Sucking up to celebs builds mag as TW money machine

If the neighborhood newsstand is a war zone, People magazine has been braving some heavy artillery fire.

As an army of aggressive, celebrity-obsessed rivals including Us Weekly, Star and In Touch moved into its terrain, People has staunchly beaten back its challengers: The weekly mag remains a key profit center of the troubled Time Warner empire.

People has a circulation of 3.73 million and its revenue is expected to top $1.5 billion this year. Its toppers exercise a growing influence throughout the media conglom, as titles like Time and Fortune struggle to retain ads and circulation.

But to keep its perch, People has turned to the entertainment industry as never before, having pumped up its celebrity coverage and shelling out staggering sums for celebrity photos (the most notorious being the reported $4.1 million for the Brangelina baby photos) and even staking out homes of the rich and famous. A People reporter was recently arrested for trespassing in Brad Pitt’s backyard.

Like the boob jobs ever more prominent in its pages, People has perked up.

The process has annoyed some of its readers and reporters, as well as sister publications and rivals, who go bonkers at what they call People’s holier than-thou-attitude even as it goes downmarket in the pursuit of the latest celeb wedding. A reporter at another Time Inc. publication grumbles about People’s supersized presence, “It’s like a turkey leg on a Cornish hen.”

Us Weekly editor-in-chief Janice Min states, “They are among the biggest spenders of celebrity photos in the industry. They pay staggering amounts for the most nominal things to the huge things. One of the first things they ever did, that led to the jacking up of photo prices, was to pay $75,000 to buy pictures of Jennifer Lopez reading Us magazine, so Us weekly couldn’t buy them.

“That was the watershed moment that kicked off high photo prices in my mind,” Min added. “I had never seen anything like it. But they saw a competitor come along, and responded. It was a business move, and probably a smart one.”

If People’s tactics have raised eyebrows, that doesn’t seem to have hurt its status. People won the top spot on Adweek’s latest “Hot List of Top 10 Magazines.” Adweek also named Martha Nelson, a rising star of Time Warner and editor of the People Group, as editor of the year. Ann Moore, former publisher and president of People, has risen to the top of the publishing food chain. She was named chairman-CEO of Time Inc. in 2002.

What’s more, they have extended the brand well beyond the print version of the magazine.

  • People Group creates specials on celebrity babies and weight loss; its Stylewatch issue will come out five times this year; it publishes books on disaster survivors and true crime.

  • It prints glossy dailies for a week leading up to the Oscars, Emmys and Grammys. Publisher Paul Caine says People recently used these Hollywood Dailies to launch a mag upfront, offering advertisers category exclusives for the coming year.

  • People offers readers celeb updates on cell phones. It hosts lavish events at Wal-Mart supercenters. It’s partnered with CBS’s “The Early Show” for feature segments on heroes, and with Court TV on a true-crime special.

  • An aggressive publicity machine peppers the nation with People reporters, from the smallest Midwest radio station to the network morning shows. Communications and media relations for People and Entertainment Weekly were recently folded together into a new Time Inc. entertainment group, under People’s Nancy Valentino.

  • It has made its web site a mini wire service of breaking news, with monthly page views up 392% to 225 million so far this year. Having snatched control over online ad sales from AOL, People.com’s sales team came together in the spring and expects to generate significant revenue.

The site set a new single-day traffic record of 26.5 million page views for the photos of Shiloh Nouvel Jolie-Pitt. It recently broke news about the theatrics on ABC’s “The View” with the coup, “Star Jones Tells People I was Fired.”

“We’re responding with much more speed than we once did, using the people reporting machine to break news online, to become a faster, sharper news organization,” Nelson says.

Nevertheless, People’s editors insist that while the stories are shorter and snappier, the mix of celebrity and human interest stories has remained steady at about 53% to 47%, respectively, over the past five years. They say that they stand out from the pack because they refrain from printing pure gossip, enough to keep it in high regard with readers and even the celebs it covers. The latter even come to the magazine with exclusives. One staffer calls it a “publicist-friendly strategy.”

“We have a strong group of reporters and editors and we are a reputable place. There’s no better place to tell your story,” says Nelson, known as a demanding boss. “We don’t print rumors. Of course it’s hard. But we don’t have to go back” and retract them.

Like other Time Inc. publications, People has an army of fact checkers. (Kurt Anderson wondered recently in a New York magazine column whether a Time Inc. fact-checker really confirmed that Demi Moore wears a blue La Mystere embroidered-Swiss-tulle-lace bra.)

“You can speculate forever about the sex of someone’s baby,” Nelson says. “But in the end it’s a fact. And someone’s pregnant or they’re not. Every day there’s a rumor. Only the two, or three, people involved know the truth.”

While the tabs went mad, People didn’t write a word about Jen and Brad (or Angelina) until the couple confirmed they were splitting. Even then it waited on Angelina. “We couldn’t pin it down,” says managing editor Larry Hackett.

