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December 18, 2017

December 18, 2017

Publishing News

Meredith to Retire the Time Inc. Name
"The name Time Inc., one of the most iconic in publishing the last 95 years, will soon disappear, The [NY] Post has learned. Meredith, which has agreed to buy [Time Inc.] for $2.8B, plans on retiring the Time Inc. name--from buildings, business cards and everywhere else, sources said. The only place it will remain, in part, is on Time magazine. Word of Time Inc.’s upcoming move to the scrap heap was delivered by Thomas Harty, Meredith’s president and COO, at an 'integration meeting' at the New York publisher’s downtown Manhattan offices. Time staffers were said to be flabbergasted.'The name Time Inc. comes off the building on Day 1,' Harty said."

Conde Confirms Job Cuts Impending
NY Post: Despite "rampant rumors"--with supposed potential suitors such as Amazon, Google, Apple, Hearst and venture capital firms being bandied about--there are no plans to sell Condé Nast, according to insiders. "Following what sources have called a 'terrible year' in which Condé lost about $100M, the publisher is poised to take a scalpel to its corporate side, which includes its digital business. Its entertainment division, Condé Nast Entertainment, is also said to be under review. This follows a year of two steep rounds of layoffs in the ballpark of 200 jobs in total... A rep from the company acknowledged impending job cuts, but said they were linked to the changing media landscape. 'Our goal is to modernize and align our corporate functions to best support our brands and the company’s changing needs,' she said, without commenting on the number of cuts to come..."

Hearst Magazines Extends IMG Licensing Deal to Esquire
From a release: "Hearst Magazines today announced it has extended its product licensing relationship with IMG to include Esquire in the U.S. and Canada. IMG has represented Hearst Magazines brands including Cosmopolitan, Esquire and Harper’s Bazaar outside the U.S. since 2013, and Cosmopolitan in the U.S. since 2015... With this new multi-year agreement, IMG will focus on building a portfolio of refined and aspirational products for Esquire in markets around the world across categories including apparel, accessories, jewelry, home and travel.

Bloomberg Media CEO: Publishers Need to Stop Playing Defense
Excerpts from Bloomberg Media CEO Justin Smith, in a Q&A with Digiday: "I don’t think digital media is in crisis writ large. The standalone digital advertising model of digital media is in crisis. The advertising-dependent business model is definitely in a difficult spot. It’s not a permanent existential crisis that can’t be resolved with new thinking, innovation, better strategy and better execution. I’m hopeful these issues can be overcome. You’re seeing tons of interesting opportunities for significant growth despite the challenges... The duopoly’s increasing share of digital ad spend is a total reality and one everyone needs to reckon with. Where the fears are overstated are in two dimensions. One, if you look at Google and Facebook’s aggregate ad revenue totals, I would say the vast majority of that is direct-response advertising that’s transitioned to digital. The brand piece of it is still in traditional media. The battle over that has begun, but it’s not been decisively won by Google and Facebook. What’s also overstated is the assumption Google and Facebook are going to dominate forever. It’s a fluid situation — fluid in terms of consumer behavior, advertiser behavior and the regulatory environment. There are many potential cracks in the facade of these companies. They may be invisible to many now, but in all likelihood, these businesses don’t last forever. Fifteen years ago, we had another duopoly: Yahoo and AOL... What we say to our teams is, let’s not let the platforms solely enjoy the spoils of this incredible moment of change. Let’s find the areas where we can also benefit tremendously and not assume a defensive position and begin attacking parts of the ecosystem ourselves... When people think about managing a media business in this environment, media operators tend to think about revenue diversification. Jonah mentioned it in his memo. We think about revenue diversification also in product diversification. Another way to diversify is create new products that are related to your core business but are new things. Not enough media owners are thinking that way. They’re transitioning revenue from bucket one to buckets two, three and four." On paid digital content: "At the very premium end of the market with established and premium brands, you’ve seen a handful of success stories. The truth is, across the much broader swath of the market, paid content has not worked at all. The numbers are pretty decisive. But it’s not a permanent situation. I believe consumer behavior is shifting. The user experience has become more frictionless. Up until now, it’s been only a few companies that have succeeded. On the niche business-to-business side, that’s clearly a place where subscriptions have been solid and growing. Businessweek would fall into that business category, particularly when professionals can put it on their corporate card..." Separately, WSJ offers more on Bloomberg Media taking on CNN with its new Twitter-based news service, Tic Toc. 

