NEW YORK: The US magazine industry needs to transform its revenue model to survive the advertising downturn, Scott Crystal, chairman/ceo of TV Guide, told the DeSilva+Phillips Dealmakers Summit. By contrast, WPP Group's Sheila Spence said the holding company would be investing in further acquisitions to bolster its position.
According to Crystal, magazines' over-reliance on advertising rather than circulation revenues meant many titles faced tremendous uncertainty even though their readership may not be falling that steeply.
He said: "Media driven by consumer advertising have imploded … Whether you're running a business or looking for acquisitions, magazine publishers need to manage their costs more strategically.
"Linear thinking is hurting our industry. We have to take risks, blow up the model, and put it back together.”
Despite the gloom, Spence, WPP's svp corporate development, spoke of a memo she received that read simply: "Keep on acquiring."
As previously reported, WPP is aiming to move away from the traditional advertising model to insight provision, as demonstrated by its investment in US operator Omniture and the purchase of TNS, and is also focusing on Asia and other developing regions.
Spence said: "If you look at the deals we've done, they fall bull's eye into the company's strategic goals, including having one-third of our revenue from BRIC companies and building up our digital assets.
To view WARC Online's blog from the DeSilva+Phillips Dealmakers Summit by Geoffrey Precourt, click here.
Data sourced from WARC Online