The fate of the Orange County Register will likely begin to take shape early next year with the expected bankruptcy auction of Freedom Communications Inc., the daily newspaper’s Santa Ana-based parent.
It’s the latest step in the Register’s long and pockmarked road of recent years—Freedom emerged from a prior bankruptcy in 2010—that has dovetailed with a general decline in the fortunes of metropolitan dailies throughout the U.S.
There’s no doubt the Register still matters—it remains the single largest media outlet in OC, where television coverage is limited by the regional shadow cast by broadcasters in Los Angeles, and the digital scene is fractured among various competitors in numerous niches.
Indeed, print in general has plenty of life left, despite the naysayers who derisively call it the “dead-tree” sector of the media industry. That holds true here and nationally, but nothing can be taken for granted as the world continues to connect digitally.
Print publishers are trying any number of strategies to find a sweet spot where print can live on a combination of circulation revenue, print ads that fetch a premium price, and cheaper digital spots.
Most also have broadened the scope of their services to address media climate changes driven by growth in mobile and social media traffic by redefining themselves as more than just content generators and venturing into event production, media distribution and even ad agency work.
“Everyone is realizing that it’s not just the scale of distribution, or how many people you talk to—it’s who you talk to and how much influence you have in their lives,” said Paul Pfanner, founder of Pfanner Communications Inc., an Irvine-based ad agency that puts out several motorsports publications, including Racer and SportsCar Magazine.
The year-end is a good time to take this look at a number of publishers based in OC—we picked six, although there are many more mostly smaller companies that make up the print sector of the media here—and how they’re implementing different strategies to diversify their revenue streams and remain relevant by delivering desired audiences for advertisers.
It’s a varied group, from the company behind the Register to the publisher of Knives Illustrated. The six companies combine for tens of millions in circulation in daily, weekly, monthly and annual publications over the course of a year, not to mention hundreds of millions in revenue and thousands of employees.
TEN
Ten: The Enthusiast Network LLC, publisher of Motor Trend, Hot Rod, Surfer, Surfing and Transworld Skateboarding, among other magazine titles, has substantial operations in Santa Ana supported by 168 employees, and a group of 239 working from an office in the Los Angeles County city of El Segundo.
Print is still very important to Ten and gives it advantage over digital-only competitors, as “they only have one way to speak to consumers, and we have multiple ways to speak to them,” said Norb Garrett, executive vice president of TEN’s Sports and Entertainment Group.
Ten has taken other steps to diversify. Garrett’s group, a recent transplant to Carlsbad from San Clemente and is adding to its events portfolio—it launched a new stand-up paddle competition last month and acquired “Snowboard on the Block” this year.
The annual downtown Denver music, film and snowboarding festival gives “more firepower” to Ten’s winter sports publications, including Snowboarder and Powder magazines, according to Garrett.
“Typically, events that we’ve done in the past were—and many still are—free. We just want to get a lot of people involved. But when you put a big music name on the ticket, and you can bring people in for a daylong festival, you can charge [admission, and then] as a business I’m expanding our revenue capability and decreasing the dependency on sponsorship dollars.”
The event attracts hardcore lifestyle enthusiasts, as well as people who might attend just for the music or film aspects of the festival but end up stopping by sponsors’ booths to buy a discounted snowboard or a lift ticket.
“The event creates this environment that expands on the relationship that used to be, just 10 years ago, a magazine showing up in in someone’s mailbox,” he said. “Now the relationship is a lifestyle relationship, and we want to grow that, it’s central to our overall strategy.”
Ten also launched Pacific Paddle Games on Oct. 10 in Dana Point. Garrett “caught wind” that San Clemente-based Rainbow Sandals Inc. halted its support of the “Battle of the Paddle” this year, and he decided to fold Ten’s Camp SUP event into a bigger get-together for families and competitors. Florida-based apparel brand Salt Life signed on as the chief sponsor.
“We set up the largest prize purse (of U.S. SUP competitions) so that we could make a stake in the ground that this is a premier event,” he said, adding that the event “dovetails with our existing SUP awards” in San Clemente that features a roster of sponsors that includes GoPro Inc., Tommy Bahama, Glenfiddich Scotch and Martin Guitars.
Events represent about 10% of the Sports and Entertainment Group’s estimated $50 million annual revenue. Digital advertising is on track to account for 28%, up from 3% when he took over five years ago.
Ten, through its GrindTV.com, is also the official action-adventure sports content provider for Yahoo Sports and Conde Nast’s TheScene.com. It recently set up a video-on-demand service that enables viewers to rent or buy titles on its sites through Vimeo’s transactional video player. The revenue-sharing partnership gave Ten the role of content distributor of its own videos, plus those created by independent filmmakers or brands advertising in the space.
“We have an opportunity within this industry to be a premium creator and distributor of action-sports content worldwide—it’s a service we want to provide, and that’s the business we want to create,” Garrett said. “On a day-to-day basis, it’s not Volcom’s and Vans’ full-time responsibility to distribute this content—that’s what we worry about every single day. They have another job, which is to sell apparel.”