“Do I start twitching when I see that? Sure,” he adds. “But I say ‘keep your eye on the distant shore.’ “

People doesn’t ask photographers to stake out celebs, and won’t use a photo that looks “intrusive or looks like it was taken with a long lens,” Hackett says. “I’m certain our bar is much higher.”

There’s no doubt, though, that People is a different magazine than when it debuted in 1974, as a spinoff of Time’s People section. With Mia Farrow on the cover, the first issue featured stories on Gloria Vanderbilt, Vietnam MIA veterans’ wives and Alexander Solzhenitsyn.

People quickly made a specialty of human interest features, particularly ones on ordinary people doing extraordinary things. Recent examples include a couple in New Hampshire who adopted 18 kids with Down’s Syndrome; and a 17-year-old boy in Philadelphia raising his 2-year-old daughter.

It still runs movie and music reviews, book excerpts, and stories on everything from the Pope to Hurricane Katrina, even a Q&A with President Bush on turning 60. Unlike its rivals, such stories set it apart. “People does not have to rely on Paris Hilton for its cover every week,” says Richard Stolley, the magazine’s founder.

Yet through its history, some of People’s signatures have been such celeb heavy special issues as “Sexiest Man Alive.” And with the added competition of Us and others in the past five years, it’s no secret that celeb covers and celeb news greases the wheels.

“If you have a story about Jennifer Aniston or Jessica Simpson, or someone’s break up, or a wedding, there’s a high likelihood most readers will dive into that,” Nelson says. “When you’re looking at a story about a local hero, or a woman who has been dealing with a dying child, or helping to save her community, you have to work harder editorially to take the reader in.”

A Time Inc. veteran who also served as founding managing editor of sister pub In Style, Nelson is known as master marketer and savvy strategist. She polls senior staffers on major decisions, such as cover stories, but doesn’t waster her time with people she doesn’t trust or doesn’t perceive as being smart.

“I don’t think she led the (celebrity push), we were forced by our competition, but she saw the writing on the wall and didn’t hesitate to push to the future,” says one mag staffer. “Time Inc. is a big old fat company and she is one of the people who have led it to change. She invented InStyle and she sharpened People up.”

Others at the mag are quick to defend their push toward celebrity, given that many other publications have done the same.

“I don’t know why a certain level of reporting is accepted in the coverage of celebrities that wouldn’t be with politics or government or sports,” says Hackett, who worked for eight years as a reporter and editor at the New York Daily News before joining People in 1998.

“There’s an aversion in the mainstream media to covering celebrity,” he adds. “Big newspapers write it like, ‘Why are we so fascinated with Brad and Angelina’ and make it a media story.”

People has said that the $4.1 million pricetag for the baby Shiloh pics is incorrect, but won’t say by how much. Rivals pin the blame on the magazine for driving up prices.

Min slams People for “paying $300,000 for the first pictures of Gwyneth Paltrow’s second baby, or hundreds of thousands for Marcia Cross’s wedding.”

Nelson admits that the escalating photo prices are “crazy,” but the mag, she says, has to be competitive.

“I would never have predicted this,” she says. “I don’t think it’s a good thing. It isn’t something we created or initiated. But if this is the situation the competition creates we are not going to be beaten for the photos that we really, really want. A lot of this is being driven by the new entries, particularly the Europeans who have a tradition of this.”

“We buy photos from the agencies,” she says. “We probably have more people deployed on the stories than ever before. Are we more aggressive? We probably are.”

The friskier People posted ad revenue of $354 million in January through May of this year, up 1.3% from the same period a year earlier, according to the Publishers Information Bureau.

The average age of a People reader is 40, about 10 years older than that of Us, but it is debateable how much it matters. Mag vets say that, amazing as it sounds, the market for celeb coverage was underserved.

“I can’t believe that anyone who was in magazines was not surprised by the new celebrity magazines coming in, and not damaging exisiting magazines but opening up the universe,” Stolley says. He credits Nelson with responding to the competition “brilliantly, without damaging the core concept of People, which was that we covered celebrities in the broadest sense of the word.”

While People once struggled for respect, including from within Time Inc., in its field it is now considered a publication with gravitas. People maintains bureaus in Los Angeles, New York, D.C., Chicago, Miami, Austin and London. Time Inc. laid off 105 staffers late last year and another 100 so far this year at several publications including Time, but People remained relatively untouched.

“For years during (Time Inc.’s) history, one magazine has been dominant. Time was that magazine until World War II, when Life exploded,” says Stolley. Then it was the People era. “It’s built into the history of the company.”

Some of the rank-and-file at other Time Inc. publications still sniff about People’s editorial choices — Entertainment Weekly staffers mocked People’s cover with “American Idol” winner Taylor Hicks –but even that is changing.

Says one former People reporter: “At Time Inc. and People, I did sense that most of the decisions that were being made were from the vantage point of ‘We’re No. 1.’ I’d see people in the Time Inc. building and say I work for People and they’d say ‘cool.’ It was the coolest place to be working.”

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