Peter Kafka

Recent Posts by Peter Kafka

IPad Apps Are Fun! But Boring Old Magazines Are Still Big Business For Time Inc.

IPad apps are fun to talk about. They may even be the future of the magazine business! But for now, magazine publishing is still a paper and ink proposition, and that’s not necessarily a terrible thing.

Today’s reminder: Time Inc., the industry’s biggest player, generated more than $900 million in revenue in the last quarter.

Some of that does indeed come from digital, but the vast majority of that revenue still comes from readers who buy magazines and advertisers who pay to reach them. And it can be a profitable business, too: Time Inc. generated operating income of $153 million.

The not-great news in those numbers is that while profits are up 50 percent over the previous year, that’s all because of $50 million worth of layoffs and other cost cuts. So revenue hasn’t really budged. And given the state of the economy a year ago, many media companies are showing big year-over-year increases. So that’s a problem (click image to enlarge).

On parent company Time Warner’s (TWX) earnings call this morning, CFO John Martin said that the flattish ad sales numbers are in part because Time Inc. used to publish more titles a year ago. Adjust for that, and domestic ad sales are up in the “high single digits.” he says. Ad sales will also be up in Q3, when the comps are more challenging, and for all of 2010, he predicts.

So what about the iPad? Well, Condé Nast sold more than 100,000 copies of its Wired launch issue at $4.99, which nets out to $350,000 for the publisher. But Time hasn’t sold anything close to those numbers, or it would be boasting about them too. And even if it had, that wouldn’t mean a lot to a company that does nearly $1 billion a quarter.

Still, Time Warner CEO Jeff Bewkes needed to say something about the iPad, so he did: He said that the apps are great and that “very shortly” the publisher would be offering similar apps for “every tablet.”

Since Apple (AAPL) is the entirety of the tablet market for now, you’ll have to guess about who he had in mind. But presumably Google (GOOG) and Microsoft (MSFT) will make this a bit clearer in the near future.

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There’s a lot of attention and PR around Marissa, but their product lineup just kind of blows.

— Om Malik on Bloomberg TV, talking about Yahoo, the September issue of Vogue Magazine, and our overdependence on Google