Banner
    Discover Magazine sold - print science media valuations plummet
    By Hank Campbell | August 6th 2010 03:43 PM | 8 comments | Print | E-mail | Track Comments
    More Articles
    All Articles
    About Hank

    You've probably heard of Science 2.0® but never heard of me - "Oh, you're that guy" is the comment I get most frequently at a talk or conference...

    View Hank's Profile
    Discover Magazine, both print and online, has been sold to Kalmbach Publishing, which owns publications like Astronomy, Trains and Birder's World.

    Price: $7 million, says MediaWeek, for a company with 700,000 print subscribers and $14 million in annual revenue.   

    That, my friends, is not what we call an accretive acquisition.  It is a bloodbath for everyone else in science media.  Unless they were losing $5 million a month, it means that price is a disaster for anyone in science media that is not membership-funded, like Science or Nature.  If subscribers are 700,000, that is down from the 870,000 it had when Disney sold it to WallerSutton and Sandler Capital Management, with Bob Guccione Jr., the founder of Spin and Gear, as CEO - for an estimated $15 million.  It may also mean the market for print science magazines aimed at educated non-professionals just does not exist any more.

    Chain of ownership:

    Time, Inc. 1980-1987
    Family Media 1987-1991
    Disney 1991-2005
    WallerSutton and Sandler Capital Management, 2005-2010
    Kalmbach Publishing, 2010-

    That's not to say user-generated companies are doing poorly, just editor-driven print ones.    NowPublic.com, with $12 million in investment, sold for $25 million to Examiner.com and AssociatedContent.com went to Yahoo for $100 million.

    SEED Media CEO Adam Bly had been hinting since last year he was selling his magazine and online portals to National Geographic but if a cash-positive magazine with a good brand only sells for $7 million there is no way a company bleeding money is getting anything at all.

    There is a silver lining in all of this, provided by Discover Media CEO Henry Donahue:
    The sale process, says Donahue, consisted mostly of strategic interest and attributes the apparent success of the deal to the digital operations the brand has developed. "It put us in a good position to have an actual sale process in contrast to most of the transactions you've seen out there in the market," he says.
    Yep, the online branding, which had really only ramped up over the last two years when they acquired Phil Plait of Bad Astronomy and Carl Zimmer of The Loom, seemed to be key reasons for getting a deal done. Not a bad result for basically installing Wordpress and recruiting people who were already successful, right?

    Comments

    The sale of Discover doesn't necessarily reflect poorly on science content, but on the owners' inability to transition from print to online journalism. Discover in particular was obviously being held back by old-school print diehards. As for Seed, it never really got off the ground except for ScienceBlogs, which just went through some nasty convulsions of its own due, again, to its owner's misdirected attempt to create corporate-sponsored blogs. Seed will probably disappear by the end of the year.

    Media Gal (not verified) | 08/07/10 | 09:15 AM
    Hank
    There has been some general discrediting of online media by old media and now it has come back to haunt them.   Print magazines like Science and Nature have, in a bad economy, taken to giving away their online impressions if customers buy print ads but everyone says that digital is at least part of the future.

    It also may be that no real market exists.    If there is not a single successful science publication (in the big sense - we are successful but do not have the cost basis of Discover) that is making worthwhile money, it could be that we are similar to a turn-of-the-20th-century company that has a new way of selling buggy whips, not realizing cars are here.   When Forbes was doing an article on successful sites, they called us, but they dropped the story, the journalist later told me, because no writer was making big money ($100K) doing science writing online.

    Or, as you say, it may just be culling the herd.   Radio has been supposedly dying for 50 years but people still make money at it and people still buy advertising, it is simply more niche consumers and extremely large companies who can bring their cost basis down.  So 5 years from now it may be us with 10 or 15 different publications - but they wouldn't all be in science.   Kalmbach has magazines like Bead&Button so they recognize that niche communities are where the money is at - like I write above, the market for a general science magazine may be kaput.

