Time Magazine 2013 Annual Report Download - page 28

October 1, 2013, Time Inc. acquired American Express Publishing Corporation (now known as Time Inc.
Affluent Media Group) (“AEP”), including Travel + Leisure and Food & Wine magazines and their related
websites, and entered into a multi-year agreement to publish Departures magazine on behalf of American
Express Company. Time Inc. also publishes special annual issues for certain of its magazine titles, including the
Sports Illustrated Swimsuit issue, the Fortune 500 list of the largest U.S. corporations, People’s World’s Most
Beautiful Woman issue and Time’s Person of the Year issue. In 2013, Time Inc.’s U.S. magazines accounted for
23.7% (including the full-year performance of the titles acquired in the AEP acquisition and Departures
magazine) of the total U.S. advertising revenues generated across the industry by consumer magazines, excluding
newspaper supplements, as measured by PIB. People,Sports Illustrated and InStyle were ranked 1, 3 and 4,
respectively, among all U.S. magazines in terms of 2013 U.S. advertising revenues. In 2013, Time Inc. had seven
of the top 25 magazines based on the same measure.
As of December 31, 2013, Time Inc. published over 70 magazines outside the U.S., primarily through IPC
Magazines Group Limited (“IPC”) in the U.K. and Grupo Editorial Expansión (“GEX”) in Mexico. IPC also
published four magazines through three unconsolidated joint ventures with Groupe Marie Claire. As of
December 31, 2013, Time Inc. also licensed more than 50 editions of its magazines for print or digital
publication to publishers in over 30 countries.
As of December 31, 2013, Time Inc. operated over 45 websites that collectively have millions of average
monthly unique visitors around the world. Most of Time Inc.’s websites share brands with its magazines. For
most of its major magazine titles, Time Inc. also offers digital magazines, websites optimized for mobile viewing
and mobile applications.
Time Inc. has a number of other operations related to publishing. It operates an integrated publishing
business that provides content marketing, targeted local print and digital advertising programs and marketing and
support services to Time Inc. and/or other clients, including other magazine publishers. Time Inc. also publishes
branded books that cover topics aligned with Time Inc.’s brands and include special commemorative and
biographical books. Time Inc. also publishes books under various brands licensed from others and a number of
original titles. In addition, Time Inc. licenses to others the rights to its various brands and properties, including
editions of its magazines, the use of Time Inc.’s trademarks, individual articles, photos and other copyrighted
content and the right to serve advertisements on certain of Time Inc.’s websites in connection with non-U.S.
traffic.
Time Inc. generates revenues primarily from the sale of advertising, subscription sales and newsstand sales.
Time Inc. is experiencing declines in its print advertising and newsstand sales as a result of market conditions in
the magazine publishing industry. Time Inc. generates approximately half its revenues from the sale of
advertising, primarily from its print magazines with a smaller amount from its websites and marketing services.
Approximately one-third of Time Inc.’s revenues are subscription revenues, which include revenues generated by
subscription sales and newsstand sales. People magazine is Time Inc.’s largest magazine title, generating almost
19% of its revenues in 2013.
Most of Time Inc.’s U.S. magazines are sold primarily by subscription and delivered to subscribers through
the mail, and most of its international magazines are sold primarily at newsstands and other retail locations.
Subscriptions in the U.S. are sold primarily through direct mail solicitation, subscription sales agents, Time Inc.’s
owned websites, marketing agreements with other companies, insert cards in Time Inc.’s magazines and other
publications, email solicitations and online advertising. Additionally, digital-only subscriptions and single-copy
digital issues of its U.S. and U.K. magazines are sold or distributed through various app stores and other digital
storefronts across multiple platforms. Time Inc. also sells bundled subscriptions that combine print delivery with
cross-platform digital access. Time Inc.’s subsidiary, Synapse Group, Inc., is a leading marketer of magazine
subscriptions in the U.S. and sells subscriptions to numerous magazines, including Time Inc.’s magazines,
principally through marketing relationships with brick and mortar retailers, Internet sites, airline frequent flier
programs and customer service and direct response call centers. Through its retail distribution operations, Time
Inc. markets and arranges for the distribution of its magazines and certain other publishers’ magazines to retailers
through third-party wholesalers.
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