TIME INC.'S TRIALS BIG PUBLISHER PLEDGES NEW PROJECTS DESPITE A SERIES OF SETBACKS AD PAGES IN LIFE, TIME DROP THOUGH CIRCULATION RISES; A VENTURE WITH GE LAGS NEW MAGAZINE IN FIVE YEARS?

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP88-01314R000300180058-1
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 2
• Document Creation Date: December 16, 2016
• Document Release Date: October 7, 2004
• Sequence Number: 58
• Publication Date: April 15, 1969
• Content Type: NSPR

WALL STREET JOURNR-Ir b u I I A
5 APR 1962
. ,
Approved For Release 2004/10/2 . CIA-RDP88-01314R000, 058-el
Time Inc.'s Trials
C)i Big Publisher Pledges
New Projects Despite
A Series of Setbacks
If beginning a magazine was risky 15 years
ago, it is more so today. Television 'is taking
more and more of advertising budgets. The
biggest victims of the trend have been the gon-
eral-interest magazines like Life and the late
Saturday Evening Post. Special-interest maga-
zines like Fortune have suffered the least.
Though all four Time Inc. magazines have
added readers at a rapid rate in recent years,
ti being held out to space salesmen. Life re-
cently appointed new directors of advertising
sales and promotion.
Life leapfrogged past Look in circulation
last year (it now has 8.6 million circulation,
compared with Look's 7.8 million) by taking
subscribers cast off by the moribund Saturday
Evening Post. But Life then boosted its adver-
tising rate for a four-color, page to $64,200 from
$58,375, while Look remained at $55,500. "The
rate increase has cost us some business," Mr.
Hardy concedes.
Life has been undergoing editorial changes,
Ad Pages in Life, Time Drop
Though Circulation Rises ;
A Venture With GE Lags
New Magazine in Five Years?
By A. KENT MACDourALL
StQ,.ff Repoi'te, of 7TH WALL STREET JOURNAL
NEW YORK - Hard times have come to
Time Inc.
The publishing empire built on the enor-
mous success of Time, Life and Fortune maga-
zines will report that It just about broke even
at the annual meeting Thursday on first-quar-'
too. Stories now are lodger and often reflect
personal opinion, usually liberal and occasion-
ally anti-Establishment. Muckraking stories,
such as those dealing with the Mafia, are more
common, as are pieces dealing with dangers to
? wildlife. "We're a crusading magazine," says'
George Hunt, managing editor.
At the same time, book, motion picture and
theater reviews are giving Life a more sophis-
ticated and literary tone. Indeed, Mr. Hunt
says Life isn't a magazine for the masses any
more: "The mass media today is TV; Life is a
select magazine."
But it often appears that Life's promotion
people are operating on a contrary premise. I
,One ad boasts, "Now one out of every four-
Americans reads Life," and goes on to say that
, LGL u1)eL aLlu11 ,. ? "ci, " ? -.- ?? ~- --~ -"w "'N " ~ ? --~~~LL~~u, the 48 million adults and children who see Life
Such a disappointing result wouldn't neces- aaul I.read `Time 'and `Life., That way we get each week are "16 million more people than Ii
sadly portend disaster-the first quarter tradi-, the over-all picture." ever watched any single regularly scheduled
tionally is a slender one for advertising reve-.
Drawing by Weber: ?1964 TV "
The New Yorker Magazine Inc. Progam.
continue substantially profitable. But Time Inc. the gain is considered a mixed blessing. Adver-
manifestly has troubles: tising rates have gone up, too, pricing the Time
-Time magazine continues to lose ground Inc. periodicals out of the reach of many small
----- .,,,--
lation is rising steadily, for Time magazine reached-ICS peak in 1951, for
-Life, down in advertising pages for nine of Life in 1956, Fortune in 1960 and Sports Illus-
the last 12 years, is down again in 1969, trated in 1966.
although its circulation also is rising. The biggest worry in the Time Inc. empire
-Several nonpublishing ventures have, is Life. In 1956, the picture weekly carried an
turned sour at least temporarily. General average of 91 pages of ads per issue. Last
,Learning Corp., a joint effort with General year's' average was 54, and first-quarter ad
Electric Co., has lost $5 million in its first three, pages this year were off to 40 from the yea.r-
A-....... - ....~__.d: I earlier 44.
..
0_11
ears
g
ary selling computerized statistics on move-
ment of goods from warehouses to supermar.
kets, has lost an estimated $6 million. A televi-
sion investment in Venezuela has lost almost $3
million. And a $17.7 million investment in'the
stock of Metro-Goldwyn-Mayer Inc. has, a cur-
rent market value of only $12 million.
