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October 18, 2017

Publishing News

Folio: Survey: Magazine Companies Bullish on Growth for 2018
Folio:'s Tony Silber writes: "Put the brakes on the narrative that says the magazine-media industry is in an inexorable decline. It’s not the case for the people actually on the ground, making this happen. That’s one highly noteworthy takeaway from a new survey of Folio: readers asking their outlook for 2018. Asked whether they anticipate their revenue will grow next year, and if so, by how much, nearly 40% of respondents said yes, they do, and by double digits. Another 30% said they expect to grow in the single digits. Combined, that’s just shy of 70% of survey respondents saying they expect to grow next year, in a period dominated by turmoil, downsizing, [Facebook and Google], and migration of advertising and of readers away from print. In that same question, 25 percent of respondents said they expect revenue for 2018 to be flat, and just 5 percent expect to see a decline. You can spin this remarkable finding in a number of ways, but the upshot is that respondents in this particular survey expect to see growth. The survey was conducted in August and September, with respondents covering a wide range of media sectors, including B2B, association, and mass and niche consumer. So naturally, the obvious next question is, if you expect growth, where is it going to come from? And here, the answer is events. Nearly 54% of respondents said events will drive growth in 2018, with print and digital advertising—separately—close behind, with 46% of respondents saying those revenue sources will drive growth. Interestingly, other services performed on behalf of advertiser customers—clustered under the title of marketing services—is a big priority for 2018, according to respondents. Almost 36% of respondents say this is a critical area of growth, as well. This group of respondents skews in the direction of the print-centric part of the Folio: audience. Their current 2017 revenue is overwhelmingly print oriented, with print making up nearly half--46%--of these respondents’ aggregated revenue. Digital was slightly more than 20%, events were 15% and marketing services was 12%. Various other revenue sources made up the remaining 5%. Connecting the dots, if print is the current primary source of revenue for respondents, and growth is expected in events, digital, and marketing services in addition to print advertising, then it stands to reason that those first three are the fastest-growing areas of business for respondents. Our data bears that out, with digital being the fastest growing, followed by marketing services and events. Underpinning growth, of course, is investment. We asked our respondents to state their priorities for 2018, and the number-one priority, cited by 23 percent of respondents, was investment in database-management tools. This was followed by a commitment to bring in new skillsets (presumably to manage and analyze that data) and by entrepreneurship: launching a spinoff brand, to be specific..."

NY Post Sources Claim More Layoffs Ahead at Time Inc.
NY Post's Keith Kelly reports unnamed sources saying that Time Inc. (which said in June that it planned to cut 300 employees worldwide, in part through voluntary buyouts/layoffs) is "readying another round of layoffs"--about 200 expected, "about half of which will come from the editorial ranks." On the asset sale front, he writes that PE firm Epiris is "reportedly closing in on a deal to buy [Time Inc. U.K.] for just under $200M, while a "hoped-for" $300M sale of Tampa-based Time Customer Service has "attracted some interest from foreign outsourcing firms" but "considerably less interest from U.S. firms"...

'Grading' Wintour's Tenure as Conde Nast's Artistic Director
Digiday's Lucia Moses offers opinions and assessments from executives outside and inside Condé Nast on how Anna Wintour has changed the company since she was named its artistic director (in addition to her role of Vogue editor-in-chief) four years ago--and what challenges and opportunities she and the company will face going forward.

