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Variety Struggles to Meet the Future
More layoffs at Variety; trade to charge for some online content.
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On the day that Variety laid off another 15 staffers including top editors Michael Speier and Dade Hayes, president and publisher Neil Stiles told TheWrap that the leading trade is still “extremely profitable” but has plans to start charging for new online content.
Despite the new layoffs, “Variety is an extremely profitable franchise,” Stiles said. “It’s not some basket case. Is it less profitable than it was? Absolutely. Give me an American corporation that isn’t. Part of the reason we let people go is because times are tougher. We’re trying to take advantage by restructuring.”
Variety continues to struggle with depressed advertising revenues, and just last week it chose a new editor to replace Peter Bart, the highly paid, longtime leader of the newsroom. His former deputy, Tim Gray, now leads editorial.
Clearly there has been a housecleaning at the top. Speier was executive editor, and Hayes was assistant managing editor. There was no word on how -- or whether -- either would be replaced. Stiles said features executive editor Steven Gaydos and managing editor Kirstin Wilder will be staying on.
Stiles said his plan to sustain Variety would not include charging for news content on its website Variety.com but charging for “things to actually help you do your job.” He declined to give a specific example, but observed: “A company that we work with really closely, TVtracker.com, has a bunch of data points about TV development which they put online. If you’re in the TV business, that’s an absolute life line.”
Stiles said Variety’s own reporters, rather than research marketers, are meeting with industry professionals to find out what kind of online products they need and would pay for.
In a Tuesday morning email to staffers, Tad Smith, CEO of Variety parent company Reed Business Information, said Reed would be laying off 7 percent of its workforce and require remaining workers to take mandatory leave. In addition, he cautioned that the company “may need to make additional reductions to fit the business conditions,” and remaining employees will be required “to take mandatory unpaid days off.”
The memo attributed the decision to “our quarterly forecast for the full year and the revenue outlook [that] continues to concern us.” According to Smith, Reed’s financial projections are “worse than our already conservative expectations for 2009.”
Variety used to make 30 to 40 percent profit after taxes, according to former executives. Stiles declined to say how profitable the trade currently is.
Another six editorial staffers were let go in addition to Speier and Hayes, and seven others elsewhere in the company. In January, Variety laid off 30 staffers from editorial, sales and corporate departments, including such heavyweights as marketing chief Madelyn Hammond and top reporter Anne Thompson, leaving an estimated 100 on the staff at that time.
The trade’s main competitor, the Hollywood Reporter, has also been struggling and laid off 12 staffers in July and another 12 in December.
The big question for Variety, of course, is whether, aside from cutting off heads – notably, heads at the top -- they have a plan for moving forward.
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M Says
God they want to charge for their content? First off its not that great. Secondly, you can find the same content in several other places. As a former employee I know they are just setting themselves up for failure. They wast SOO much money in various ways but they whine and complain about not showing a profit. They think that laying off employees is best for the company but they need to look a little more internally at how they run things. There are so many ways they could cut costs but they only look at salaries. The management there is a bunch of idiots and and are destined for failure. Wanna start a pool on how long they will stay afloat? :)
rockyc Says
What a prick. He admits that the mag is still making profits but not as much, so they are "trying to take advantage by restructuring.” Yeah. Renew my sub, Neil.
Done with DV Says
After DV raised its online digital sub price from $14.95/month to $28.99/month, I decided that I could do without. And guess what? I find that I've been managing quite nicely, thanks. As a member of ATAS, I can get a discount, but I'm just not that interested. I can find out whatever I need to know from surfing other sites. DV's problem is that they're just not as relevant as they used to be, if they ever were.
JonathanT Says
Charging for tools that allow industry professionals to do their job is not a new idea: Hollywood 2000, IFILMpro. It didn't work then when users were willing to pay for content, so odds are it won't work now. Yes, there will be some companies/studios that will pay for certain tools and maybe Variety can bring in around 10 million (and that is a stretch) to access those resources. But the money companies pay for those tools does not come out of an ad budget so what will the sales reps over there do all day long? Variety has historically been a sales and marketing organization with the bulk of it's revenue coming from ADVERTISING. A page in Variety is around $20,000. Are they planning on charging $20,000 for access to the Variety.com tools? That sounds like supplemental revenue not something to base a business on. Might want to rethink that strategy...... or be content with a much smaller, less significant, and far less profitable organization. Time to trade in those Mercedes for a sporty Kia Soul.
maybe clueless Says
Maybe I'm clueless as you say. But I think it goes a bit deeper than that. Yes, I used to read Weekly Variety some years ago. It seemed heavily skewed toward broadway and international distribution, things I really don't care about. Like it or not, that was my impression as a reader. I stopped spending the time on it for those reasons....perhaps a disenchanted reader? If it's changed since then, that wasn't promoted in daily variety in any way that lured back "lost" readers like myself. If the company can't promote itself effectively, that's survival of the fittest in the informational world, not ignorance on the part of the consumer....
Clueless Luis Says
Puhleeze Luis. You ever read Weekly Variety? That entire paper is smart analysis from Variety writers. And columnists like Brian Lowry aren't exactly known for regurgitating company lines.
luis Says
Good article Lauren...Variety's problem is that they just regurgitate what they're given by their industry sources. It's a common problem in the run-of-the-mill reporting in the entertainment industry. People now are getting used to serious analysis and questioning of the sources, especially in the political arena and they like it. There's no reason why it can't take place in our industry. What's exciting about newer ventures like Wrap.com is they seem to recognize this and show signs of letting it evolve within the context of their format...keep it up, and thanks....
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