TV Guide, struggling to stay relevant, is getting a makeover |

TV Guide, struggling to stay relevant, is getting a makeover

NEW YORK – People used to thumb through the TV Guide to find their favorite shows. Now they scroll through on-screen programming guides and point and click.Faced with the challenge of staying relevant in the Internet age, TV Guide, an iconic magazine for two generations of Americans, announced an overhaul Tuesday that will transform the title into a larger, full-color format with a mix of 75 percent stories about TV shows and stars and 25 percent listings, the reverse of the ratio it has now.The revamp also calls for the magazine to slash the circulation it guarantees advertisers by nearly two-thirds, from 9 million to 3.2 million and eliminate an unspecified number of jobs. The changes will go into effect with the Oct. 17 issue.Parent company Gemstar-TV Guide International Inc. already is a major provider of on-screen programming guides and the technology they use. But the changes represent a complete overhaul of the magazine’s business model, one that some advertisers felt was long overdue.Eric Blankfein, senior vice president Horizon Media Inc., a media and advertising buying company, said TV Guide had been considered “old, staid and stodgy” among advertisers. “The magazine was an aging property that didn’t have the freshness that a lot of the competition has,” he said.Gemstar’s CEO Rich Battista said in an interview that the company’s research found its readers would be more interested in a magazine with fewer listings and more stories about TV shows and their stars. He acknowledged that the digest-size magazine was losing money, but he declined to say how much.”We didn’t believe in its old form that the digest-size magazine was sustainable,” Battista said. “Any brand has to evolve in a dynamic marketplace where consumer tastes are changing rapidly.”Brian Urban, Gemstar’s chief financial officer, said on a conference call that the magazine’s revenues have been declining over the past decade as other forms of TV listings have proliferated and as the magazine’s newsstand and advertising sales have declined.John Loughlin, the president of TV Guide’s publishing group, said in an interview the higher per-unit costs of producing the larger-format magazine would make it uneconomical to distribute in some of the ways it had in the past. The magazine will be eliminating 3 million copies in “sponsored” sales, such as those distributed in hotels.In another cost-cutting move, TV Guide will also streamline how it produces the magazine, eliminating its 140 localized editions in favor of a national edition, with either an Eastern or Pacific time zone designation.TV Guide said it expected to incur losses of up to $110 million over its 2005 and 2006 fiscal years, which exclude losses from its recently launched title Inside TV, a celebrity magazine for younger readers which the company said is not performing as well as expected so far due to delays in building up distribution.The news depressed Gemstar’s already weak stock, sending its shares down 35 cents or 9.9 percent to $3.18 in trading Tuesday on the Nasdaq Stock Market, toward the lower end of its 52-week range of $2.93 to $6.39.Gary McDaniel, an equity analyst with Standard & Poor’s, said the company would be better off trimming costs instead of investing more in a magazine with printed TV listings when so many people find TV programs through digital guides. “It’s really not a business I would be investing in,” he said.By focusing more on entertainment and stars, the magazine is also entering an extremely competitive arena already dominated by powerful magazines like US Weekly, People and Entertainment Weekly, McDaniel said.The changes come as Gemstar-TV Guide is trying to put a tumultuous period behind it. Gemstar’s former CEO Henry Yuen and former Chief Financial Officer Elsie Leung left the company in 2002 and have been charged with inflating the company’s revenues. The company agreed in June of last year to pay a $10 million penalty to settle Securities and Exchange Commission charges of revenue fraud.Gemstar’s struggles have been a sore point for media tycoon Rupert Murdoch, whose far-reaching media conglomerate News Corp. owns about 40 percent of the company. News Corp. took a $6.1 billion charge in 2002 due related to its investment in Gemstar.Loughlin said the magazine would also lower its cover price to $1.99 from $2.49 as part of an effort to build up newsstand sales, which are more profitable than subscription sales. The magazine will also triple its lowest introductory price of 25 cents an issue for subscribers.The company said it expects the relaunched TV Guide magazine to become profitable in about three years. TV Guide also said it would explore the sale of SkyMall, its in-flight catalog magazine business.—On the Net:Company site –

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