Opinion: Utah State Politician Labels Cosmo 'Porn'
In MediaPost, Erik Sass writes in part: "You probably won’t be surprised to learn that Utah has an office (currently unfilled) for a state 'porn czar.' The job it is to keep smut from the eyes of children, or otherwise infiltrate the lives of upstanding citizens. However, you may be surprised to learn that the definition of pornography advanced by at least one local politician includes Cosmopolitan. Yes, the popular women’s magazine--famed for its naughty quizzes and moderately salacious sex tips, is a prurient menace to the children of Utah, as well as right-thinking adults, according to state senator Todd Weiler. He wants to dust off the office of porn czar, presently defunct, in order to tackle the giggly glossy. This, despite the fact the magazine has never featured, you know, actual nudity. Weiler previously proposed mandatory porn-screening software on all smartphones operating in the state. In 2016, he authored a bill declaring porn a public health crisis. Now, he is urging Utah to fill the office of 'Obscenity and Pornography Complaints Ombudsman,' which was allowed to fall into desuetude in 2003 after making Utah into a national laughingstock. According to Weiler, the office of porn czar should be filled to offer guidance to retailers on the fine points of selling magazines that mention S-E-X, including Cosmo. Per The Salt Lake Tribune, which first reported the news with some incredulity, Weiler 'became convinced that the obscenity and pornography complaints office may be needed because of an ad campaign attacking Cosmopolitan magazine as illegal porn.' This refers to an ongoing campaign by Hearst heiress Victoria Hearst, founder of Praise Him Ministries, who has turned on the family business because of [what she alleges is] the 'obscenity' featured in its flagship women’s magazine, which she says should be illegal for sale to anyone under the age of 21. Weiler, the chairman of the Utah state senate’s judiciary committee, tells the SLT: 'I've received some complaints...that stores are selling Cosmo at eye level to a child.' Worse yet, 'there's no blinder rack on it, even though we have some blinder rack language in the state code.' Under Utah’s Material Harmful to Minors law, retailers are prohibited from prominently displaying any item that presents 'any description or representation, in whatsoever form, of nudity, sexual conduct, sexual excitement, or sadomasochistic abuse when it: 'taken as a whole, appeals to the prurient interest in sex of minors; is patently offensive to prevailing standards in the adult community as a whole with respect to what is suitable material for minors; and taken as a whole, does not have serious value for minors.' The proposal has met opposition from none other than the Utah attorney general, who is recommending that state legislators jettison the position of porn czar altogether."

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Ad Execs Weigh In on Sexual Harassment in Fashion
WWD: "While no industry is immune to sexual harassment, the modeling/photography world has always been rife with stories about how certain photographers have taken advantage of young women and men or lewd behavior on the set or the runway. Over the last several days, Cameron Russell, a well-known model, has been gathering stories from models on her Instagram feed about sexual harassment in the fashion world. So far, she’s collected more than 75 anonymous posts, which talk about abuse from photographers, lewd behavior, sexual advances and other sexual harassment." Several advertising executives make on-the-record comments about harassment--mostly acknowledging that it happens in advertising along with every other industry, while asserting it does not happen during shoots for their own work.
WWD (ad execs comment)
WWD (Russell gathers models' stories)

TEN Among Publishers Talking About 'Digital Pivot'
During a panel at MediaPost's Publishing Insider Summit yesterday, Michael Suggett, VP and executive producer of original programming for TEN: The Enthusiast Network, said "that over half of the company's video views come from mobile, including the content behind TEN’s paywall. The “life cycle” of TEN’s long-form shows starts out behind a paywall and revenue comes from paying subscribers. Then, it is launched in front of the paywall and sponsored by a brand. Afterwards, it is cut for Facebook and other social platforms and served with pre-roll and mid-roll. This results in 'lots of impressions from one asset,' Suggett said." Article reports on other panelists' points about video, and notes that panelists agreed that "The key to producing and monetizing video content is to ensure it is distributed cross-platform, with a mix of mobile-friendly advertising."

French Mag Draws Outrage for Putting Convicted Killer on Cover
NYT: "A French music magazine that drew criticism for featuring on its cover a rock star convicted of fatally beating his girlfriend has acknowledged that the decision was 'questionable' and expressed its 'regrets' to those who were offended. The weekly magazine Les Inrockuptibles featured Bertrand Cantat, who was convicted in the 2003 death of his partner, Marie Trintignant, on the cover of its Oct. 11 issue, timed for the release of a single from the singer’s new album..."

