IAC Sees Magazines As “Luxury Good” Amid Publication Restructuring
IAC executives gave more color on how they view the print magazine business Wednesday, following the company’s decision to end several print issues in its portfolio, including Entertainment Weekly, InStyle, Health, EatingWell and Parents.
The company, which acquired these titles through its acquisition of Meredith Corp. in 2021, cut the print editions of these publications in February 2022, while maintaining print editions of titles such as Food & Wine and Better Homes & Gardens. Remaining print editions have seen upgrades to their products, including the paper quality, and are now viewed as “a little bit more of a luxury good,” intended to help with branding, according to DotDash Meredith CEO Neil Vogel, who runs this segment.
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“We said when we bought this thing, that we were going to approach print differently,” Vogel said on the investor call Wednesday. “And I think what print can be for us, it is not going to be an economic driver of the business, but it is a very important brand driver for everything we’re doing.”
Vogel referenced the Harry Styles June cover of Better Homes & Gardens, in particular, as one of those recent brand drivers. He added that the moves, which have included cutting six print magazines, have led to the publication retaining an “all-star team” of people and upgrading the remaining magazines have been “a really positive morale thing for our company” (even as the shuttering of the magazines led to the elimination of about 200 jobs).
Even without that financial goal, in the second-quarter, DotDash Meredith saw its print advertising business up 3 percent year-over-year, a particularly welcome sight as the overall segment saw a “rapid pullback” in advertising spend starting in June.
“With respect to print, we have always positioned it as we’d like the adjusted EBITDA from print to cover our corporate expense, give or take in any quarter and year,” said Christopher Halpin, IAC’s chief financial officer.
While acknowledging that the path forward will likely be bumpy, executives say they are still planning for monthly improvement through the rest of the year and continued plans for the segment’s digital revenue to reach 15 percent to 20 percent year-over-year growth by the end of the year.
“The key there is, as Neil said previously, is to drive the consumption, the engagement and the premium sales. So that is the business plan: keep bringing digital revenue in, maintain that incremental profitability on $1 of digital revenue and have a drop to the bottom line, and we are very much in that path,” Halpin said.
