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November 16, 2018

Publishing News

Pioneer Woman to Raise Rate Base to 500,000
MediaPost: "The Pioneer Woman Magazineis raising its rate base from 450,000 to 500,000 with the spring 2019 issue. The magazine debuted in June 2017 in partnership with Hearst, growing Ree Drummond’s popular brand she started with The Pioneer Woman blog in 2006. The magazine features recipes, meal planning and casual entertainment tips, as well as fashion, lifestyle and family advice. It also includes stories from Drummond’s life on her Oklahoma ranch. The initial run of The Pioneer Woman Magazine sold out, prompting a return to press for another 100,000 copies to meet consumer demand, according to Hearst Magazines.In the first half of 2018, the quarterly magazine’s total circulation exceeded its rate base by 59% and delivered more than 200,000 bonus copies. The cover price of the magazine also increased this year, from $3.99 to $4.99 effective with the fall 2018 issue"...

Meredith Luxury Group Hires Two Sales Execs
Release: Meredith Corp. has named Melissa Strome automotive and finance director, and Maria Ellason fashion director, of its Fashion Group. Strome was most recently publisher of Yoga Journal at Active Interest Media; previously, she held senior sales leadership roles at The New Yorker, Every Day with Rachael Ray, and Marie Claire. Eliason joins Meredith from The New York Times, where she was advertising director. Previously, she held senior roles at the Daily Beast, InStyle, and Vanity Fair, where she was executive director of international fashion.

Former Hearst Magazines President Bahrenburg Dies at 71
NY Post: "D. Claeys Bahrenburg, one of the giants of the magazine media world in the booming 1990s, passed away on Nov. 14. He was 71. He was a former publisher of Rolling Stone who joined Hearst magazines as a publisher in 1982 and rose to spend five years in its corner office--overseeing Cosmopolitan, Harper’s Bazaar, Esquire and others as division president. During his tenure, the company was famous for its spirited battles with bitter rival Condé Nast and its CEO, Steve Florio. In his biggest coup, he was given credit for luring Liz Tilberis from British Vogue to New York to rejuvenate Harper’s Bazaar. He left suddenly in 1995 when the company named Cathie Black to take over after an advertising fallout, but a year later he teamed up with Jim Dunning and private equity backers to buy family-owned Petersen Publishing, the publisher of Motor Trend, Sport, Teen and other enthusiast titles for $450M, beating out Primedia. A year later, Petersen had an IPO and then, two years later, sold the entire company to British media conglomerate Emap for $1.5B billion. At the time of his passing, he resided in Orient, NY"...

Court Rules White House Must Restore CNN Reporter's Press Credentials
WaPo: In a ruling on a temporary restraining order request against the White House, "a federal judge on Friday ruled in favor of CNN and reporter Jim Acosta in a dispute with President Trump, ordering the White House to temporarily restore the press credentials that the Trump administration had taken away from Acosta last week. In a victory for the cable network and for press access generally, Judge Timothy J. Kelly granted CNN’s motion for a temporary restraining order that will prevent the administration from keeping Acosta off White House grounds... CNN sued President Trump and other White House officials on Tuesday over the revocation. Kelly’s ruling was the first legal skirmish in that lawsuit. It has the immediate effect of sending Acosta back to the White House, pending further arguments and a possible trial. The litigation is in its early stages, and a trial could be months in the future.Kelly, whom Trump appointed to the federal bench last year, handed down his ruling two days after the network and government lawyers argued over whether the president had the power to exclude a reporter from the White House.In his decision, Kelly ruled that Acosta’s First Amendment rights overruled the White House’s right to have orderly news conferences. Kelly said he agreed with the government’s argument that there was no First Amendment right to come onto the White House grounds. But, he said, once the White House opened up the grounds to reporters, the First Amendment applied... He also agreed with CNN’s argument that the White House did not provide due process. He said the White House’s decision-making was 'so shrouded in mystery that the government could not tell me...who made the decision.” The White House’s later written arguments for banning Acosta were belated and weren’t sufficient to satisfy due process, Kelly said... During the presidential campaign in 2015 and 2016, Trump banned more than a dozen news organizations from his rallies and public events, including The Washington Post. But he said he wouldn’t do something similar as president. Last week, he went back on that statement.Trump’s 2020 reelection campaign has used the CNN lawsuit to drum up contributions, portraying the suit as evidence of 'liberal bias'--an assertion Boutrous brought up on Wednesday to demonstrate that Trump had political reasons for banning Acosta"...

