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June 23, 2017

Publishing News

Meredith, Hearst Said Eyeing Rodale Titles
NY Post: "Meredith, the company that balked at paying $1.8B or more for Time Inc., has declared that it’s in the hunt for the Rodale titles, which will go for considerably less. One industry executive said he thought it would be a “dogfight between Hearst and Meredith.” Estimates on a potential price tag varied from $150M to $300M--although nobody has yet had a chance to review the books being prepared by Allen & Co. They’re expected to be available in about two weeks. Revenue at Rodale last year slumped below $300M, sources said. Banks have been putting pressure on the family-dominated board to reduce costs as its revenue stream dried up. The company that publishes Men’s Health, Prevention, Women’s Health, Runner’s World and Bicycling put itself into play on Wednesday with an announcement from CEO Maria Rodale that the company was set to 'explore potential strategic alternatives.' American Media Inc. CEO David Pecker told the New York Times he is very interested in Men’s Health. On Thursday, he said he was buying Men’s Journal from Wenner Media."

Dance Mag Offers 90th Anniversary Special Issue
Adweek: "For a special 90th anniversary July issue, featuring tap dancer Michelle Dorrance on the cover, the magazine has compiled a list of “The Most Influential People in Dance Today.” There are 34 honorees in all, with the call put out to readers to nominate anyone who may have been missed... Dance magazine began in June 1927 as The American Dancer. Or, just a month after Irving Berlin wrote 'Putting on the Ritz.' That song holds the honor of being the first, on film, performed by an interracial ensemble..."

Journalist and Folk Singer Team on New Print Mag
Adweek: The Hollywood Reporter assignment editor Erik Hayden and alternative folk singer-songwriter Sara Noelle are launching a biannual print magazine devoted to lyrics, called Lyrics as Poetry. "The idea is to offer a far-distant oasis from the cluttered layout of song-lyric pages on the web, as well as afford lyrics the equivalent of a proper gallery-viewing space for paintings. It works. The theme of the starkly laid out debut issue is 'space,' and it's devoted to 42 full transcriptions of song lyrics, strategically placed black and white nature photos and 10 short essays about additional individual songs, contributed by journalists such as Ken Layne and music-world folks like Pamela Des Barres..."

Philanthropic Digital Fashion Mag, Mission, Ready to Launch
WWD: "Three years in the making and a mere three months in production, Mission, the first digitally interactive philanthropic fashion magazine, is all systems go. Officially known as Mission (For Fashion, For Beauty, For Good), the biannual pub focuses on a different charity and cause each time. True to the first edition’s Women’s Empowerment theme, founder Karina Givargisoff built the 439-page inaugural issue and media brand from the ground up. Mission, a nonprofit, will donate $1 from each purchase of the $6 magazine to a designated charity approved by Mission’s board. First up is the Lower East Side Girls Club..."

Apple News Gives Publishers (A Bit) More Demographic Data
MediaPost: "This week, Apple revealed that it will begin making information about the genders and ages of readers available to publishers, at both the channel and article level, via its News Publisher Analytics dashboard. The data is accessible via a new “Apple News Format Demographic Metrics” feature on the dashboard. While data on users’ gender and age may seem fairly modest by the standards of the Internet--where individuals are thoroughly mapped by cookies and their own social media profiles--it is more generous by the standards of Apple, which previously only shared the number of views and visitors, as well as metadata showing for example when content was viewed..."

Reuters Digital News Report: Paid Subs a Bright Spot
Adweek: "The Reuters Digital News Report for 2017 reifies some of the trends good and bad cropping up in various organizations’ earnings reports and elsewhere, offering glimpses of what to try next, where to double down and what to avoid... “The future of news in the US may ultimately depend on whether the post-election surge in willingness to pay proves fleeting or a harbinger of a broad-based cultural change in public support for quality journalism,” writes Benjamin Toff, a research fellow for the Reuters Institute for the Study of Journalism. For this year, at least, it’s a trend on the rise. Sixteen percent of Americans surveyed in the report said they pay for online news...a seven-point jump from last year, made possible in significant part to young people paying for news. Popular platforms/devices include smartphones (also being accessed in more places) and mobile news aggregators. Apple News and Snapchat Discover [made] dramatic audience gains [and] digital assistants like Amazon Echo are topping smart watches as a way to get news. [And there's] continuing growth in newsletters. At 23%, the U.S. ranks third when it comes to people getting their news from email... Just 38% of participants said they trust the news in general (up five points vs. the previous year), and asked about trust in the sources they personally use, that figure increased to 53%..."

