liberation liberated, sort of
April 11, 2008
How ... interesting.
San Francisco-based PlanetOut raised $24 million in a private placement last July, and said in January that it had hired Allen & Co. to explore strategic opportunities, including a possible sale. The company reiterated that it is still exploring additional options. "here Networks Co-Founders Stephen P. Jarchow and Paul Colichman have long been admirers and strong supporters of The Advocate and Out, and we believe that our magazines, their associated websites and Alyson books will thrive under here's ownership," said PlanetOut CEO Karen Magee. "Most importantly, we believe that the divestiture of our publishing businesses will enable PlanetOut Inc. to devote all of our attention and resources to our core online businesses, Gay.com and PlanetOut.com."
So apparently that whole "all your gay media are belong to us" model didn't work out so well for PlanetOut.
The gay media conglomerate PlanetOut dropped a bombshell yesterday, announcing that it would sell off its magazine and book publishing business, including marquee titles like the Advocate, Out and Alyson Books, to Here Networks for a pricetag of $6 million. [...] in November 2004, PlanetOut Inc., bought LPI, for $32.1 million (or about $36 million in 2008 dollars).
Just four short years later, with PlanetOut struggling financially, the sales price for LPI is only a fraction of what PlanetOut paid, likely reflecting the difficult economic market for print publications generally, and nationwide magazines in particular. These have been challenging times for the Advocate, published biweekly, and Out, published monthly, when local gay publications publish weekly and the Internet is on a 24-hour news cycle.
Here Networks didn't buy LPI's "adult" Specialty Pubs division, though it's unlikely that was based on content since the pay-TV network shows similar content. Those who know LPI well say that Specialty Pubs was long the profit center for the company, but magazines like Men and Freshmen have suffered from online competition as well. But since the LPI that Planet Out purchases is not the same LPI it sold, it's difficult to say how steep a haircut PlanetOut took on the pricetag....
PlanetOut would not seem to have done well by Liberation, one wya and another. Even allowing that Specialty Publications was making most of Liberation's money and wasn't included in the purchase of LPI, I can't imagine that Specialty was doing so well that it would have made up $30 million in the price difference. (I had heard, though I might be mistaken, that Liberation had already sold Specialty's video division to Channel One Releasing, or that they were considering it; that may have been mistaken information.)
I have to admit, I'm surprised that here Networks is buying LPI, or what remains of it. Buying two national magazines in a bear advertising market would not necessarily seem to be a great decision -- though, if you have the money, I can see wanting to keep Advocate and Out alive for historical reasons -- and Alyson seems to have profoundly lost its way in the past few years. (It may just be that the local stores only buy what people want and that's almost all I get to see, but it seems like most of what Alyson publishes these days is porn, and fiction and nonfiction books have moved in surprisingly large part over to Kensington -- the book publishing arm of journal publisher Haworth -- and other small companies, with a few large publishers also poaching a bit on the territory. That may just be perception and not reality, though.)
Something of a side note, but I'd also love to know how here's move to subscription style pricing, rather than their previous on-demand model, has worked for them. (I freely admit that here's change has annoyed the snot out of me; if I'm going to pay subscription prices as though it were a premium channel like HBO or Showtime, I want it to be a channel, something I can find simply by punching in the number. If it's going to be on the on-demand menu no matter what I do, then I want to pay per-item and on-demand. But I digress.)If nothing else, there may be a bit more synergy between LPI and here. Here might be able to go through the Alyson library for material for shows, for example, or produce co-branded television news magazines for the channel, like CBS News on Logo. (Honestly, as a pure business decision, it would make slightly more sense for Logo and here to merge; there really isn't enough quality product to support both of them. But again, I digress.)
It's going to be interesting to see how this works out for all concerned. For all that PlanetOut is now concentrating on its core websites, with the sale of its travel business and most of its publication arm ... there's not really a lot left of it, is there? And the web has expanded a lot in even the past few years. I can remember making PlanetOut a daily read, once upon a time, and now ... I can't remember the last time I deliberately went to PlanetOut. There are just other places out there that work better for the types of stuff I used to read on their site.
Anyway, here's hoping it works out well for all concerned.Posted by iain at 12:25 AM