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April 24, 2015

Publishing News

Time Inc.: Some Tech Jobs Outsourced to Malaysia; Top Execs' Salaries Published
NY Post reports: " Six workers at People, who were in charge of setting up the tablet and smartphone apps for mobile readers, were recently told that their jobs were being exported--to Malaysia. More specifically, to a company called WoodWing in the town of Cyberjaya in Malaysia’s state of Selangor. Insiders said the cutback is scheduled to take hold in early June, when the jobs — three permanent staff jobs and three long-term contract positions — will be eliminated on the home front. Many see it as the endgame for the failed promise of the tablet, which only a few short years ago was viewed as the salvation of magazine publishing...A Time spokeswoman said the publishing company does not comment on personnel matters.” The Post item, and a WWD item, also report on the top-executive salaries revealed in Time Inc.'s proxy statement, released Tuesday. According to WWD's version, chairman and CEO Joe Ripp saw his total compensation shrink 35.5% to $5.8M, due mainly to a 68.1% reduction in stock and options awards, which totaled $2.4M. His base salary grew 230%, to $1M, and his bonus expanded 22.2%, to $1.1M. EVP, chief content officer Norman Pearlstein earned a salary of $903,458, up from $128,077 when he joined the company in fall 2013, but his bonus amounted to $270,000, down from the $1.4M “make whole bonus” that he received when he joined Time Inc. in 2013. His total compensation was still up 64.3% in 2014 to $2.5M. EVP, CFO Jeffrey Bairstow, who joined at the same time, netted a 37.7 percent rise in total compensation, to $3.4M, on a salary of $825,000 and a bonus of $590,000. EVPs Evelyn Webster and Todd Larsen both saw gains in their total compensation. Webster, who at the time split oversight of Time Inc. properties with Larsen, saw a 64% bump to $2.8M. Larsen, who was let go in December, recorded a 68.5% jump to $2.5M. Webster’s salary rose 6.4% to $790,250, but her bonus fell 18.3% to $175,455. Larsen’s salary grew 6.2% to $796,731, but his bonus declined 13% to $176,137. Since Larsen’s dismissal, Webster has gained oversight of 26 of the 28 domestic titles published by Time Inc., which includes InStyle, People, Sports Illustrated and Fortune.

Time Inc. CTO Navigates Move To Amazon
Colin Bodell, the CTO of Time Inc., has been in the job for a little over a year, and he's accelerating the media company's move from legacy data centers into the cloud. Time is starting with basic compute, networking, and storage, but Bodell expects to use Amazon Web Services' more advanced services as it moves deeper into the digital age of publishing. Time has moved the hosting of its Drupal content management system from to Amazon, and Bodell says that has reduced a $70,000 monthly expense at Time's U.K. sites to $17,000. "That 76% drop is money that I can apply to improved digital systems and content management," he said in an interview this month in San Francisco, during an Amazon Summit. Bodell's goal is to have 80% of operations based on AWS by October. "By 2016 we will have gotten rid of two data centers and scaled back a third" of five data centers, he said. The process will continue through 2016.

Toyota Test-Drives Forbes' New Sponsored Content Platform
ovember 2010, launched BrandVoice at a time when the concept of native advertising wasn't well known. Five years later, the site is rolling out a new sponsored content platform called Pulse. With help from Droga5, the effort kicks off today with Toyota in the driver's seat. In addition to trivia questions, data visualization and video content, the automaker's month-long Pulse dashboard will include feature pieces based on the tagline "Fueled by Skepticism." The idea is to highlight automotive and technological innovations once predicted to have little chance of commercial success. "About a year ago, we upgraded our homepages for staffers, contributors and marketing partners," Forbes' chief product officer Lewis D'Vorkin told Adweek. "We upgraded very visually, and we gave marketers the tools to program. With Toyota, we've made it very high-touch. The same page that was built for editorial, high-touch, has been built for Toyota, high-touch. Toyota's content has the same look and feel, transparently labeled. Pulse is, for us, a consistent continuation of building a page that works the experience, as consumers see it, on Forbes—fully labeled, fully transparent. I believe we are unique in creating pages like that." At the end of the campaign, Toyota will get detailed engagement metrics like average dwell time and scroll depth. Each Pulse campaign also includes some content in the print edition of Forbes. No one on D'Vorkin's editorial team was involved in the creation of Toyota's campaign content—the BrandVoice team operates separately and reports to chief revenue officer Mark Howard. "As chief product officer, I kind of sit horizontally across from it all," D'vorkin said. "I worked with the development and design people to implement all this. But the content comes from Toyota and our BrandVoice team."

