star (1.1 million rate base compared to 1,035,713 overall circ.), OK! (800,000 rate base vs. 753,886 overall circ.) and Bauer’s In Touch (800,000 rate base vs. 790,395 overall circ.).

Chicago-based Johnson Publishing also failed to reach its circ. promises. Ebony reported an overall circ of 1,169,870 compared to a rate base of 1,250,000. Jet, meanwhile, missed its 900,000 rate base, reporting an overall circ of only 795,055.

Other notable titles that missed rate bases were Harper’s (200,000 rate base vs. 195,114 overall circ.), Soap Opera Digest (500,000 rate base vs. 487,629 overall circ.) and Emmis Publishing’s Los Angeles (150,000 rate base vs. 140,022 overall circ.).

Biggest Overall Gainers

Although the vast majority of magazines claiming rate bases saw overall total paid and verified circulation declines during the last six months last year, some in fact reported significant gains. The biggest growth came from Rodale’s Women’s Health, which saw overall circ grow 21.5 percent to 1,454,545.

That was followed by Martha Stewart Living Omnimedia’s Body + Soul (+19.7 percent to 678,136), Birds & Blooms (+14.7 percent to 1,737,397), Meredith’s Siempre Mujer (+11.8 percent to 458,000) and All You (+10.6 percent to 1,023,242).

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