The Nation Launches E-Newsletter Aggregating Activism Opps
MediaPost: The Nation is launching “Take Action Now,” a weekly online email initiative that will be released every Tuesday. It will be published later online so readers can share it on social media and other platforms. The newsletter curates activism and organizing events and actions around the U.S., described by The Nation as a tool “for readers looking to get involved but unsure of where to start.”

The Economist Offers Inside Look at Its Edit Via Blog on Medium
Nieman Lab: "In December, [The Economist's] social media team launched Inside The Economist, a Medium blog created to offer readers a behind-the-scenes look at its writing, reporting and production processes... Denise Law, The Economist’s community editor, said Medium is home to the kind of “globally curious audience” that The Economist wants to target... The "Inside" blog is just one part of the Economist’s Medium strategy, which has evolved significantly since it started to experiment with the platform in 2015.."

Canadian Heritage Committee Recommends 20 Media Support Measures
Magazines Canada: "On June 15, the Parliamentary Standing Committee on Canadian Heritage released its long-awaited report emanating from its study on the media and local communities. Entitled Disruption: Change and Churning in Canada’s Media Landscape, the 100-page report is the outcome of a study that began over 15 months ago...was organized around two central themes: the media as a reflection of Canada’s cultural diversity and the media as a pillar of Canadian democracy. The report discusses Canadians’ access to local information media, including digital and print media and magazines, as well as the broadcasting and radio sectors; current policies, programs and regulations; the impact of media concentration; journalism in the new world; and the impact of digital media. It makes 20 recommendations, including: Creating an indigenous journalism initiative; improving affordable broadband Internet access for Canadians; amending the Income Tax Act to allow for the deduction of digital advertising costs on Canadian-owned platforms; ensuring that foreign news aggregators that publish Canadian news and sell advertising directed at Canadians are subject to the same tax obligations as Canadian providers; recommending that the CBC/Radio-Canada eliminate advertising from its digital news platforms; and introducing a new section in the Competition Act to deal specifically with news media mergers (which would require a panel of experts in media to do a “diversity of voices” test to ensure there is no dominance in any media market). The report is part of the Dept. of Canadian Heritage’s review of federal policies and programs in support of Canadian culture. Its new policies and framework are expected in September."


Retail News

Kroger Board OK's $1B Buyback, Ups Dividend; PL Expansion Planned
SN: "In an address at Kroger Co.’s annual meeting in Cincinnati Thursday, Chairman and CEO Rodney McMullen emphasized the company’s newly stated mission, 'Feed the Human Spirit,' which he said highlighted efforts to serve shoppers on their terms in a fast-changing landscape... We have the human connection of physical assets and the expertise to win with customers in our stores, and we’ve been building our digital capability to serve customers--anytime, anything, anywhere.” The board of directors authorized the company to repurchase up to $1B in its stock, replacing a prior authorization that had been exhausted. The board also approved an annual dividend increase from 48 cents to 50 cents per year. A shareholder proposal for Kroger to name an independent chairman fell short of approval but gained 36% of the vote..." PG: Kroger also announced plans to expand its lines of exclusive products, which currently comprise 30,000-plus SKUs, following news that its private brands posted a record 8.2B units sold in 2016. This 'equates to customers choosing to add 1.25M of our exclusive products to their shopping carts every hour that our stores are open,' said Gil Phipps, Kroger's VP of Our Brands.

CEO Won't Address Rumor That Kroger Might Bid for Whole Foods
MNB cites a Cincinnati Enquirer piece reporting that "Kroger CEO Rodney McMullen, speaking at the company's annual shareholder meeting this week, would not address the possibility that Kroger could make a competitive bid to acquire Whole Foods as a way of stopping Amazon from completing its proposed $13.7B purchase of the organic food retailer. 'I won't get into that,' McMullen told the Enquirer... During the meeting, McMullen expressed optimism about Kroger's ability to compete with Amazon, despite the fact that the company's shares are down 25% in the wake of the Amazon-Whole Foods news. The Enquirer writes, 'Kroger typically avoids fixer-upper acquisitions; it tries to buy competitors that excel in areas where the company wants to improve... Kroger acquired Roundy's in 2015 in part because of its impressive Mariano's urban store format. A key reason Kroger acquired Harris Teeter in 2014 was for its [click and collect] technology, which was the template for Kroger's now nearly 700 stores with ClickList. 'Kroger could afford to buy Whole Foods, which is not mired in debt, but it would have to pay a significantly higher multiple than it has for recent acquisitions. Amazon is already paying a nearly 50% premium for Whole Foods compared to the multiple Kroger paid for both Roundy's and Harris Teeter'"...

