h1

Bringing down the house of Reiman…one “ripple” at a time

August 20, 2007

co_on02.jpgtoh_cover.jpgcwcoverx1.jpg

In the age of mergers and acquisitions, promises are rarely kept and previous owners/founders usually live to see the day that their babies lose their DNA and the original parents end up disowning the products emotionally after they have disowned them financially.

Reader’s Digest Association is a good example. RDA bought Reiman Publications (Country, Taste of Home, etc.) in 2002. (RDA paid $760 million for Reiman Publications; click here to order the book that tells the whole story of the sale, the history of Reiman’s “no ad” approach and more.)

The changes in the company started from that point on, with redesigns and repositioning of several of the titles. That was attempted to force growth, but it didn’t work. Then Ripplewood Holdings bought RDA, taking over in early 2007, and began accelerating the changes even more.

Now, according to sources knowledgeable with what Ripplewood is doing, the process of de-branding of Reiman Publications has started…and started big time.

The Milwaukee Journal Sentinel reported on June 19 that Ripplewood renamed Reiman Publications. It’s now RDA Milwaukee. “Reiman as an entity is going to go away,” company President Barbara Newton told the paper shortly before she lost her job.
According to my sources the RDA release reflected the fact that “Reiman is not a known brand. The brand is in the magazine names.”

So how is Ripplewood changing the Reiman brand? Well let me count the ways:

1. No leadership in Greendale, home of Reiman Publications:
Ripplewood terminated Barb Newton, Reiman Publications president, after deciding they don’t need a President in Greendale anymore, that they can run the whole thing from New York! So they now have nearly 500 people nearly a thousand miles away without a direct “leader”. However, RDA spokesman William Alder told the Journal Sentinel that this change represents “a re-upping of the commitment to work with the folks there (in Greendale).”

2. The end of the “No Advertising” model:
Reiman Publications created one of the most successful magazine publishing models ever–one that was strictly dependent on circulation revenues. When RDA bought it, the company was extremely profitable. It published 13 national titles reaching more than 16 million paid subscribers…without a single advertisement.

Now, Ripplewood has decided to remove that unique aspect; it has started carrying advertising. The first ad brought in $60,000 for the Select Comfort Bed ad that’s included in the current issue of five of the company’s magazines–Country, Birds & Blooms, Backyard Living, Reminisce and Farm & Ranch Living.

One of my sources feels that $60,000 ad will cost the company more than $6 million in renewals. Why? Because the no-ad approach was—more than anything else–the one thing that made the magazines “different”.

It was by far the magazines’ most talked-about element over the years. Now, with the removal of that unique element, this source believes renewals will drop off so fast that what started out as a Ripple will end up being a title wave!

Amazingly, the Ripplewood folks don’t feel the “no advertising” approach is essential to their success. In fact, their reaction to this unique approach of publishing is “utter disbelief that Reiman Publications has had this huge circulation and hasn’t bothered to sell advertising up till now,” a reliable source told me.

3. Readers are no longer the number one customer:
According to my sources, the Reiman Publications’ empire that was built on reader input is now heading toward a complete U-turn. In fact, an internal e-mail from one of the RDA managers last winter stated, “I don’t care what the reader wants…this is what I want!”

That’s not far from reflecting the current feeling at Ripplewood. One of its managers recently stated, “We need to turn over this circulation base anyway; we need to attract a much younger, more vibrant audience.”

In short, “the magazines just haven’t been the same for more than a year. And now with the inclusion of ads, they’re really not going to be the same,” my source said.

Am I surprised? NO. Why not? Well, the top 14 people who were in charge of Reiman Publications are no longer employed at Reader’s Digest Association. So, since most of these top people have been replaced by RDA’s chosen people…didn’t RDA pay all that money to buy themselves?

A final thought, a wise person summed for me this whole process of mergers and acquisitions as follows:

“The bottom line is this: Small companies do things that benefit the customer. Corporations do things that benefit the stockholders. Small companies think long-term. Corporations think short-term, as in quarterly reports. Small companies really get to KNOW their customers to sustain growth. Corporations aren’t much interested in getting to know the customers and concentrate on maintaining growth through what they learned works for other audiences.”

About these ads

8 comments

  1. +++++++++++++++++++++++++++++++++++++++++++++++++++++

    What Reader’s Digest bought in 2002 was a loyal and responsive customer base that resulted in operating margins well above 20%…about three times higher than RD had. Those financial results were made possible by a culture focused on encouraging creative people to develop unique products…strengthened by a customer service mentality that, while sounding corny in today’s jaded environment, was as simple as the Golden Rule.

    What has happened to Reiman Publications in the past five years was predicted by those who knew it took to make the business model work. Reader’s Digest insisted on changing the most basic aspects of that model. When Reiman management explained what would happen to the company’s performance, they were brushed off as being behind the times. They either got frustrated and resigned or were pushed out. And as results declined as predicted, creative and self-serving excuses were invented.

    Here’s another prediction…Because Reiman readers are older and have lower household income than most advertisers demand, the latest move of putting paid advertising in the magazines will accelerate the circulation slide, which already has resulted in the loss of millions of customers. The effects of that accelerated decline likely won’t be obvious for 18-24 months. By then, nobody should be surprised if key segments of Reiman have been sold off.

    It is truly sad to see what happened to a unique, reputable and very profitable company.


  2. Very sad. Reiman was an example of a company that served the Heartland of America on its own terms. So little is being done for this audience, because large media companies on the coasts are oblivious to this group’s unique interests and strengths.