FTC Argues Against Opt-In Approach To Online Privacy
MediaPost: The FTC "is coming out against the idea that companies should be required to obtain consumers' explicit permission before drawing on their online activity for ad targeting. 'If consumers were opted out of online advertisements by default (with the choice of opting in), the likely result would include the loss of advertising-funded online content,' the FTC says in a staff report submitted to the National Telecommunications and Information Administration. The report, unveiled this week, comes in response to the NTIA's call for public comments about online privacy. The report is one of the FTC's first major statements on online privacy since a slate of new Commissioners took over this year. In its report, the agency says it supports a 'balanced' approach that 'weighs the risks of data misuse with the benefits of data to innovation and competition'... In 2016, the Obama-era FTC also rejected an opt-in approach to all forms of online behavioral advertising, but said in a staff report that companies should obtain explicit consent before collecting data it deemed sensitive--including names, financial information and health data as well as information such as search queries, email messages, social media posts, and titles of books read or movies viewed.It's not clear what data the FTC's current report relies on for the proposition that an opt-in system would result in a decline in ad-funded content. The report cited a 2013 study by the ad industry group Digital Advertising Alliance, but that study didn't attempt to predict how the availability of online tracking data affects free content. Instead, the report addresses consumers' views about the internet.For that report, Zogby Analytics asked 1,000 online adults questions about their views regarding online content and advertising. Overall, 92% said free content was important to the internet.Pollsters also asked respondents: “Which of the following would you prefer: an Internet where there are no ads, but you would pay for most content like blogs, entertainment sites, video contact and social media, or today’s Internet model in which there are ads, but most content is free?”Around 75% of respondents said they would prefer free ad-supported content. But that question didn't differentiate between ads served based on tracking data and other types of online ads.The new report comes as Congress is preparing to tackle online privacy. A wide variety of players--including tech companies, the ad industry and consumer watchdogs -- are weighing in with thoughts on how to shape privacy laws.Earlier this month, Senator Ron Wyden (D-Oregon) proposed a “do-not-track” system, which would give consumers the right to prevent information about them from being shared or sold by ad tech companies."

University With Ties to Newsweek Added to DA's Indictment
NY Post: "The money-laundering indictment that initially involved Newsweek’s parent company IBT Media has been widened by the Manhattan district attorney’s office to include fundamentalist Christian college Olivet University and many of its top officers. The scheme is now said to have involved $35M in illicitly obtained funds--more than triple the amount originally thought to be involved in the scheme, according to the indictment... Those charged include Olivet University itself, Andrew Lin, aka Tony Lin, chairman of its board of trustees, Lingyi Xiao aka, John Xiao, Olivet’s finance director and dean of Olivet’s Business School, and William Anderson, chief executive of Christian Media Corp. and an Olivet trustee. They are charged with fraudulently obtaining $25M in financing under the university’s name and 'laundering the money to obscure its origins and fund Olivet’s operations.' The latest indictment supersedes and includes last month’s announced charges--against IBT Media, aka the Newsweek Media Group, Etienne Uzac, a co-founder and former chairman of IBT Media, and Anderson of Christian Media--of money laundering $10M through a network of banks. 'After unmasking the scheme to keep Newsweek and Christian Media Corporation afloat, my office’s major economic crimes bureau skillfully followed the money, revealing an even larger scheme to defraud lenders throughout the country and cycle the ill-gotten gains through a maze of corporate bank accounts,' said District Attorney Cyrus Vance in a statement. 'If you illegally move money through New York’s financial system, my office will hold you accountable, whether your business is securities, magazines or university degrees,” said Vance, who noted the investigation remains ongoing. 'Olivet University denies the charges announced [Thursday] by the District Attorney’s Office and will vigorously defend itself against these unsupported allegations — including the puzzling claim that lenders who have suffered no loss were somehow victimized,” said Olivet spokesman Ronn Torossian. Uzac had previously claimed that he felt the charges were brought because of Newsweek stories critical of Vance’s handling of the sexual misconduct claims against Harvey Weinstein. 'The individual and corporate defendants borrowed money, as every business does, and paid the money back, as every business should,' Marc Agnifilo, a spokesman for IBT Media and Uzac, said in a written statement"...