HuffPost Exec Editor Jim Rich Exits To Launch Nonprofit News Outlet
MediaPost: "HuffPost executive editor Jim Rich is leaving to launch a nonprofit, New York-focused news site. In a memo announcing his departure, Rich noted that the for-profit model of local journalism 'is dead, and it’s not coming back.' Rich said he witnessed this 'first hand' while EIC of the New York Daily News, where he worked for over a decade.'All the remaining revenue streams in the news business are flowing away from the not-always-sexy work of covering the corruption-prone institutions of our city and state,' Rich wrote.“Never has there been a more dire moment in the history of local journalism, and nowhere has this been felt more acutely than the media capital of the world, New York City,” he added.Though not mentioned by name, Rich is likely referring to the abrupt shuttering of DNAinfo and Gothamist, two sites dedicated to covering local New York news, in November... A few months earlier, the iconic alt-weekly paper Village Voice shut down production of its print edition to reallocate sources to its website. Rich said his upcoming news outlet will 'cover the city and state in the thorough, unflinching, yet fair and uncompromising manner the remaining publications either can’t or won’t.'In his memo, Rich noted he agrees with Talking Points Memo founder Josh Marshall that 'there are too many publications relative to advertising revenue.' But added he could "sit by no longer and hope that this problem will fix itself'"...


Retail News

Grocery Retailers Absorbing Rising Food Costs, Holding Line on Prices
WSJ: "Food costs are ticking up after a multiyear glut of many staples. But consumers aren’t paying much more yet because grocers, discounters and online retailers are all holding down prices to win business. Higher prices for vegetables, beef and eggs helped push the food portion of the producer-price index up 3.5% annually in November, according to the Labor Department. Meanwhile consumers paid just 0.6% more for groceries that month than a year earlier, the department said on Wednesday. The spread between producer and retail prices is the widest in more than three years, according to Barclays. That gap is putting grocers under increasing pressure as they try to manage shrinking margins without losing customers. Some executives say they are looking for new ways to cut costs, fearing they can’t afford to raise prices at a time when deals are getting easier to find online..."
Wall St. Journal (paid sub req.)

Meijer to Add Wahlburgers Restaurants, Food Trucks
SN: "Supercenter operator Meijer has agreed to add Wahlburgers restaurant locations at an unspecified number of new and existing store locations, the retailer said.The agreement follows another partnership that the celebrity-owned restaurant chain--widely known through an A&E channel reality TV series of the same name--formed with West Des Moines, Iowa-based supermarket operator Hy-Vee earlier this year.In the partnership with Meijer, Wahlburgers will add its casual-dining restaurants on the supercenter operator’s lots, beginning with locations in Michigan and Ohio. It was not immediately clear if Meijer would become a franchisee of the concept or if Wahlburgers or other franchisees would operate the restaurants... Meijer said the partnership would also include the deployment of Wahlburgers’ new food trucks to select Meijer stores. The trucks will feature a limited selection from the chain’s menu of burgers, sandwiches, salads and other fare.Meijer also said it will roll out to all of its stores the Performance Inspired line of nutrition and lifestyle products cofounded by actor Mark Wahlberg, whose family is behind the Wahlburgers restaurant chain..."

MyWebGrocer Lays Off 18
PG: "Supermarket ecommerce company MyWebGrocer (MWG) has eliminated 18 positions at its Winooski, Vt., headquarters as part of what it calls a 'restructuring,' according to published reports. 'This action aligns the expertise of MyWebGrocer’s workforce with its operational needs, and positions the company to reinvest and expand in support of its existing customer goals and strategic growth objectives,” the company noted in a statement provided to the Burlington Free Press, in Vermont. MWG attributed the move to 'the rapid changes in the digital grocery market,' which led it to '[restructure] some teams and personnel to better meet the needs of its customers'"...