Why the U.K. Likely Won't Define Facebook, Google as Media
Last week, The Guardian reported that the U.K. government "is considering changing the legal status of Google, Facebook and other internet companies amid growing concerns about copyright infringement and the spread of extremist material online.The internet groups are considered conduits of information rather than publishers under UK law, meaning they have limited responsibility for what appears on their sites. However, the chairman of the media regulator Ofcom said on Tuesday she believed the likes of Google and Facebook were publishers, raising the prospect that they could eventually face more regulation. [Culture secretary Karen] Bradley said she was wary of labeling internet companies publishers but that the government wanted to find a balance between harnessing the benefits of the web while making it safe for users and protecting intellectual property"... Digiday reports that some experts say that the U.K. will not define the platforms as media due to freedom of the press and other issues, but seek to pressure the platforms into faster, stronger self regulation. But others say that "surgical" regulation is what's needed.


Retail News

Supervalu to Acquire Associated Grocers of Florida
PG: Supervalu Inc. has agreed to buy Associated Grocers of Florida Inc. for about $180M. "The deal enables Eden Prairie, Minn.-based Supervalu to expand its operations into a new part of Florida, and bring its products and services to Associated Grocers’ diverse customer base in south Florida, the Caribbean, Central and South America and Asia. Further, as part of the pending transaction, Supervalu has come to a long-term supply agreement with Associated Grocers’ largest customer that will become effective when the deal closes.Pompano Beach, Fla.-based Associated Grocers is a retailer-owned cooperative that distributes full lines of grocery and general merchandise to independent retailers, mainly in the regions cited above. Its customer base consists of conventional, specialty and ethnic stores. The company operates two distribution centers, has about 650 employees and owns around 1.5 million square feet of real estate. During its last fiscal year, which ended on July 29, its revenues were about $650M.' Associated Grocers represents a great opportunity for us to further expand our wholesale business into another important region,' said Supervalu President and CEO Mark Gross. 'We believe Supervalu is uniquely positioned to be the supplier of choice across the grocery industry, and this acquisition is another example of how we're delivering on our growth strategy'"...

Amazon Installing Package Rooms In Apartment Complexes
MediaPost rounds up reports: "' is taking over the package rooms of some of the country’s largest apartment landlords, in a move that could help consolidate its control over how goods make it from the warehouse floor to the front door,' reports The Wall Street Journal... 'Amazon has signed contracts with apartment owners and managers representing more than 850,000 units across the U.S. to begin installing Amazon locker systems in their buildings, according to the landlords. Amazon has commitments to install the lockers in thousands of properties, many before the peak holiday shopping season, according to a person familiar with the matter.' [Bloomberg observes] that 'the lockers are designed to prevent lobbies and mail rooms in multifamily housing units from getting overrun with packages. The units also secure packages so residents can get their items after hours when an apartment’s management office may be closed. Such lockers are becoming must-have amenities in apartment complexes as tenants shift more spending online and lack a convenient way to receive their purchases'"...

Ahold Delhaize Banners Team With IRI for Data, Analytics
PG: "Ahold Delhaize Licensing, SARL, a company of Ahold Delhaize, and market research firm IRI have entered into a long-term agreement for IRI to serve as the primary partner and analytics platform of record for the brands of Ahold USA and Delhaize America. These banners represent the largest grocery retailer group on the U.S. East Coast, including Stop & Shop, Food Lion, Giant Foods, Giant/Martin’s and Hannaford. Through its technology platform, IRI Liquid Data, Chicago-based IRI will provide integrated point-of-sale, frequent shopper program and supply chain data for Delhaize America and point-of-sale and supply chain data for Ahold USA. In addition, the banners and their suppliers receive easy access to best-in-class consumer insights and analytics, empowering better and faster business decisions; better targeting capabilities to reach customers; and improved effectiveness of marketing campaigns to drive higher ROI. 'This is a transformational alliance that will give the brands of Ahold USA and Delhaize America a more comprehensive understanding of their businesses, improve collaboration with suppliers, and provide a holistic view of the customer,' said JJ Fleeman, chief strategy and development officer for Salisbury, N.C.-based Delhaize America..."

