24. Advance Publications
Revenues 2012: $ 6.780 billion (€ 5.277 billion)
The privately owned US company Advance Publications, Inc. Includes Condé Nast Publications (Magazines), Parade Publications (Newspaper supplements), Fairchild Publications (Fashion and special interest magazines), American City Business Journals, Golf Digest Companies and newspapers in more than 26 US cities. Furthermore, Advance Publications owns cable networks, websites for the magazines, Religion News Service (RNS) and is also involved in TV stations.
Four Times Square, NY 10036, USA
Segments: Newspapers, Magazines, Cable TV, News Agencies
Form of organization: Private Company
Financial year: 01.01. - 31.12.
Founding year: 1924
Total revenues (in $ Mio., est.)
- Samuel I. "Si" Newhouse Jr., Chairman
- Donald E. Newhouse, President
- Charles H. Townsend, CEO: Condé Nast Publications
- Steven Newhouse, President: Advance.net
- Peter Weinberger, President Advance Internet
Major holders: Donald Edward Newhouse, Samuel Irving Newhouse.
Company founder Samuel I. Newhouse had already been managing a daily newspaper very early on in his career and he acquired his first own newspaper in 1922, the "Staten Island Advance". He owned various local newspapers from New York to Alabama in 1950. In 1959, Newhouse bought newspaper publishers Condé Nast – allegedly as a wedding present for his wife. Newhouse died in 1979 and on top of the company, his sons Si and Donald inherited a fulminate court case with the tax office that was all about the inheritance’s taxation. The legal struggle continued until 1990 but was resolved in the Newhouses’ favour.
As of today, the family owns one of the biggest private fortunes in the world. All media companies of the Newhouse family are subsumed under the name Advance Publications, although the company hardly appears in public under that name. Whereas the public spotlight usually shines on publisher Condé Nast, which relocated from Madison Avenue into their own skyscraper on Times Square in 1999.
Brothers Si and Donald Newhouse manage Advance Publications. In the 1960ies, senior Sam Newhouse left the magazine to his son. Si Newhouse, who had not even finished college by then, was considered inconspicuous. Yet, he was a workaholic. He used to sit at his desk from five in the morning, sometimes earlier. Even nowadays, Newhouse is regarded as publicity-shy, prefers to stay in the background during parties and rarely talks about personal or family matters. However, it is said that his self-confidence benefited from his success as a publisher. Still, a whole bunch of editors in chief and close colleagues only experienced this circumstance on a coincidental basis, if at all. The question of Si Newhouse’s and his brother Donald’s succession has been the matter of debate for quite some time now, despite the fact that Si Newhouse reportedly still interferes in many details. The talk of the town on the other hand is all about nephew Jonathan Newhouse, who fronts the international business division in London and Steven Newhouse, the son of Donald Newhouse. He used to run the Internet activates and has been running magazine off-shot Golf Digest since 2001. Furthermore, he is the editor in chief for the daily newspaper ‘Jersey Journal’, of which he halved the personnel through a threat of closure in 2002. He is credited with improving the journalistic quality of the Newhouse newspaper chain (It even received a Pulitzer Award in 2005).
The Condé Nast-Publisher is not in the habit of publishing business figures. However, according to the New York Times, 2003 was widely considered a record year internally. The editor’s offices were encouraged to save money and urged to manage their own budgets ever since and must justify the release of each single issue. While Condé Nast used to bring in annual losses of 20 Million US-Dollar ten years ago, they managed to haul in a 120 Million US-Dollar profit in 2003, writes the New York Times. Even the New Yorker, which lost 200 Million US-Dollar since its acquisition in 1985 was in the black again. The margins had supposedly been increased under Steve Florio but he ceased to be the ‘public face of the company’ (New York Times) and quit his job as editor in chief of Condé-Nast in February 2004. Charles Townsend replaced him. Apparently, the reason was tension between Florio and Si Newhouse, who was reputedly fed up with Florio’s frequent absences. While Florio was considered a marketing expert, Townsend was regarded a force of administration. Observers tend to interpret the strategy as a measure to strengthen ad sales and the administrative level in time for the media crisis. Townsend announced that he intended to bring Condé-Nast closer to Time Inc., the current market leader in the magazine publishing sector. So far, Advance Publications Inc. is but number two.
Advance Publications, Inc. owns Condé Nast Publications (Magazines) Parade Publications (Newspaper supplements), Fairchild Publications (Fashion and special interest magazines), American City Business Journals, Golf Digest Companies and newspapers in more than 26 US cities. Furthermore, Advance Publications owns cable networks, websites for the magazines, Religion News Service (RNS) and is involved in TV stations too.
Magazines and newspapers: All magazines that are now well known all over the world had initially been nothing but a training field for Si Newhouse. His father was primarily interested in newspapers. His primary goal was the acquisition of the New York Times. Sam Newhouse created quantity instead of quality; his newspapers constitute one of the largest chains in America. The newspapers became cash cows and the profit dictated the editorial guidelines. As of today, the print products and especially special interest magazines are being produced with one eye on the advertising clients. In an anticipatory move in 1994, Newhouse invested in a magazine called Wired that was not very well known back then. The magazine deals with current trends, especially in the digital media sector and swiftly became the most important reference medium in the online business. When book publisher Random House was sold to Bertelsmann for 1 billion $ in 1998, Condé Nast could take over a bunch of fashion magazines in 1999 for 1.1 $, including Jane, W, Women's Wear Daily as well as Supermarket News. In 2001, Advance Golf Digest was bought for 375 Million $.