    What you’re reporting about the second wave of new management of Reiman’s publications shows how swiftly a corporate culture can lose touch with what made an independent business successful.

    I feel most sorry for the people who loved Reiman publications and are starved for media that doesn’t talk down to them, doesn’t tell them what they should like, and listens to the gentler American audience that has so much to offer.

    There are huge opportunities for those who want to serve this very large, disdained audience with respect and good-will.


  3. I just read the above comments, and had to add my two cents.

    I live in Milwaukee, and read (but, regretfully, didn’t keep) the article in the JournalSentinal quoting a brave Barbara Newton how things wouldn’t be all that different. Then, the article made a mention about how nice she was, considering HER job would soon be history.

    I, too, noticed the changes in the magazines–also, no mention of the six-horse hitch that used to tour the country. Obviously, too much of an expense. And yes, in a recent issue of Reminisce, ads appeared. Along with a big article about how although Ray Reiman never wanted advertising, it was inevitable, things have changed, prices of everything have gone up, blah, blah, blah.

    Just last night I was at a friend’s house. She had gone to the big Reiman vistor centre in Greendale this summer, and they were giving away the Ray Reiman book “I Could Write a Book”. In it, he lays out what he wanted a buyer to commit to before he would sell his company. One of the things was a 3-year freeze on leaving Greendale, laying off employees, etc. You could just see how much he appreciated his employees, which in this day and age of corporate takeovers is, sad to say, a rarity. Well, I told my friend (without knowing the actual sale date to RD), “Yeah, and at three years and one day…Nellie bar the door and file for unemployment.” Obviously, the reason they were giving the book away was that so much of it was, sadly, no longer true.

    However, she had the latest issue of Reminisce and although I could find no outside advertising in it, there were inserts in the plastic mailing bag that the magazine came in. In the Reiman book, he also mentions about his policy of no advertising. I only skimmed through the book–it was a bit depressing.

    Wonder just how long that Visitor Centre will last. Even though Reiman owns the majority of buildings on Broad Street in Greendale, that doesn’t mean that the Ripplewood/RD people can’t close that Vistior Centre or pull some stunt to make it a shadow of itself. In the JournalSentinel article it spoke of the call centre being relocated to New York, and of the other departments that were closed down piecemeal in the last few years. I also wonder how long the main Reiman Publications “home” office on 60th & Grange will be there before Ripplewood/RD gets an offer they can’t refuse to sell out and just to keep up appearances will rent some 300 s.f. office in a faceless, nameless buiding. Anyone who has been here knows how nice the Reiman Publications property is. Flowers all summer, wonderful lighted decorations in the winter.

    Again, another corporate takeover, another sad day for loyal employees and customers.


  4. good luck getting a refund on your subscription. When I realized a change had been made (unfortunately one week after renewing Light & Tasty) i immediately went to the website and couldn’t get in. They had eliminated my password and customer service is now in the Philippines! The guy didn’t even know how much my refund would be. This is so sad….even more so that we weren’t warned of the company sale. Especially to Reader’s Digest. I NEVER would have renewed and would have canceled my Birds & Blooms on the spot……

    I was planning an outing to the complex in Greendale this summer, guess I’ll have to change my plans…..how could I have not know about this takeover!


  5. Bottom line – Reiman sold out! Sad fact, and anyone who has been around knows that when a big corporate company takes over a small company – that’s it!! Look at American Girl when they sold out to Mattel. They had a great, wholesome product that really got girls interested in history – now they’re phasing out all of the new historical dolls and replacing them. Why do they sell out – that’s what I want to know? Why destroy something that you spent your life building? Something as special as Reminisce and Country and all of the others – does it just boil down to greed?


  6. I, for one, am not renewing my subscription for Birds & Blooms. I have noticed in the past couple years, it has gone downhill in the quality and now I have to deal with 3-page drug company ads to boot. In a magazine that is supposed to be devoted to birding and gardening. I can pick up any old magazine and have to deal with at least 4-5 drug company ads. It’s the whole reason I loved Birds & Blooms – I didn’t have to deal with that. They aren’t getting anymore of my money, that’s for sure.


  7. There have been many changes to Country Magazine and none of them are good. All the ads are a downer–they just spoil the look of the magazine and there’s no way to get around it. Also they have started using cheaper paper. The new paper is not much better than newsprint–it’s no longer glossy and the photos aren’t as sharp. The pictures in the magazine are now merely pretty (no longer magnificent). They even changed the font on the front cover. The original style with the capital “R” looked better. The new style looks more modern, but I prefer the old homey look. I also dislike the big white tabs that label the subjects inside the magazine. The recipe section is no longer convenient; it used to be printed so that you could cut them out and have individual self-contained recipes, each with a photo (like traditional recipe cards).

    I used to love Farm & Ranch Living, but I dropped that one several years ago after I starting noticing changes. I have subscribed to Country, Reminisce, and Birds and Blooms (and have given numerous gift subscriptions) for many years, almost from their beginnings. But I’m not sure how much longer that will continue….


  8. I was one of those who worked for the “good” Reiman publications, (and it’s Roy, not Ray). Roy hired me as creative director in 1986, but I quickly became his right-hand woman as we started Country magazine. Those were the days when what we wanted was a magazine which our readers could enjoy — and also write. It’s very sad to see what has happened since. But, good news, Roy has started “Our Iowa” and “Our Wisconsin” since then, and I believe this is the start of something which will be as big as Reiman Publications once was. The people and products of the golden age are not defeated, just recouping!



Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Follow

Get every new post delivered to your Inbox.

Join 5,532 other followers

%d bloggers like this: