Twenty-three. That was the number of times the word “digital” was used in a press release Wednesday revealing that Barry Diller’s Dotdash had acquired Meredith Corp.’s magazine business in a deal valued at $2.7 billion. In contrast, “print” was used just twice and one of those mentions was to point out that Meredith’s digital ad revenue has already surpassed its print ad revenue for the last three quarters.
So what does this mean for the future of print at the magazines, which include People, InStyle, Entertainment Weekly, Shape, Magnolia Journal, Sweet July and Southern Living?
Through its acquisition of Time Inc.’s assets in 2017, the Des Moines, Iowa-based Meredith became the U.S.’ biggest magazine publisher and while rivals cut print during the pandemic, only two Meredith titles (Entertainment Weekly and Southern Living) reduced frequency, although it did offload Travel + Leisure to time share company Wyndham Destinations for $100 million.
But Dotdash — whose brands include Verywell, The Spruce, Byrdie and Investopedia — is a digital publishing company and it appears to be most interested in how it can elevate that side of Meredith’s business. The combined company, known as Dotdash Meredith, expects more than 70 percent of 2021 adjusted earnings before interest, taxes, depreciation and amortization to come from digital.
“We’ve often found opportunities in the digital transformations of businesses and industries: travel, ticketing, dating, home services and now publishing. Meredith is already seeing record digital growth and we think Dotdash can help accelerate that growth,” said Joey Levin, chief executive officer of InterActiveCorp, the holding company of Dotdash, in the statement. Indeed, Diller has built IAC on the back of digital properties ranging from Ask Media to Daily Beast and 148 others.
If that wasn’t enough of a statement, Dotdash CEO Neil Vogel chimed in further down that “Dotdash is a digital company, and we have a very different prism on how we view publishing….When we look at Meredith, we see a business that is driven by digital.”
That’s not to say print will go to the wayside, but per an IAC investors’ presentation, there will be changes to come. Its plan is to invest in top-performing titles, focus on profitability versus scale and marketing and branding benefits, noting that magazine ad revenues are experiencing secular declines, accelerated by the coronavirus pandemic.
Explaining the strategy to investors during a call Wednesday evening after the deal was revealed, Vogel stressed that “you wouldn’t do a transaction like this if you weren’t excited about the print business,” but added that the print/digital mix is ever evolving.
“Twenty years ago if you were a publisher you had a certain media mix,” he said. “Publishers today have a certain mix, and media 20 years from now is going to have a certain mix. Print we think is going to be a key part of that mix. That mix is obviously going to consistently change. And our focus on print is brand-based, not print-based, which is to say if we have the best brands in the world — which we believe we have now — we need to build durable businesses that can be stewards of these brands in the long term. And print is definitely going to be a part of that.”
But it appears an increasingly smaller part over time.
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