- The Washington Times - Tuesday, July 26, 2005

NEW YORK - TV Guide, an iconic magazine for two generations of Americans, is radically remaking itself into a title with a much smaller circulation, a larger, full-color format, fewer listings and more stories about TV shows and stars.

The magazine has struggled to stay relevant in an era when more people look up TV listings online or through on-screen programming guides from their cable and satellite TV providers. TV Guide’s parent company, Gemstar-TV Guide International Inc., is a major provider of those guides and the technology they use.

The revamping, which the company announced yesterday, calls for the magazine to slash the circulation it guarantees advertisers by nearly two-thirds, from 9 million to 3.2 million.

The magazine also will ditch its digest-sized format in favor of a full-size, full-color format with more stories about TV shows than listings. The new magazine will have 75 percent stories and 25 percent listings, the reverse of the current ratio.

TV Guide also said it would cut jobs as part of the revamping, but it declined say how many. The changes will go into effect with the magazine’s Oct. 17 issue.

The revamping is a complete overhaul of the magazine’s business model, one that some advertisers felt was long overdue. Eric Blankfein, senior vice president of 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, and I think this move addresses that concern,” Mr. Blankfein said.

Gemstar Chief Executive Officer Rich Battista said 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.

Mr. Battista acknowledged that the digest-size magazine was losing money, but he declined to say how much. The company does not break out profit figures for TV Guide magazine.

“We didn’t believe in its old form that the digest-size magazine was sustainable,” Mr. Battista said. “Any brand has to evolve in a dynamic marketplace where consumer tastes are changing rapidly.”

On a conference call with investors and analysts, Gemstar Chief Financial Officer Brian Urban said the magazine’s revenue has 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 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 eliminate 3 million copies in “sponsored” sales, such as those distributed in hotels.

In another cost-cutting move, TV Guide will 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 introduced title Inside TV, a celebrity magazine for younger readers, which the company said is not performing as well as expected because of delays in building up distribution.

The news depressed Gemstar’s already weak stock, sending its shares down 35 cents to $3.18 on the Nasdaq Stock Market, toward the lower end of its 52-week range of $2.93 to $6.39.

By focusing more on entertainment and stars, the magazine is entering an extremely competitive arena already dominated by powerful magazines like US Weekly, People and Entertainment Weekly, said. Gary McDaniel, an equity analyst with Standard & Poor’s

Mr. Loughlin said the magazine would 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 company said it expects the new 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.

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