Retail News

Walmart Among Retailers Seeing Stocks Slump Amid Market Volatility
WSJ: "Shares of retailers are sliding despite third-quarter results that suggest consumer spending is strong, the latest signal that investors are focused on broader worries about global growth and higher interest rates. Walmart Inc., Macy’s Inc. and Home Depot Inc. have suffered steep share-price losses this week, even after posting relatively robust results. Walmart reported a rise in quarterly sales and boosted its profit outlook for the year Thursday, but its shares slipped 2%, extending their losses for the week to 5.7%"...
Wall St. Journal (paid sub req.)

Ahold Delhaize USA to Launch Digital Media Service
SN: "Eyeing a new revenue source, Ahold Delhaize USA plans to launch a digital media service through its Peapod Digital Labs unit.The food retailer said Thursday that the service, called Peapod Digital Labs Media Partnerships, will help consumer packaged goods (CPG) manufacturers target, optimize and measure digital media campaigns for their brands. Powered by Quotient Technology, the media service will span all customer contact points and link customers’ online and offline shopping experiences. Peapod Digital Labs’ media platform is slated to go live in the coming months, and all Ahold Delhaize USA grocery retail brands will participate, including supermarket chains Stop & Shop, Giant Food, Giant/Martin’s, Food Lion and Hannaford and online grocer Peapod. Connected solutions for CPG advertisers created via the platform will run on the digital properties of Ahold Delhaize USA grocery brands, Quotient’s digital properties and, as well as major social platforms and third-party digital publisher properties... 'The benefit that creates for our customer is that it allows us to take media and content and get it to her directly at the channel of her choice," said JJ Fleeman, president of Peapod Digital Labs. 'And you would also imagine, this will generate new revenue streams for Ahold Delhaize that will help fund the new omnichannel strategy that we plan on launching here soon.' For CPG brands trying to reach shoppers at Ahold Delhaize USA supermarkets and Peapod, the new platform will provide media solutions to help spur online grocery sales, roll out new products, amplify in-store events, boost brand loyalty and support shopper themes, the retailer said. To that end, Peapod Digital Media Partnerships will target shopper audiences using exclusive point-of-sale captured purchase data from more than 25M active shoppers and deliver highly relevant, actionable advertising vehicles, including digital coupons, store locators, add-to-cart for online purchases and influencer-led social platform experiences, according to Ahold Delhaize. Media will be executive across all digital display formats and into social platforms, and advanced analytics will sharpen media performance by linking ad views to shoppers’ verified purchases, the company said. As digital interactions with consumers and trading partners escalate, retailers and businesses of all stripes have been sizing up incremental revenue opportunities from leveraging their online and mobile properties and stores of data. For example, Kroger Co. executives said last month that the company aims to monetize the rich data amassed from its position as the nation’s largest supermarket company, with 2,800 stores, vast digital properties, millions of daily transactions, and extensive technology and analytics capabilities. Kroger estimates that business through partnerships, media, CPG insights and personal finance is expanding at a 16% compound annual growth rate in EBIT and is projected to have a 28% CAGR through 2020 and a 34% CAGR through 2022."

