Time Inc reported its 2017 second quarter results and as expected its a doozy. The decline in some areas continue to get bigger at the media company as it works to transform itself into a digital first player. That process still has ways to go as print related Circulation revenue still makes up 30% of the company’s total revenues. Advertising is down 12% across the board and newsstand continues to die with a 22% drop. Digital advertising saw a small slide of 2% and Subscription revenue is down 8%. As for other revenues which includes marketing and other support services, this is actually up 6% a bright spot for the company. CEO Rich Battista remains optimistic about what is being dubbed the Strategic Transformation Program which calls for the Reinvestment in Core Growth Areas Including Native and Branded Content, Video, Data & Targeting, Paid Products & Services and Brand Extensions. The program is also designed to save the company $500 million – $600 million over the next three to four years.
On our last earnings call, we outlined aggressive actions—building on what we had accomplished to date—to reduce costs, expand margins, rationalize our portfolio and extend our brands into new growth revenue streams. We’ve been moving with speed and, most significantly, we are announcing today, a strategic transformation program based on a thorough review of Time Inc.’s business. Through this review, we have greater confidence in our path to accelerate the optimization of costs and revenue growth drivers. We have already targeted more than $400 million of run-rate cost savings, with the majority of initiatives expected to be implemented over the course of the next 18 months. We plan to use a portion of these savings to invest in our future in key growth areas including native and branded content, video, data and targeting, paid products and services, and brand extensions. With this program, we expect to realize significant cost savings and reinvest in our future, and we see a path to a minimum range of $500 million to $600 million of Adjusted OIBDA within the next three to four years.
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