    Hank Campbell | 08/07/10 | 09:31 AM
    SynapticNulship
    I would guess that more than 700000 people read that magazine, however, since most book stores have coffee shops where you can read magazines and books without buying them.  They need to figure out how to leverage that readership.  Somehow popular trade magazines like EDN are able to give the magazines out for free--I assume making revenue with the advertisements.
    Samuel Kenyon | 08/07/10 | 14:40 PM
    Hank
    Perhaps they always did read more than official subscription rates - doctor's offices, people pass them around, etc and that is sort of built in to unofficial numbers.    But a drop of 20% in official subscriptions in 5 years is telling.  Magazines like Pop Sci still have good retention rates but Scientific American does not, as their layoffs showed.   Distribution for magazines on newsstands has become an unwieldy cost so it is likely necessary to keep subscribers rather than count on a lot of new ones - or, as I said, be a niche imprint that will have a devoted base and find magazines on it.  

    Kalmbach has 5 magazines devoted just to trains - a zealous readership if there ever was one - and 2 on beads(!).    Discover will be the largest magazine they have by far and it will be interesting to see what they do with it.   I would bet there will be less Bob Guccione style humor and UFO stuff and more hard science to try and appeal to a readership that doesn't want to read Nature but isn't already reading Scientific American.
    Hank Campbell | 08/07/10 | 15:11 PM
    I was disappointed in the change of content in the magazine when it was bought from Disney. I did not like the style of the staff writers or the slant of many of the articles. They stopped sampling from as many different fields as they did under Disney. I am not surprised the readership went down; I stopped reading it a long time ago. I am very excited about the change in leadership at the magazine and am hopeful that they will get out of the realm of politics and back into real science. I am also hopeful they will develop an app for the IPad and the new portable devices coming in the near future.

    Off of Discover, I am not that surprised that other magazines and newspapers have lost readership. When the New York Times and Newsweek finally figure out that that they are alienating readers with their obvious political slant, they may notice their readership begin to increase again. Most people in this country are situated somewhere in the middle of the political bandwidth, and many of these shrinking news organizations (including such magazines as Discover) do not appeal to those of us in the middle anymore. They have ceased to be serious news reporters and have become part of the machine.

    God Bless from Middle America!

    Anonymous (not verified) | 08/22/10 | 22:02 PM
    Hank
    Hard to argue with any of your points because the market has clearly spoken.  I have written articles on when and how science journalists stopped 'asking the awkward questions' we expect of journalists and started being either cheerleaders for science or, worse, shills for a political-cultural cause.

    We try to stay pretty balanced here, at least as a culture, but in actual contributors it is not possible.   You haven't lived until you've tried to get a Republican to write for free.   :)    Academics tend to be Democrats because they don't care as much about money so the bulk of the outreach in science will be done by progressives; otherwise there would be none.  Given that, I think we do okay staying balanced - people are people and everyone has their own style here but I think (hope) at least as a site, a community and a network, we are a place where Republicans and religious people can get science without being criticized by big mouth zealots in some culture war.  We sure as heck may be the only one.
    Hank Campbell | 08/22/10 | 22:13 PM
    "SEED Media CEO Adam Bly had been hinting since last year he was selling his magazine"

    probably not because Seed Magazine is dead - last seen in June of 2009. The fact that no-one noticed it's demise is most telling.

    Anonymous (not verified) | 09/27/10 | 10:33 AM
    Hank
    Yep, it's just been dead before and he always revived it. If anything, I have always been impressed by his ability to raise money in difficult circumstances. Last summer when I first said it was dead, I was the only one saying it and was told it was not, and then they were all hinting National Geographic was going to buy it (and I wondered why). So I assume he still wants to sell it, but 2010 is a tough year to try. After the election I anticipate a big shift in mentality economically so perhaps he can get some money for it then.
    Hank Campbell | 09/27/10 | 10:41 AM

    Add a comment

    The content of this field is kept private and will not be shown publicly.
    • Allowed HTML tags: <sup> <sub> <a> <em> <strong> <center> <cite><TH><ul> <ol> <li> <dl> <dt> <dd> <img> <br> <p> <blockquote> <strike> <object> <param> <embed> <del> <pre> <b> <i> <table> <tbody> <div> <tr> <td> <h1> <h2> <h3> <h4> <h5> <h6> <hr> <iframe><u><font>
    • Web page addresses and e-mail addresses turn into links automatically.
    CAPTCHA
    If you register, you will never be bothered to prove you are human again. And you get a real editor toolbar to use instead of this HTML thing that wards off spam bots.