Aging publication grows to full size magazine

NEW YORK — In a bid to save its ailing title, Gemstar-TV Guide Intl. will spend $110 million to convert the digest-sized TV Guide into a full-sized glossy to take on the likes of Entertainment Weekly, People and Us Weekly.

Magazine has been losing tens of millions of dollars each year for parent company Gemstar-TV Guide as it fought to maintain a 9 million circulation with steep discounting and sponsored sales to hotels and doctors’ offices.

New mag, which debuts Oct. 17, will have a circulation of 4.5 million, but advertisers will be asked to pay for only 3.2 million — the circulation level Gemstar execs believe is sustainable.

To cut costs, the magazine is ending its tradition of printing local editions with TV listings for 140 different markets, which required a huge infrastructure plus printing and postage costs. New version will have one national edition, with an Eastern or Pacific time zone designation.

Content change

The content mix will also change. New version will be 75% editorial — a mix of stories and reviews — and 25% listings; current mix is 25% editorial and 75% listings.

Revamp is the latest measure to bring the 50-year-old title out of intensive care. Title loses millions every year as consumers increasingly obtain their listings information from onscreen guides and the Internet, but the magazine remains Gemstar-TV Guide’s biggest consumer product and a critical calling card for the brand.

“It’s a fundamental product change and fundamental model change,” Gemstar TV Guide publishing group prexy John Loughlin said. “TV Guide is one of the significant drivers for the brand, and this revitalization not only helps the magazine but a lot of our other businesses.”

Layoffs loom

Revamp will bring some pain as the company lays off an undisclosed number of employees over the course of the next year to bring the magazine’s cost structure in line with those of other newsstand glossies.

The magazine has a reputation of paying healthy salaries and some of the highest freelance fees in the business.

In 2003, the company spent $20 million on market surveys and a redesign, changes Loughlin now calls “tweaking around the edges of the digest product.” Some analysts criticized the company for not making wholesale change back then.

Latest revamp scraps the business model of the old magazine entirely while transplanting some of the TV Guide DNA into the new product.

Editorial will include reviews and deep TV coverage as well as an infusion of celebrity such as a regular feature that will take readers inside the home of a TV star.

TV Guide will join its startup sister magazine Inside TV on the newsstand, though initially Inside TV will have more display pockets (75,000) than TV Guide (70,000).

Sales of Inside TV have been disappointing, Loughlin said, in part due to the difficulty and expense of getting enough display pockets in a field crowded with glossy celebrity weeklies.

With its steady diet of Jessica Simpson covers, Inside TV is aping the formula of Us Weekly, In Touch and Star magazine. It’s targeted at women 18-34, while TV Guide will be target women 35-54 with a more family-friendly product.

Still a contender

Even with its diminished circulation, TV Guide will remain one of the nation’s biggest weekly magazines, competitive with Entertainment Weekly (1.8 million), People (3.6 million) and Us Weekly (1.3 million).

TV Guide will seek to become more competitive on the newsstand by dropping its cover price to $1.99 from $2.49.

The digest-sized TV Guide was known as distinctly advertiser-unfriendly in that it charged high rates for its 9 million circ but offered advertisers limited impact with its small pages. Advertisers also saw the pub as mostly a reference book rather than an in-depth product with devoted readers.

“The advertising suffered because of that and because of other competitive choices,” said Tyler Schaeffer, director of media brand planning at buying firm Foote Cone & Belding. “TV Guide was great for its times, but now times have changed and they have to.”

Also part of the restructuring, Gemstar-TV Guide will explore a sale of its profitable Skymall in-flight magazine unit.

Shares in Gemstar-TV Guide, which is 40% owned by Rupert Murdoch’s News Corp., closed down more than 10% to $3.16 Tuesday on the Nasdaq.

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