Hearst Magazines Expands GlossyBox Partnership
Hearst Magazines has expanded its relationship with GlossyBox, an international beauty subscription service, across many of its titles. Last year, the service partnered with Harper’s Bazaar and O, The Oprah Magazine. GlossyBox’s latest partnership is with CosmoBody, a digital subscription fitness channel produced by Hearst’s Entertainment & Syndication division. CosmoBody, which launched in July, is part of the Cosmopolitan brand umbrella, which allows the fitness channel to market its service across those brand platforms. That’s the crux of CosmoBody’s deal with GlossyBox. The deal, which runs in May, gives GlossyBox subscribers a box of products chosen by CosmoBody trainers, in addition to a monthlong trial with CosmoBody and a 40%discount to join CosmoBody. It costs $9.95 a month to join CosmoBody, which, according to sources, is struggling to grow its membership. Hearst declined to provide figures on the channel’s current membership. CosmoBody will be dropping a one-time email to Cosmopolitan and CosmoBody email opt-in subscribers announcing the partnership with GlossyBox. Products from the box--such as a facemask from GlamGlow, a gel cleanser from Clearista and a hairstyling spray from Sebastian Professional--will be publicized on social media as well as in CosmoBody videos, both subscriber videos and their free videos found on YouTube. CosmoBody hopes to shore up more members for its part as well as potentially secure new advertisers. A spokeswoman from GlossyBox told WWD that the partnership does not include an exchange of money; it’s cross-promotional.

Why People Is Platform-Agnostic
The People magazine brand represents 18 per cent of Time Inc.’s total revenue. The print edition sells slightly more than 2.75M copies per month and a mere two months after Will Lee took over as editor in October last year, the People website started breaking record after record. By November, 72M monthly unique visitors logged onto the site--a 26% increase in only two months. Online growth has been relentless with mobile browser growth year-on-year from January 2014 to 2015 rising by 147% and video streams from the site over the same period increasing by 259%. FIPP's article provides more detail from Lee on the brand's use of online, video, mobile, social and print. About print: "Despite the growing appetite for People content across various platforms, there is no talk of abandoning print. In fact, Lee describes the print edition as the 'corner stone' on which the rapid growth of the brand across all platforms is being built. “The history of this brand is very much built on the fact that People magazine has been a cultural phenomenon and still is and then always will be. It (the print magazine) is incredibly important to the brand and as we build all the other things it is really inspired by, and in many cases driven by, print.”

4As Survey: Consumers' Perception of Marketing Integrity at All-Time Low
A new survey done by Ipsos OTX for the 4As (a random, representative sample of Americans online) outlines Americans' attitudes toward advertising; how much they trust the news media; and their attitudes on sex in advertising. (The survey did not specifically ask about agencies, which create the advertising the survey says is not trusted.) Only 4% of Americans think the marketing industry behaves with integrity. Nearly half (48%) of consumers surveyed say they don't trust any news source. Of the remainder, a third said that they trust content from an experienced journalist or established news source. Only 4% said that brand-sponsored content that looks like it's editorial content was a trusted news source."Consumers are getting more astute about the news media and advertising," said 4As CMO Alison Fahey. "But we found that only a small percentage of consumers trust advertisers and the media...Americans believe that integrity is at a low and that people are lying to them." Asked who acts with integrity, virtually no respondents said that the ad industry does. It was ranked at the bottom of the list of other industries, including financial institutions (9% say it acts with integrity), the legal profession (9%), the pharmaceutical industry (9%), the newspaper industry (10%), cable news (6%), tech companies (6%), pro sports (6%) and Congress (6%). Only "you yourself" and the medical profession got higher percentages: 74% and 30%, respectively. Asked "Why do media people lie?" (which would seem to be a biased or loaded question), 69% said to "sell" more effectively; 62% said they want to look good; and 38% said they've been told to lie (e.g., by their advertisers); and 32% said they want to avoid trouble for their careers. Fahey said that in general consumers are looking to more than one news source for information, because they don't trust one source. And despite the widespread use of social media and other online outlets, 64% of respondents cited their TV screen as a frequently visited news source; 37% of respondents cited an online-only news site as a frequently visited source. When asked a write-in question about who the most accurate and truthful news source was, the top tiers of trusted news sources were all TV properties. Asked about advertising, respondents said that when gratuitous sex was used they questioned the quality of the product and the creative abilities of the marketer.
Ad Age 