Marsh Sales Approved; Remaining Stores to Close
Supermarket News: "Judge Brendan Shannon of the U.S. Bankruptcy Court in Delaware this week approved Fresh Encounter’s bid for 15 locations of Marsh Supermarkets. The sale, which will provide the Findlay, Ohio-based operator with store leases and their respective inventory, went for $7.8M. A $16M offer from an affiliate of Kroger Co. for 11 Marsh stores, excluding their inventory, was approved last week. Marsh in the meantime said 18 stores that were not sold at auction would close July 20. Liquidation sales at those stores--as well as the 11 sites Kroger acquired, which did not include inventory--began this week..." PG: The Marsh stores newly acquired by Fresh Encounter will be rebannered on a regional basis in the near future. The combined companies will now operate 59 stores in Ohio, Kentucky and Indiana, and employ more than 3,600 associates.

Customer-Centric Strategy Is Key to Grocers' Survival, Say Some
Bloomberg: "Walk into a grocery store 10 years from now, and you’ll see more prepared meals, personalized recommendations and perhaps even an in-house restaurant. What you probably won’t see is a random stockpile of food and a long line at the register. Time-consuming trips and a cumbersome checkout process are some of the top challenges that grocery stores aim to tackle in coming years, and the stakes are high. Online delivery services and deep-discount chains are threatening to upend supermarkets’ long-held perch in the food landscape. The push to modernize grocery stores is under even more pressure following Inc.’s agreement to buy Whole Foods ... The deal creates a hybrid retailer--with brick-and-mortar and online offerings--that could serve customers more efficiently than traditional stores. 'Grocers that are customer-centric are going to win,' said Shannon Warner, VP of Capgemini Consulting’s consumer products and retail practice in N.A. That means 'leveraging all of the data they have about the customer to personalize experiences and make them more relevant.' Physical stores aren’t going away--delivering food to customers’ homes remains a costly process, especially for produce and other fresh items--but tomorrow’s brick-and-mortar stores will have to know their customers very well. And the weaker competitors will either fall by the wayside or get scooped up by larger rivals..." [See one analyst's alternate opinion below.]

Analyst Questions Kroger's Strategy
Writing in Seeking Alpha, analyst Kevin Mackie argues that Kroger's Customer 1st strategy [now "Feed the Human Spirit"; see above item] is flawed because it fails to give enough focus to price, which is the most important factor in consumers' choice of grocery stores. "It seems like Kroger management is trying to spend its way into success while their competitors [including Wal-Mart] are cutting costs across the board and passing those savings on to consumers. Kroger thinks that by making considerable investments in technology, team members, targeted promotions and research/analytics they can increase loyalty to their stores by providing an individualized shopping experience for customers. Competitors meanwhile seem to be focused on lowering prices, thinking that is what will drive loyalty to their stores...." he writes in part."Kroger's priority is centered around giving their customers an 'experience' while interacting with their brand. They said it multiple times on their conference call: they want to win peoples loyalty by giving them an experience... I am not convinced Kroger management is truly tuned in to what customers want and need. People don't want a great experience as much as they want to not spend money. The considerable success of Aldi is an indicator as well..."

BI: Wal-Mart Still Rules Grocery
MNB cites a Business Insider article noting that while Amazon is making headlines, "Walmart, along with its Sam's Club division, remains the nation's dominant grocery retailer, owning more than 20% of the market.A study by UBS points out that the market is highly fragmented, "split between dozens of other players, including Kroger (10%), Albertsons (5.2%) and Costco (4.2%)."Those who hope that federal regulators may stop the Amazon-Whole Foods deal on antitrust grounds may be disappointed to learn that 'Whole Foods controls just 1.4% of the market, making it the 13th largest grocery chain in America. Amazon, meanwhile, claims just 0.2% of the grocery market.' Reuters reports that 'while antitrust experts expect Amazon's bid for Whole Foods to win regulatory approval, some critics argue the deal should be blocked because it gives the online retailer a nearly unstoppable head start toward domination of online grocery delivery. They argue the Whole Foods acquisition will give Amazon an unfair advantage over traditional grocers and new players that might emerge in the market, potentially grounds for the deal to be blocked for antitrust reasons.'"

Analyst Speculates Family Dollar on Amazon's Buy Radar
"Amazon's planed buy of Whole Foods has "created a cottage industry in predicting where the retail giant will strike next," writes Benziga. The latest: Loop Capital Markets analyst Anthony Chukumba is asserting that Dollar Tree, Inc. ought to consider "unloading" its underperforming Family Dollar Stores chain on Amazon, or another "big, hungry retailer."


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