So after Time Inc. made it through those tumultuous rounds of layoffs and other cutbacks a few months ago, it's all clear sailing these days at 1271 Sixth Avenue, right? Well, maybe not. Chairman Ann Moore's quarterly status report went out to Time Inc.'ers yesterday, and it starts on a bad note — that Q1 at the mag publisher was "less robust than we expected," coming in below last year's Q1. But then things pick up: The new management structure is leaner and faster! The mags are all industry leaders! The whole thing is a very important part of Time Warner! The web! And, of course, there's this bit of heartwarming job-security news: After all those earlier layoffs, "we do hope the majority of eliminations is behind us." We're sure those of you still toiling at the company will sleep soundly after that declaration.
Moore's full memo — full of encouragement for maintaining internal compasses — is after the jump.
May 23, 2006
To: Time Inc. Staff
From: Ann Moore
Re: Q1 Update
A few weeks ago Time Warner announced that our company is off to a good start this year, with first quarter financial results meeting overall expectations. I want to take this opportunity to update you on Time Inc.'s performance and progress against our 2006 goals. As Dick Parsons stated, it is fair to say that Time Inc.'s first quarter was less robust than we expected. Our earnings were down year over year due to challenges you are all well aware of, including continuing volatility in the advertising business.
To address these challenges we recently streamlined our management team. I'm pleased to report it has already had a major impact in how this company is run — decisions are being made at a faster rate; we are integrating and leveraging our collective assets more effectively; and we are working to improve information flow and internal communications.
Unfortunately as we've reorganized the company, we've also had to eliminate a number of positions. I know it's been unsettling for many of you, but we do hope the majority of eliminations is behind us. I also want to emphasize that cost-cutting was not the sole factor in this effort. In order to operate more efficiently, effectively and competitively we have had to reallocate our assets to invest in areas of higher growth. While magazines continue to be our core business, we are transforming Time Inc. into a multi-platform media company and translating our best-in-class content to other formats which complement print — including television shows, satellite radio, events and conferences and, of course, digital.
Investing in online/wireless has been one of our top goals for 2006 and we are having good success. Sports Illustrated continues to lead the magazine industry in delivering its content across new digital platforms. SI.com continues to be the largest magazine-based website. The swimsuit package in the first quarter with online and video download components was dazzling; and more recently, columnist Rick Reilly's weekly video segment, Riffs of Reilly, is now available exclusively on Verizon V-Cast mobile phones and SI.com. According to Nielsen/Net Ratings, CNNMoney.com reaches 8.5 million unique visitors, and in just five months since launching, it has catapulted from being the 8th largest online financial destination to the 3rd. People.com continues to break news regularly, most recently the birth of Suri Cruise, and the site was just recognized by MIN as "website of the year." Essence.com broke news last month with their reporting on developments in the Duke lacrosse team case. Time.com is also breaking news, like the resignation of Rep. Tom Delay a few weeks ago. With the groundbreaking addition of bloggers such as Andrew Sullivan and Ana Marie Cox, traffic is up over 40% from last year. EW.com is attracting more visitors than ever thanks in part to Jessica Shaw's regular Friday interview with each week's exiting American Idol contestant.
Another 2006 goal is repositioning our core titles for growth. By aggregating the selling and marketing operations of our business titles into the new powerhouse Time Inc. Business and Finance Network, we are now servicing a multi-platform business of size and unmatched scale at 20 million readers. Combining sales and marketing may not be a solution for all of our clusters, in this case it made good sense.
Our new corporate sales and marketing division has been turned into an innovative idea factory. Robin Domeniconi has hired a great team of creative marketing problem-solvers and they have quickly developed a game plan for success. One of their primary strategies is to drive research and insight across the entire organization leveraging our unrivaled knowledge of the consumer under the leadership of Betsy Frank, the widely recognized research "guru," who joined us from Viacom last month. Finding, retaining and motivating the best talent in the industry continues to be a top priority in all areas of the company.
It's important to remember that Time Inc. is still the unqualified industry leader. We're by far the top magazine company in the U.S. with four of the top ten PIB titles. Time Inc. ranks number one or two in most consumer magazine categories ranging from news, entertainment, business, sports and fashion. Internationally we're the market leader in the U.K. with IPC and we have a very strong presence in Mexico with GEE. International editions of Time and Fortune continue to be well-read and highly regarded around the world. Sports Illustrated just signed a deal to launch in China, In Style is a power brand around the world and is launching in Turkey this year, Real Simple has had a great first few months in Japan, South Africa and Greece. And we are an important and valued part of the Time Warner portfolio from a business perspective. We balance out some of the other hit-driven divisions by providing a steady flow of cash to the company.
We are fortunate that Time Inc. has some of the best and most trusted brands in the entire media landscape — that's how we must think of our assets, as brands, not just magazines. And in a time of so much information, our core competency of trusted editing skills is what will prevail. Our new Editor in Chief John Huey and the talented editorial staff continue to produce the most compelling stories, photos and content, which the industry recognized at the National Magazine Awards two weeks ago.
Working in an organization in times of change is hard. It requires a sustained effort that can take a personal toll on all of us, so I encourage you to maintain your internal compass. Teamwork and collaboration are crucial. I appreciate your focus during this period of transition and thank you for your hard work, professionalism and extraordinary talent which keep Time Inc. the industry leader by every measure.