Analyst: Costco's E-Commerce Poised to Take Off
CNBC: "BMO Capital Markets raised its rating for Costco shares to outperform from market perform, citing the company's surging online sales growth. 'We believe an acceleration in Costco's online business is in early stages and could continue to support a strong comp outlook and higher valuation as the company widens its competitive moat,' analyst Kelly Bania wrote in a note to clients Monday. The retailer reported better-than-expected fiscal Q1 earnings results Thursday. Costco's online comp sales rose more than 40% in the November quarter versus the 21% growth in the previous quarter. Bania increased her price target for the stock to $215 from $160, representing a 12% upside from Friday's close. The analyst said Costco's strong online sales results will likely continue now that the retailer just launched two online grocery delivery offerings in October. She noted that Costco's membership renewal rate stayed at a solid 90% in the U.S. and Canada during the fiscal Q1. 'We believe that Costco now has more valuation support given its potential to gain a greater share of total wallet from  its loyal membership base," she wrote..."

Unilever, Tyson Leaving GMA
MNB cites a Politico report that two more big CPG makers, Tyson and Unilever, are ending their membership in the Grocery Manufacturers Association (GMA). "They join Campbell Soup, Nestlé, Dean Foods and Mars, all of which also recently opted out of GMA. In a statement to Politico, Unilever said, 'We review and assess our trade association memberships each year and decided not to renew our membership in 2018 as we increase our focus on advocacy aligned with delivering our Unilever Sustainable Living Plan.' Tyson said: 'Tyson Foods is not renewing our membership with the Grocery Manufacturers Association at this time. While we respect the work of the organization, our company is moving toward a more global discussion about the future of food.' Politico writes, 'At least six major food companies have now broken with the association as it struggles to navigate deep disagreements within the industry over how to respond to rapidly changing consumer tastes.' Roger Lowe, GMA’s EVP of strategic communication, tells Politico that 'GMA and its board is continuing our work to build the new GMA for the future to meet the needs of long-time and new member companies and of consumers. The food industry is facing significant disruption and is evolving--and so is GMA. We all will continue to evolve and change at an even faster pace. We are always sorry when a member company decides to leave, and hope to work with them on issues of mutual interest in the future.'"

Retailers File Amicus Brief in Amex Anti-Steering Rules Case
PG: "Retail trade associations have filed a joint amicus brief in a case now before the U.S. Supreme Court on the legality of American Express (Amex) rules that bar retailers from offering benefits such as discounts to consumers for using cards with lower fees, or even educating consumers about those fees.The brief, in Ohio, et al. v. American Express, was filed on behalf of the Retail Litigation Center (RLC), National Retail Federation (NRF), National Association of Convenience Stores (NACS), Food Marketing Institute (FMI), National Grocers Association (NGA), National Association of Shell Marketers, Inc. (NASM), and the Retail Industry Leaders Association (RILA). Previously Amex, Visa and MasterCard all had rules prohibiting merchants from encouraging customers to use lower-fee credit cards. Visa and MasterCard dropped their restrictions as a result of a 2010 settlement with the Justice Department. Amex declined to do so, and was sued by DOJ, as well as 11 states..."

Why Amazon Must Get Into the Pharmacy Business
Businessweek: "For months now, pharmacy and health benefits companies have fretted that they’re the next targets of Jeff Bezos’s disruption steamroller. In September Inc. acquired Whole Foods Market, a grocery chain that could theoretically add drug counters to stores; a month later came word that the e-commerce giant had secured pharmacy licenses in more than a dozen states. Analysts issued dire warnings; shares see-sawed. The industry’s paranoia is justified given Amazon’s propensity to disrupt one sector after another. But it’s worth remembering Bezos has been thinking about the corner drugstore for almost 20 years. No clear strategy has emerged, according to three people familiar with the company’s plans, because Amazon hasn’t yet figured out how to shake up a notoriously complex business. So for the time being Amazon is focused on the $200B market for medical supplies..."


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