In terms of magazines, Advanced acquired the top products in high gloss magazines in 2001 with The New Yorker, Vanity Fair, GQ and Vogue. In 2001, the publisher brought Lucky to the shops, a magazine featuring nothing but shopping tips, the ideal advertising platform. Due to the weakened advertising economy in 2001, Newhouse decided to cancel women’s magazine ‘Mademoiselle’ after 66 years in the business due to high losses, despite 850.000 subscriptions. In 2002, Advance began to relocate 250 to 500 jobs in accounting, technology and IT to Wilmington, Delaware. The headquarters and editor offices remained in New York.
Internet: May 1995 saw the launch of the Condé Net online division, which utilises material from all Condé Nast magazines, but does not simply duplicate any of the magazines for the World Wide Web. The websites deal with topics such as food (Epicurious.com), sex and romance (Swoon.com), health (Phys.com), fashion (Style.com) und finance (CNCurrency.com).
Cable networks: The Newhouse family owns shares of cable networks in several states through Advance/Newhouse Communications Inc., in Syracuse in the state of New York, in California in Florida, in Alabama, in Atlanta (Georgia) and in the North of New Jersey with a total of 2.1 million connected households.
Television: The Company is also involved in Discovery Communications Inc. through Advance/Newhouse Communications Inc (together with other companies). Discovery Communications Inc. holds a 100 % share of Discovery Germany LL.C, which operates TV stations Animal Planet, Discovery Channel, Discovery Geschichte and Discovery HD in Germany.
By its own account, Discovery reaches 1.2 billion customers with documentary and special interest channels worldwide. Advance is involved in Discovery Channel with 24,6%, Discovery History with 24,6 % and Animal Planet with 24,6 %. Advance also holds shares of Health Channel, Travel Channel and Discovery Kids.
Jonathan Newhouse is managing the international titles from London. The most widely distributed titles are Vogue (15 titles) and GQ, which are now being released in Japan, Taiwan, South Africa and Russia too (among others). Vogue, GQ, Architectural Digest and Glamour are being released in Germany. Although former Germany CEO Bernd Runge (45, who has since been replaced by Moritz von Laffert) announced to expand the Vogue series (for kids, for bridal wear, for young people etc.) as well as release new titles in the fields of sport, computers or economy on the market, he did not get anywhere so far. However, Runge seemed to have kicked off a trend with the small A5 format (Vogue Business, Glamour). Thanks to competitive pricing and smaller printing cost, the format proved to be profitable. In 2004, the German Vogue celebrated its 25th year of existence and released a ‘catalogue’ issue, featuring 638 pages. The eleventh international issue of women’s magazine Glamour launched in Russia in September 2004.
By now, Condé Nast is publishing shopping magazine Lucky in Germany as well. Furthermore, the publisher brought women’s magazine MySelf to the German market in 2006, which is planned to be released in more European countries at the same time.
The former Condé Nast CEO for Germany, Runge, came under pressure in summer 2004 when his involvement in the former Eastern German secret service (STASI) became known to the public. Condé Nast stuck with the economically successful manager. Runge planned to centralise the German offices, which are still scattered all over Munich, in the Maxvorstadt, Munich by April 2007.
In February 2006, US Media Company Discovery Communications took over 98 % of the shares of German free-TV station XXP. Discovery Communications owns four shareholders: Discovery Holding Company (NASDAQ: DISCA, DISCB), Cox Communications Inc., Advance/Newhouse Communications and John S. Hendricks, the founder and chairman of the company.
One percent of the XXP shares remains with the former shareholders respectively, DCTP (Development Company for Television Program) and Spiegel-TV. The buying price is estimated at 40 to 50 Million Euros. This was the first step onto the international free-TV market for Discovery Channel.
Discovery Networks Deutschland, the German business branch of the worldwide leading non-fiction media and entertainment company Discovery Communications, started TV channel DMAX in September 2006, which followed TV station XXP. A factual entertainment channel, DMAX is tailored towards the lifestyle and interests of male viewers between 20 and 49 years of age. As early as 2006, the company made comprehensive investments in the station in order to increase its range, attractiveness and scope of service. The result has been a ratings increase since the takeover: The market share within the segment of 14-19 years olds increased from 0.2 % to 0.5 % in May 2006.
In February 2007, the second foreign version of the smash-hit title Vanity Fair started in Germany. The successful Italian issue of Vanity Fair, which is being released since 2003, does not have much in common with the US high-gloss magazine that is distinguished by long and well-researched articles – at least, not anymore. The Italian magazine is colourful, filled with short stories and pictures, primarily about A and B-List celebrities.
Ulf Poschardt headed the German issue as editor in chief, which constituted the biggest ever investment by Condé Nast outside of the United States with approximately 50 million Euros. Ulf Poschardt voluntarily departed in January 2008. The magazine offered a mixture of content from the mother magazine and articles by the editorial office based in Berlin. In terms of style, it was attempted to operate closer to the US paragon. Other than the US-Vanity Fair, the German version was released every week and it was being sold for a dumping price of 1 or 2 Euro(s). Following decreasing numbers in sales and a diminishing circulation (203.000 towards the end), the German issue of ‘Vanity Fair’ was cancelled in late February 2009.
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