Time Magazine Group still flexing muscle; Entertainment Weekly, other projects get green light under merger

Folio: The Magazine for Magazine Management, Sept, 1989 by Abbe Wichman

Time Magazine Group still flexing muscle

New York City--Despite the recent Time/Warner megamerger, a new entrepreneurial mind set is behind the February 1990 launch of Entertainment Weekly, the first maganzine to make its debut under the Time Warner Inc. banner.

The seed was planted three years ago, when the "bureaucratic" Magazine Development Group was dismantled by Reginal Brack Jr., chief executive officer of the Magazine Group.

Under the new system, no one came between Brack and the inventors of the Entertainment Weekly concept--Jeff Jarvis, who headed People's "Picks and Pans" section, and Michael J. Klingensmith, who was chief financial officer of the Magazine Group. Klingensmith will become publisher, and Jarvis, managing editor of the title that will report on and review books, records, films and television.

"This treamlining cuts in half the amount of time it takes to do a launch and it also cuts the dollars spent," Brack says. Unlike the previous expensive newsstand prototype of Picture Week, which never got off the ground, Entertainment Weekly was tested by more traditional direct mail. Initial circulation will be 500,000; subscriptions will be priced at $1 per issue, and single copies will sell for $1.95.

The launch of Entertainment Weekly is the first since the costly failure of TV-Cable Week in 1983. With a sigh, Brack says, "Eveybody is looking for a connection between this launch and that one--it's irrelevant and I'm tired of it."

While some industry analysts expressed surprise that the launch was announced in the heat of the Time/Warner/Paramount battle, Brack says the merger really doesn't affect the group's launches and acquisitions. "We've always been very selective in what we do," says Brack, "but since we continue to believe in the growth of the magazine business, that calls for reinvestment from time to time."

Brack says, however, that the size of the $14 billion acquisition does focus increased attention on capital spending. "But we're aiming for there to be no negative effect on our earnings as result of this merger," he adds.

Besides the EW launch, the Magazine Group is also faced with options to buy the remaining shares of such joint ventures as Parenting and Hippocrates later this year and early next. "The merger won't impact if we go ahead and exercise these options," Brack says. "The banks are well awre of what our commitments are."

Several of Time Warner's publishing partners are getting the clear signal that "a good idea will still get money," as Eric Schrier, founder of Hippocrates, puts it. A trade spin-off of the magazine, directed to physicians, was recently given the green light by the Magazine Group and is slated for an early 1990 launch.

Don Logan, chief executive officer of Southern Progress, notes, "It's business as usual, and we have received no signals to the contrary." Southern Progress is proceeding with the editorial refocusing of Southpoint (formerly Southern), the two-year old Cooking Light and Travel South.

According to Brack, it has been the search for "absolutely the right partners, not financial constraints" that have kept Time from other magazine partnerships. "It seems as if the world thought the magazine division was under siege or that we were going to hunker down and not do anything," Brack says. "Entertainment Weekly is the first magazine borne out of our new system for investing in new magazines. We've been working on it for a while--we just didn't announce the idea to the world."