DC Debuts Line of Super Hero Graphic Novels, Merchandise for Girls
DC Comics and its parent company Warner Bros. has announced plans to launch DC Super Hero Girls, a multifaceted line of content and merchandise targeting girls and based on DC’s iconic super heroes. A licensing partnership between DC/Warner Bros, Mattel, Random House and Lego, the DC Super Hero Girls line will launch with an interactive digital product in fall 2015, followed by a wide variety of print and digital content, TV shows, toys and other products aimed at girls aged 6-12. The DC Super Hero Girls universe will be based on the female super heroines of the DC Comics Universe—Wonder Woman, Supergirl, Katana, Poison Ivy, Harley Quinn, Bumble Bee and Batgirl—depicted as multi-ethnic teenagers in their formative years prior to full development as superpowered adults. Each of the characters will have her own storyline about mastering her power and growing up. The new line also brings together a variety of DC Comics licensees in different product areas. Random House Books for Young Readers has been named master publishing partner and will produce a line of books, including original graphic novels, slated for spring 2016. Mattel, DC’s master toy licensee, will produce action figures for girls, and work with Warner Bros. Animation to produce interactive digital content. Toy manufacturer Lego will collaborate with DC on creating building sets designed specifically for girls.

BAM Launches Self-Publishing Site
Books-A-Million has launched a website for independent authors, called BAM! Publishing DIY, which will allow them to create, edit and publish their own work. Tools include cover and interior design, conversion to print and e-book formats, and distribution on Amazon, Barnes & Noble, iBooks, and Ingram. Authors will be able to pick up print books in person at the retailer's two store locations which have Espresso Book Machines: in South Portland, Maine, and Birmingham, Ala. Publication packages begin at $59. The widest distribution in print and digital (which adds the book permanently to, the BAM! Publishing DIY Marketplace, and to the EBM database, and distribution through the Ingram Digital Network for three years) runs $329. This package also includes sale on major retail sites.


Retail News

Weis Sets Cap-Ex Spending at $92M
Weis Markets said Thursday it plans to invest $92M in capital spending this year to grow and upgrade its store base, information technology systems and supply chain. Speaking to shareholders at the chain’s annual meeting, Jonathan H. Weis, chairman of the Sunbury Pa.-based company, said there are 12 store projects underway and another 23 in the active planning stages, plus a major upgrade to its distribution center. During 2014 the company opened two new stores and three gas stations and completed 16 remodels, Weis said. He did not say how many projects would be completed this year. He said the company has begun work on a major expansion of its distribution center, "which will allow us to improve efficiencies and increase our fresh department variety. "We have also have steadily upgraded our supply chain in recent years, which has helped us drive costs out of the system while maintaining in-stock conditions.” In other remarks to shareholders: Weis said the chain has reinforced its price image this year with a lowest-price-guarantee program, which offers a market-low price on four weekly items, along with its longer-term everyday lower price program on nearly 2,000 items. The company has dedicated itself to upgrading the in-store customer experience, Weis said, "[because] we compete against channels of trade that are indifferent to the concept or are online and devoid of any real human connection. We strongly believe in reaching out to customers and looking for ways to serve them to help us build long-term relationships that benefit our business." He said the company plans to increase its curbside pickup service to 31 locations by summer, compared with 26 to date, noting that online shopping “helps us replicate the in-store experience in terms of quality and service. Online shopping has enormous potential in the years ahead." Weis operates 163 stores in Pennsylvania, Maryland, New Jersey, New York and West Virginia.