Bonnier
Bonnier Motorcycle Group’s 2013 acquisition of nine motorcycle magazines from Ten and shift of six TransWorld action-sports titles to TEN’s Sports and Entertainment Group has opened new revenue streams for the Irvine-based publisher. It rebranded itself as a platform-agnostic media company with access to 8.3 million enthusiasts who seek it out as a reliable source on everything related to power sports.
“It’s a shift in strategy,” said Vice President and Group Publisher Andrew Leisner. “We are always looking for different ways to deliver our content and for new and unique opportunities to deliver our audiences to the motorcycle industry. We know that we cannot rely on traditional print and digital banner advertising. We have to be always looking at what’s next—print (ad revenue) is down 16% over last year, and online is up 34%.
The group, aside from publishing Cycle World, Dirt Rider, Hot Bike, Motorcycle Cruiser, Motorcyclist, Sport Rider and other print magazines, puts on several Bonnier-branded and client-owned “customer engagement opportunities.”
They include the Geico Motorcycle Hot Bike Tour Powered by Victory; the biannual Geico Adventure Rally Series Powered by BMW; and the Cycle World Tour at the Quail Motorcycle Gathering Powered by Honda.
“When a motorcycle manufacturer says, ‘Hey come out and ride our motorcycle,’ it sounds like they are trying to sell you a motorcycle,” he said. “But when CycleWorld Magazine says, ‘Hey come ride with our editors,’ and you happen to be riding a motorcycle that’s sponsoring this, it’s much less sales-y.”
The pitch goes beyond bikes.
A recent 8-minute webisode of Motorcyclist magazine’s “On Two Wheels” show featured ads from Cypress-based Toyo Tire Holdings of Americas Inc. and T.J.Maxx, both national advertisers.
Last month the group launched an in-house marketing agency, QuickShift, whose portfolio of services includes video, public relations, social media, custom content, advertising and events.
Its offerings match those “that a traditional marketing agency would do,” Leisner said, but “the difference is that we also have 8.3 million power sports enthusiasts that look at us on a regular basis that we can distribute that content to. You frequently see a company saying, ‘We got to have videos on YouTube,’ and they spend a bunch of money building a video and get maybe a thousand views. We have the ability to create incredible content and then distribute it on our channels and through our syndication partners, such as Roku, Yahoo or MSN.”
Bonnier Motorcycle Group, like Ten, is looking into developing its distribution capabilities with video on demand through the Portico TV app. The free, ad-supported streaming service offers 18 channels, including Cycle World.
Engaged
Nick Singh, president of Engaged Media Inc. in Yorba Linda, also oversees a collection of enthusiast magazines, including Gun World, Firepower, American Survival Guide, Knives Illustrated, Diesel World, Maximum Drive, Drive Magazine, Drag Racer, Street Trucks, Cottages and Bungalows, Flea Market and Romantic Homes.
Healthcare coding and insurance conglomerate Eli Global LLC in Durham, N.C., acquired the company in 2012 from New York-based private equity firm Apprise Media LLC, which bought it in 2005 from now-defunct Y-Visionary in Orange.
It employs 53 and releases about 220 publications a year, both specials and regular magazines with print circulation ranging from 50,000 to 200,000. Singh is starting to look at ways to further monetize more than 50 years of content.
“We do have some digital presence and a lot of digital plans,” he said. “We expect our digital revenues to be 50% in the next three years, and currently it’s only 2% to 3%.”
His top-secret plan—as he calls it—could include an acquisition or a merger with a technology company in the next six to 12 months.
“Currently content is king, and we own a lot of content,” Singh said. “It’s monetizing that content online. There are many different business models that we are looking at right now and many companies perfecting it in other areas. I think if it’s a right partner, a right acquisition, it would be a really good integration into our company. We run as entrepreneurs—we are constantly changing and shifting with the marketplace, and we are always looking for people who think outside of the box.”
I-5 Publishing
Irvine-based I-5 Publishing LLC ushered in 2015 with numerous changes, among them Keith Walter taking over as chief executive in May. He replaced interim chief executive and company co-founder Mike Harris, who together with David Fry bought the assets of BowTie Inc. in 2013. The deal included a roster of enthusiast magazines that included Cat Fancy, Dog Fancy, Horse Illustrated; Urban Farm; the Pet Product News International trade magazine; the AnimalNetwork.com and DogChannel.com websites; and various books, including “Dog Heroes of September 11th” and “The Original Dog Bible.”
I-5 has since reimagined its business to include new digital properties, new events, and a sizable distribution deal.
It acquired Dogster.com and Catster.com last year from San Francisco-based Say Media Inc. last year and replaced the long-standing Dog Fancy and Cat Fancy magazines with bimonthly print versions of the new websites, “to meet the needs of the contemporary marketplace.”
The company last year also took over as Brentwood, Tenn.-based Tractor Supply Co.’s exclusive magazine distributor, a chunk of business that includes 150 to 200 titles delivered to the rural lifestyle retailer’s 1,331 stores nationwide. I-5 Distribution, a subsidiary that handles logistics for the parent company’s publications, took over similar duties for Tractor Supply while counting on Ontario-based Ingram Periodicals Inc. for truck deliveries.