Target Opening 12 New Stores This Week; All But 1 Small-Format
Minn. Star-Tribune: Target is opening a dozen new urban stores this week, including a 21,400-sq.-ft. one in Uptown Minneapolis that "Target thinks it knows what the young professionals who live in Uptown want from its newest store: activewear, Starbucks and lots of groceries, especially organic varieties... Also on the roster is one in high-profile Herald Square in midtown Manhattan across from Macy's flagship store, as well as locations in and around Chicago, Los Angeles and Philadelphia. All but one of the new stores opening this week, a full-size store in Honolulu, are Target's smaller-format stores. While other traditional retailers are closing multiple locations as they struggle to adopt to online shopping, Target has been doubling down on stores through remodels and the new smaller formats. Target opened its first small-format store in 2014 in Dinkytown near the University of Minnesota. It has since opened dozens more around the country--including one in St. Paul's Highland Park neighborhood--placing them in underserved areas such as college neighborhoods or in dense urban and suburban areas where its bigger stores wouldn't otherwise easily fit... The retailer is opening 32 new stores this year, most of them with the smaller format, and is planning to ramp up the pace in the next couple of years to 40 new stores a year... Target sees an opportunity to leverage its new stores for both in-store and online shopping. 'These [smaller stores] are unlocking tremendous value," John Mulligan, Target's chief operating officer, told analysts earlier this year. "They have more than two times the sales productivity of our average store. So even with higher operating costs they generate healthy returns."

Wal-Mart/Jet to Continue Acquisition Strategy
MNB cites a Wall St. Journal report that "Marc Lore, who is running Wal-Mart’s and Jet’s e-commerce businesses in the US, said this week that 'the online retail division is still in growth mode, the fruits of which will start paying off over the next two years and help it better compete with Amazon.' 'E-commerce is a scale game,' Lore told WSJ at a technology conference. 'We’re looking at a lot of different things right now, everything, in every sector.'" MNB adds that TechCrunch quotes Lore as saying that one can expect W-M and Jet 'to crush it over the next two years,' and that he 'wouldn’t trade our position with anyone right now.' TechCrunch writes that 'Lore claims that it already has the infrastructure to do overnight delivery for 87% of the country and is working on spreading out inventory to these warehouse locations.”

Survey Finds 3 Groups of Shoppers
MNB: "A new survey suggests that a survey of US shoppers, designed to look at their preferences for bricks-and-mortar shopping vs. e-commerce, concludes that respondents were somewhat--and fairly evenly--divided into three groups: those who prefer to shop online (32.5%), in-store (29.7%), and a combination of both (37.8%). According to the survey, commissioned by Imprint Plus, 'Consumers who shop in-store reported the need to see, touch, and handle merchandise as part of the buying experience, as well as on-the-spot sales and not having to wait for delivery. When it comes to purchasing food, the majority of the consumers surveyed (86.1%) prefer to shop in-store because of the ability to judge quality and freshness. Shopping online for food presents challenges including the need to be home to accept delivery and the inability to use the senses in seeing and handling the merchandise offered.'"

More on Safeway's Eastern Division: Third New President in 3Years
Washington Business Journal: "Thirteen months after Albertsons Cos., Safeway's parent, named [Dan] Valenzuela president of the 125-store division, he's been replaced by another industry veteran--the third person to lead Safeway's Virginia, D.C., Maryland, Delaware and Pennsylvania stores in three years..."

Sainsbury's to Cut 2,000 Jobs in Cost-Reduction Drive
BBC News: "Sainsbury's has said it will cut up to 2,000 jobs from its human resources staff as part of plans to reduce costs. The UK's second biggest supermarket chain says the "difficult decision" will affect roles in stores, as well as in the company's central offices. It plans to make 1,400 payroll and HR clerks redundant and other changes could see another 600 posts removed. Sainsbury's is looking to save £500m amid fierce competition from discounters and rising food costs. The majority of the headcount losses will be from within its supermarket stores..."


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