Ahold Looking for U.S. Acquisitions
MNB cites a Reuters report that "Ahold Delhaize, which owns Stop & Shop and Giant and has a presence largely limited to New England and the Mid-Atlantic states, is looking for acquisitions in the U.S. "CEO Frans Muller made the revelation in an interview with a Dutch newspaper. 'We have a strong market share in regions where we are active. That gives us a good starting point to join in the acquisition game,' Muller told Financieele Dagblad. According to the Reuters story, 'Ahold Delhaize has said in the past it mainly planned to grow organically in the U.S., where it generates two-thirds of its sales and operates Peapod, the leading online grocery delivery business… There were no details about possible targets or how much the company might spend in the report.'"

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Smart & Final Upbeat on Foodservice, Online Sales Growth
SN: "Smart & Final Stores Inc. got a lift in Q3 from rising sales at its foodservice banner, helping the warehouse-style food retailer beat financial analysts’ earnings projection. For the 16-week quarter ended Oct. 7, S&F reported revenue of about $1.5B, up 2.8% from $1.45B a year earlier. The Commerce, Calif.-based company said the increase stemmed from an 0.6% uptick in same-store sales and business at new stores. Comp-store results reflect a 1.9% gain in average transaction size that was partially offset by a 1.3% decrease in transaction count, according to S&F, which added that the product pricing deflation rate year over year was -0.7%. At S&F and S&F Extra! stores, Q3 sales totaled $1.14B a 2.6% gain from $1.1B a year ago. Comp-store sales inched up 0.2%. The Smart Foodservice Warehouse unit saw sales climb 3.3% vs. Q3 2017, to $353.6M, with same-store sales up 2%... E-commerce sales for the quarter doubled for the S&F banner and surged 500% for the Smart Foodservice stores, according to president and CEO David Hirz. 'We’re investing in both our delivery and buy-online-pickup-in-store offerings. Across both banners, we're seeing strong adoption rates for our e-commerce offerings,” he said, noting that Click & Carry store pickup service helped drive results. 'And after a successful pilot in the San Francisco Bay Area, we recently added a second delivery pilot for our Smart Foodservice banner in the Portland, Ore., market. With this third-party delivery option, we're serving small businesses and restaurant customers with temperature-controlled vehicles up to a 50-mile radius from our pilot stores.' Reported net earnings for Q3 were $10.2M, or 14 cents per share, vs. $5.1M, or 7 cents per share, a year ago. The net income result reflects charges of $24.6M from new-store pre-opening costs, noncash rent from stores, share-based compensation expense and store closing costs. On an adjusted basis, net income was $16.9 million, or 23 cents per share, versus $12.9M, or 17 cents per share, a year ago. Analysts’ consensus estimate was for adjusted earnings per share of 17 cents, according to Zacks Investment Research. S&F reported adjusted EBITDA of $62.3M for the quarter, down 1% from $62.9M in the prior-year period. S&F opened three new S&F Extra! stores in Q3, relocated and converted one legacy S&F store to an Extra! format and closed one legacy S&F store. For fiscal 2018, the company expects unit growth of four new S&F Extra! and three new S&F Foodservice Warehouse stores. Plans call for three legacy S&F stores to be relocated and/or expanded to the Extra! format"...