I-5 in March launched Petcha.com, a pet search website that lists postings by breeders and pet rescue organizations. The site’s main sponsor is Trupanion, a Seattle-based pet medical insurance company. It offers a 30-day free trial pet insurance for people who register at Petcha.com. Trupanion doesn’t share revenue with I-5, but it does advertise on its other print and digital properties, including Veterinary Practice News and Rescue Proud.
“It’s a great partnership, and it’s growing really well.” Chief Digital Officer Jennifer Black-Glover said in a March interview.
I-5 in June bought BarkWorld Expo, a conference for bloggers who are pet owners or write about pets, from founder Denise Quashie.
And the company last week said it was getting ready to launch Lucky Puppy, “a lifestyle brand and publication for people dedicated to doing good by adopting dogs (and cats) and integrating them into their homes.”
Walter, since taking the CEO post, has reorganized the newsroom to “make it modern and relevant” to readers and advertisers. He also hired David Katzoff as chief financial officer last month.
“The company is investing heavily in digital and the resources it takes to manage digital,” Black-Glover said. “My team has more than doubled in the past 12 months to 18.”
Walter also cut an undisclosed number of I-5’s editorial staff.
“We were looking for different qualifications,” he said, adding that I-5’s teams “are now more closely aligned to the titles they are working on … Net change is very close to even.”
Emerald
Call Emerald Expositions LLC in San Juan Capistrano an accidental publisher but a growing one. It creates and distributes a range of print magazines that were established primarily to support some of the 80 or so business-to-business tradeshows it puts on around the country.
Its annual PhotoPlus Expo in New York City and the Wedding & Portrait Photographers International show in Las Vegas, for example, are heavily promoted in its Photo District News and Rangefinder print magazines. Rangefinder’s print circulation is 50,500, and it has about 30,000 digital subscribers. Photo District News’ subscriber and newsstand readership base is approximately 20,000 per issue, while its website gets about 312,000 unique monthly visitors.
Emerald also is selling “native advertising” that includes content provided by advertisers across its social media platforms, in newsletters, blogs and on the homepages of pdnonline.com, rangefinderonline.com and shutterloveonline.com. It also offers various photo contest sponsorships.
Its other publications include SportsFan, Contract, Hospitality Design, Kitchen+Bath Business and Design:Retail.
It acquired Healthcare Design and Environments for Aging magazines in March from New York-based Vendome Group LLC. The publications were part of a deal for two namesake conferences. Emerald at the same time also bought Pizza Today magazine and International Pizza Expo from Macfadden Communications Group LLC in New York.
The growth spurt is supported by Toronto-based private equity firm Onex Corp., which purchased the trade show unit of Nielsen Holdings NV in May 2013 for $950 million and renamed it Emerald. Emerald soon made a $335 million acquisition of White Plains N.Y.-based George Little Management LLC. The combined operations have an estimated $300 million in annual revenue.
Emerald also just launched Outdoor Retailer Magazine, a biannual publication focused on outdoor specialty retailers.
“We believe there is a desire for in-depth conversations that print delivers,” the company wrote in the media-buying guide posted on its website for advertisers, adding that the publication will have initial circulation of about 11,300.
Freedom
Freedom Communications Inc. in Santa Ana filed for Chapter 11 bankruptcy last month, looking to unload about $51.2 million in secured debt. And while an uncertain future looms ahead, its flagship Orange County Register and Riverside-based Press-Enterprise dailies will bring in $178 million in revenue and an operating profit of $11 million this year, according to the documents filed with U.S. Bankruptcy Court’s Central District of California.
Freedom prior to its bankruptcy filing rebranded itself as a full-service media company and was looking to its commercial printing division and in-house advertising agency Freedom Custom Content to boost its bottom line.
“Newspapers for years lived very successfully on insert advertising, and we’d seen a continued decline in that area,” said Freedom’s former chief revenue officer, Steve Churm, before he left in November to join Aliso Viejo-based FivePoint Communities Management Inc. as chief communications officer. “Consistent with the industry, we are off this year over last year, in the 7% to 10% range. That forces us to think differently, to be innovative.”
Freedom Custom Content, set up about two years ago shortly after Churm Media joined the company with a number of glossy magazines, has cultivated a roster of clients that now includes Bank of America, CHOC Children’s Hospital, Disneyland, Opus Bank, Hoag Hospital, Kaiser Permanente, JetBlue and Pacific Life. Its staff of former journalists and editors handles everything from marketing strategy and planning to content development, design, photography and video. Freedom’s commercial printing division takes on the final production work, including glossy magazines, brochures and direct-mail pieces, while its digital and print properties can serve as distribution channels for ads and content marketing pieces.
The in-house agency recently completed two 50-page promotional magazines, one for University of California-Irvine’s 50th anniversary, the other promoting FivePoint Communities’ Beacon Park housing tract.
Churm said, “We are helping our clients find new and different ways to engage with their customers.”