Ahold to Open Fresh Format in Boston
Ahold USA, which quietly opened an urban fresh format recently in Philadelphia, is doing the same in Boston, SNhas learned. A division of Ahold known as Fresh Formats LLC is advertising for employees for a new small-format fresh food store to be located in the Boston neighborhood of Allston. Want ads appearing online describe the venture as “a new Fresh Food market that is small in size but BIG on fresh, organic & value.” Ahold used similar language when it sought staff for Everything Fresh, the 3,000-square-foot organic specialty store that opened in December in Philadelphia. That store was developed under a New Formats division founded last summer by Ahold and headed by EVP Bhavdeep Singh. That group also last summer acquired Eastside Marketplace, a successful small-store format operating in Providence, R.I., with the intention of learning from its operations and management. Suzi Robinson, a spokeswoman for Ahold’s Fresh Formats, told SN Thursday that “Fresh Formats LLC is developing a new grocery shopping experience that will be introduced later this year,” but declined to provide further detail. Ads seeking employees around Boston this month were seeking department managers and assistant department managers with experience in catering. Robinson added the company was “focused on learning” from its Everything Fresh format and had no comment on expansion plans. A report Thursday in the Philadelphia Business Journal, citing local real estate sources, said Ahold was planning as many as seven additional Everything Fresh stores in Philadelphia, with some as large as 20,000 square feet.

Ellwood Thompson's Announces Wage Increase
Richmond, Va.-based natural grocer Ellwood Thompson’s said it would raise its minimum wage to $10.10 per hour, effective today. The company said it would not be raising prices of goods to pay for the wage increase. “We want our 130 employees to feel we make an investment in their future at ET, with continuous learning and development,” the company said in a release. “We are particularly proud to say that both of our store managers and two-thirds of our department managers and assistant department managers started with ET as hourly employees and were nurtured to the positions they have now."

Amazon's Q1: Sales +15%; Net Loss of $57M
Sales at Amazon rose 15% in the quarter ended March 31 vs. Q1 2014, hitting $22. But higher expenses led to a net loss of $57M, vs. net income of $108M in last year’s first quarter. For the first time, Amazon broke out sales for Amazon Web Services, its cloud computing unit. The segment had revenue of $1.B in the quarter, up from $1B last year. In North America, media sales rose 5%, to $2.97B in the quarter, and electronics and other general merchandise (egm) sales increased 31%. In its traditional operating segments, the effects of foreign exchange had a negative impact. International sales fell 2% on a reported basis but rose 14% excluding the impact of foreign exchange. Within its operating segments, international media sales fell 12% (up 2% excluding foreign exchange) and the egm category had a 4% sales increase or 21% excluding foreign exchange.

Instacart to Disclose Markups
Instacart announced changes to its online storefront. For the first time, its app and website will display the price difference, if any, on products sold both on Instacart and in the physical store where Instacart personal shoppers go to fulfill orders.

Costco to Pay Zero Acceptance Costs in Deal with Visa, Citigroup
In a deal with Visa Inc. and Citigroup Inc., Costco’s acceptance costs will be about zero, according to people familiar with the arrangement. That compares with the roughly 0.6% of each transaction the retailer pays its current partner, American Express Co. While Costco will still incur small fees on Visa cards issued by other banks, incentives from Citigroup and Visa will offset them, the people said. The arrangement shows the pressure that Costco, the biggest U.S. retailer that accepts just one brand of card, was able to exert on financial firms seeking one of the industry’s most coveted partnerships. AmEx has said Citigroup and Visa won because it wouldn’t agree to the conditions and risks needed to continue its exclusive 16-year relationship with Costco, which is now set to end in March.


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