Bringing down the house of Reiman…one “ripple” at a time (take 2)

August 26, 2007

Few days ago I posted a blog on the many changes taking place at what used to be called Reiman Publications. My friend Bob Sacks distributed my blog on his e-newsletter and yesterday he published the following responses to the blog:

I think you and Samir are just not in tune with the understanding corporations have of successful business:

1) No leadership in Greendale, home of Reiman Publications . . . Well, they were taking over. And everyone at the formerly Reiman publisher knows that corporations only invest to increase the value of their holdings. Therefore, there must be a lot of value in owning Reiman. Does that value go away because the orders come from New York? Of course not. And by getting rid of the president, they actually increase the value per employee, meaning that the workers must be even more secure in their positions.

2) The end of the “No Advertising” model. . . . If no ads is good, then more ads will be better. After all, people are buying the magazines anyway, so might as well make advertisers happy. And maybe $6 million in subscriptions goes away, but multiple that $60,000 by 12 months – that’s $720,000! Just in the first year! It will only take them 8 years to make up the difference. And if they can sell four times that amount of ads every single issue, then they break even in two years! It’s the Greendale Granfalloon! (Here’s the definition – http://en.wikipedia.org/wiki/Granfalloon – of a granfalloon, which was a marketing concept from Kurt Vonnegut.)

3) Readers are no longer the number one customer: . . .. Did you ever talk to one? . Did you ever talk to one? I didn’t think so – me neither. Telling readers what to think is what editors are for. Or is it publishers? In any case, it’s younger editors .. . or publishers . . . and so they need to talk to a younger set of readers. But that’s ok; the readers will go away but they’ll have the advertisers.

4) There is no number 4. Well, there was, but it got laid off along with the people who used to think that they knew what they were doing just because they made profits year after year. Profits! Hah! I’d like to know just how much red ink their revenues could have brought them. Hey, maybe we can get a deal from one of the advertisers!

(Submitted by a writer)

Re: BoSacks Speaks Out: Bringing Down the House of Reiman

Great article! Barb Newton worked with me at Rodale for almost 20 years and without exaggeration is one of the smartest publishing executives around. Her direct marketing, circulation and management skills are surpassed only by her editorial instincts.

When Ripplewood eliminated her job, they eliminated the one strong leader who could have made the transition work.

(Submitted by a Publisher)

Re: BoSacks Speaks Out: Bringing Down the House of Reiman

So the experts at RDA say that branding is important and Reiman is not known, but their titles are. My goodness RDA has undersold and under-estimated the brand of Reader Digest and the other valuable titles they have purchased over the years. What makes them so knowledgeable now?

(Submitted by a Printer)

Re: BoSacks Speaks Out: Bringing Down the House of Reiman

Samir has got it right. But (and it’s a big BUT) . . .

Berner’s charge from Ripplewood is to pump up the numbers and flip RDA in three to five years (give or take). The quickest way to do that, in addition to cutting overhead to the bone, is to abandon the Reiman revenue model. The new management is on the way to doing both. It won’t be difficult to attract advertisers – virgin properties and all that. And when you’re starting from a zero base it will look pretty impressive quite quickly.

Will the ad pages stick? Will the core reader audience bail out? Will the bottom fall out? As long as it takes more than three years for any of that to happen Ripplewood’s strategy will be perceived as successful and RDA will once again be public with a new management team having to deal with the problems.

So as right as you and Mr. Magazine might be, it’s not relevant in today’s private capital world. Unfortunately.

(Submitted by a Former Publishing Exec)

Re: BoSacks Speaks Out: Bringing Down the House of Reiman

Bo, You and I had a conversation about what might happen at Ripplewood when the first deal went down. You told me that they would destroy the Reiman property in the pursuit

of Wall Street gains. I told you that you were wrong and that the Reiman titles were an excellent base to build upon, and that I would buy you dinner at the restaurant of your choice if things went sour and they started to ad advertising. My question now is where do you want to eat.

(Submitted by a Publisher)

Any or all ideas and comments all welcomed. Keep them coming.

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