Undaunted
The reverses don't seem to dismay the men
who have been running Time Inc. Since the
Just as Life is jousting with Look, and TV,
Time magazine is tilting with Newsweek, and
increasingly with TV. For the first time since
1959, Newsweek pulled ahead of Time's domes-
tic edition in ad pages last year, and In this
year's first quarter Newsweek's ad pages rose
by 171-/o while Time's were off 4%. However, ad
pages in Time's international editions climbed'
10% in the first quarter. Time remains the l
company's most profitable magazine by far.
Time still leads by comfortable margins in
total advertising revenue and circulation (5.2
million world-wide to Newsweek's 2.7 million)..
But as Time's circulation has grown, so has its.
in package goods," says Jerome S. Hardy, a' today is Life, Look and TV, not Newsweek,"
vice president and publisher of Life. Some of says James R. Shepley, a vice president and'
the package goods makers hardly bother with Time publisher.
magazines these days. Procter & Gamble Co., Even so, ad men tend to compare Time to
the nation's largest advertiser, spent $13 on TV Newsweek, not always favorably. "It's a qucs-
last year for each $1 on magazines, according;tion of editorial vitality," says Robert Engelke,
to advertising industry statistics. For General media director of Wells, Rich, Greene Inc.
Foods Corp., the ratio was $20 to $1. ."Newsweek has a fresher feel to it; Time
"Not only does Life charge $20,000 more for seems rather tired."
a one-page color ad than network TV does for New Timestyle
death of co-founder Henry R. Luce two years
ago. "We're a company of optimists," says! an average- night-time one-minute commer- Henry Anatole Grunwald, Time's managing
Edgar R. Baker, vice president and director of", cial," says the media director of one large ad editor, is trying to reform what has come to be
corporate development. Citing as an examplei agency, "but with sight, sound and motion, the known ak Timestyle. He and his editors are rid-
Sports Illustrated magazine, which lost an esti.' commercial can usually do a better job of dem- ding the magazine of bizarrely constructed sen-
mated $28 million before it became profitable onstrating the product." tences and penciling out many puns, obscure
several years ago, Mr. Baker says; "If we had Getting More Competitive words and foreign phrases. "We still try very
I perfect foresight and knew all the problems, Life also is losing ground to Look magazine. hard to be clever, but we. try very hard not to
down the road, we wouldn't start anything." For instance, both magazines carried ads last be cute," Mr. Grunwald says:
There is no talk of retrenchent. Time Inc.`year for Clairol hair coloring and Bulova The magazine continues to rely chiefly on
has just set up a group for new magazine de watches. This year only Look has these two ad- anonymous group journalism, but it now occa-
velopment, with Richard M. Clur.man, a vice vertisers. sionally allows correspondents and writers to
president and former chief of correspondents' "We have to get a hell of a lot more compet? personalize their accounts. A few stories now
0 in the Time-Life News Service, in charge, "I've itive without getting dishonest," says publisher give credit to the author, and Mr. Grunwald is
already gotten a hundred. suggestions from in- lHardly. Life traditionally has ignored the eom- considering the use of signed essays and book,
side and outside the company," he says. petition In Its ads aimed al. Madison Avenue, theater and movie reviews.
1 "We're not going to stand still in this area. A but it recent one mentioned Look (unfavora- Since changing managing editors last year,
major new magazine within five years is a dis?. b)y). New discounts are being offered to some Time's stance toward major Issues has become
tinct possibility." Time Inc.'s last new maga- advertisers, and the reward of bigger bonuses less cocksure and conservative. "'We used to i
I zinea, was. Snorts Illust ted launched ing95~ q r Into vlllians and heroes,"
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says Mr. Grunwald. "We've. learned things the Time-Life Broadcast division.
aren't that simple." The magazine has "Tenants won't open the door to salesmen,"
changed its position on the Vietnam war, which Mr. Pullen explains. Landlords have demanded
cynical outsiders used to call "Time's house ~ payments, and theater owners are pressing for
0 war." restrictive legislation on CATV. "We've taken
"We've got to get out of it," Mr. Grunwald our knocks here," Mr. Pullen says ruefully. A
asserts. "We must keep up a military pres- small investment in a pay-television experi.
ence, largely of a defensive nature until we nment in London has been written off; it encoun-
tered hostility from cinema Interests and only
reach a reasonable settlement in Paris." Time
now hopes for "substantial troop withdrawals a lukewarm reception from viewers.
very soon," he says. Pulp and Paper
The editorial ferment at Time has no coun- Time Inc. has taken lumps in St. Francis-
terpart at-Fort e. Fortune seems to have no ville, La., where it owns 50%n of two big ma-
need to changerhe business monthly has had chines producing magazine paper. The newest
a rise in ad revenues for. the last nine years. machine, incorporating new technology, has
Sports Illustrated, healthy since moving into turned out paper at a higher cost than Time
the black in 1963, is ahead of last year in ad pays elsewhere. "It's 1968 performance was
pages despite three rate increases in 12; quite disappointing," says David M. Brum-
months. The Time-Life Books division was an baugh, exective vice president. But now the
instant success when launched in 1961, and: machine has been modified, and "it's doing
book sales th`iis year are expected to approach much better," says Mr. Brumbaugh.
$100 million. A wholly owned pulp and paperboard mill in
Time acquired Little, Brown & Co., a presti Eva1ale, Texas, underwent a $43 million ex-
gious Boston book publisher, last year. This pansion in 1967, only to encounter an Industry-.
year it expects to buy minority interests in wide slump in paperboard prices and a, drop in
$ritish and Spanish book publishers, to add to profits. R. M. Buckley, a vice president, de-
existing minority interests in German, French fends this venture. "This business can be good
and Mexican publishing houses. when the publishing business is bad," he says.:
Moving Too Fast "Time could have done better by investing in.
Time Inc. executives acknowledge their set- Xerox, but that's hindsight."
backs in various nonpublishing ventures, but Time didn't do well in its $17.7 million pun
remain hopeful for the future. James A. I.,inen, chase of MGM stock, at $59 a share. The big
Time president, who conceived the idea for movie-maker has suffered box-office disap-
General Learning's plunge Into computerized pointments that dragged it Into the red. The
education during a ,round of golf with Fred J. stock closed yesterday at $38.25. However, Mr.
Borch, General El&'ctt o president, says: "The Baker, the corporate development chief, says
theory was that the future of education is a the 5.5%n interest has given Time "a front-row
marriage of software and hardware. The observation post" in Hollywood and has pro-
theory is still right, in my estimation, but it's vided "substantial stimulus" to Time's own
going to be a long time coming." The consen- film-making activities,
ri sus is that GE and Time overestimated Ameri- Time Inc. Is buying into the newspaper busi-
can education's readiness to substitute comput- ness. It has agreed to purchase a company that
ers for teachers. operates a profitable chain of 22 Chicago sub-
Mr. Linen won't predict when General urban weeklies and an unprofitable commer-
Learning might become profitable, except to cial printing plant. The plant will be kept busy
jsay that, it won't be in 1969. But he thinks that putting out Time's direct-mail promotional
Selling Areas-Marketing' Inc., the venture for pieces presently farmed out to other job shops.
supplying computerized data on the movement Otto Fuerbringer, a. vice president, has been
of goods, may move into the black next year. looking for metropolitan and suburban daily
Grocery chains originally supplied SAMI with newspapers since leaving the Time managing
Inaccurate and uncoded data, and .it took a; editorship last May. Most available papers are
year and a half to work out usable statistics overpriced, he says, and the search is "going
salable to food manufacturers. very slowly." Mr. Fuerbringer points out that
SAMI, say Time executives, may branch, newspapers are "making a comeback in circu-
out next year into selling data on movement of ! lation, advertising and profitability," at a time
products to drug stores and later to variety when consumer magazine advertising seems to,
stores. "The future looks damn good," says J. have reached a plateau.
Clarke Mattimore, SAMI president. "This is Mr. Linen declines to forecast 1969 financial
potentially a big profit center." results. Last year's operating net Income of.
Other turnarounds also are at hand, com- $27.1 million, or $3.76 a share, was down from
pany officials aver. The Venezuelan TV ven- the 1967 net of $31.2 million, or $4.36 a share,
ture suffered from competitive rate-cutting and and 1966 earnings of $37.3. million, or $5.40 a
from -putting a signal tower on too low a -hill. share. Its profit margin shriveled last year, too
The tower has been relocated on a 'mountain, -dropping to about 4.8%n from 6% in 1967.
the competitive position has improved and the Time's stock, which reached a high of $115 in
venture is expected to go into the black this 1 1967, ended 1968 at $99.50 and closed on the
year. Other minority interests in TV, in Brazil, New York Stock Exchange yesterday at $81.50.
Argentina, Germany and Australia, are profit- Though Time has grown to a big corporation
able now, and Hong Kong's first TV station-- with 10,200 employes (revenues in 1968 were
another minority holding-is expected to be- $567.8 million, up from $519.6 million In 1967), it
come profitable soon. retains some of the paternalism of its early
On the home front, Time's five TV stations' days under Henry Luce's personal manage-
and four AM radio stations are profitable, and' ment. High salaries, liberal fringe benefits and
its four FM radio stations break even. But only a certain clubby esprit de, corps keep employes
four of 14 community antenna TV systems in( loyal. The company makes a, practice of find-
0
which Time holds an Interest made money last ing spots for burned-out old-timers. "One of,
year. A $2.8 million Investment In A. Manhattan 1 our problems," Mr. Linen 6cknowledges,. "is'
' CATV venture has rim Into "horrendous prob- 11 holding on to people too long."
lems," says Weston C. Pullen 'Jr., president, of.
Approved For Releae 2004/10/28 : CIA-RDP88-01314R000300180058-1