Sanders Wage Bill Targets Walmart
RetailWire: "Senator Bernie Sanders (I – VT) and Rep. Ro Khanna (D – CA) have introduced legislation that would prevent companies with at least 500 employees from engaging in stock buybacks if they do not pay workers a minimum wage of at least $15 an hour. The proposed bill, Stop Welfare for Any Large Monopoly Amassing Revenue from Taxpayers Act (aka the Stop Walmart Act), would also cap CEO compensation at no more than 150 times the median pay of all workers and provide a mechanism for employees to earn up to seven days paid sick leave. The introduction of the legislation follows a similar public relations push by Sen. Sanders against The e-tail giant recently increased its minimum hourly wage to $15. The bill takes direct aim at Walmart’s $20B plan to reacquire company stock over the next two years. A study by the Roosevelt Institute, a liberal think tank, concluded that Walmart could raise the pay of its lowest wage workers by $5.66 an hour with half of the funds being used for the buyback. 'Walmart has refused to pay its workers a living wage, resulting in costs for taxpayers of $6.2B for basic necessities for survival, food stamps and housing assistance. If Walmart can find $20B for stock buybacks to further enrich the Waltons, it can find the money to raise the pay of its workers to a living wage,' said Rep. Khanna. In January, Walmart announced it was increasing its minimum wage from $9 an hour to $11 while distributing one-off bonuses for workers of up to $1,000 following the 2017 passage of the new tax regulations. A National Retail Federation analysis concluded that the average employee of a U.S. “C” corporation is being paid nearly $4,700 less per year based on the previous corporate tax rate of 35%. In his first state of the union address, Trump said lowering the rate to 21% would help 'increase average family income by more than $4,000.'"

Some Retailers Hiring Workers Sans In-Person Interviews
WSJ: "Eager employers trying to lure workers in the tightest job market since 1969 are hiring some candidates sight unseen, at times after one phone interview. The practice has become most common in seasonal work, particularly retail, although it is spreading among certain in-demand white-collar roles, such as engineers, IT professionals and teachers... CVS Health is piloting a program in which workers at some distribution centers don’t meet with a human until the day they start their jobs. Recruiters base hiring on candidates’ performance in a 'virtual job tryout' and online assessment. CVS still requires in-person interviews for jobs such as cashiers and corporate positions, said Jeffrey Lackey, vice president of talent acquisition at CVS Health. Reducing the time it takes to hire a qualified employee is critical when an applicant could snag a job elsewhere, he says. 'Any recruiter worth their salt knows that time kills all deals'"...
Wall St. Journal (paid sub req.)

Bezos: 'One Day, Amazon Will Fail'
CNBC: "Amazon CEO Jeff Bezos told employees, in response to a question at an all-hands meeting last week, that the company is not "too big to fail."Bezos was asked a similar question at an internal meeting in March about Amazon's size and the potential for government regulation.Bezos is addressing the concerns as Amazon prepares to expand into two new headquarters locations in New York and Virginia... 'Amazon is not too big to fail,' Bezos said... 'In fact, I predict one day Amazon will fail. Amazon will go bankrupt. If you look at large companies, their lifespans tend to be 30-plus years, not a hundred-plus years.' The key to prolonging that demise, Bezos continued, is for the company to 'obsess over customers'... If we start to focus on ourselves, instead of focusing on our customers, that will be the beginning of the end,' he said. 'We have to try and delay that day for as long as possible.' Bezos' comments come at a time of unprecedented success at Amazon, with its core retail business continuing to grow while the company is winning the massive cloud-computing market and gaining rapid adoption of its Alexa voice assistant in the home. But some employees are expressing concern about the pace of expansion. Amazon's workforce has grown by more than 20-fold in the last eight years to over 600,000 employees, and the stock price has more than quadrupled since 2013. The company has caught the ire of President Trump, who has employed personal attacks against Bezos, and is now catching flack for demanding that cities spend a year coming up with a roster of incentives attractive enough to woo Amazon's HQ2... Amazon is expected to capture 48% of all online sales in the U.S. this year, up from 43% in 2017, according to eMarketer.  Its AWS service is by far the leader in cloud computing infrastructure, capturing about 34% of the U.S. market, Synergy Research Group said in a recent report. An Amazon spokesperson didn't comment on the all-hands meeting. Regarding potential antitrust issues, the representative pointed to a Wall Street Journal interview with Jeff Wilke, Amazon's CEO of the worldwide consumer division, in which Wilke said the company is engaged in a diverse group of businesses and accounts for "less than 1%" of the global retail market"...


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