POUND OF FLESH DEPARTMENT:: Time Inc to collect payments from AOL for exclusive use of content
Ad Age ran a story yesterday outlining how AOL has agreed to pay what is estimated at $40MM a year to Time Interactive, to be disbursed to the magazine brands now carried exclusively on AOL.
Three things about the story caught my attention:
–There are no quote from any AOL executives. Another demonstration of the complete powershift over the past 10 months.
–There are numerous quotes from Time Interactive executives, many of whom have been working on the Time Interactive side for many years, but who have not gotten much attention in press releases or from media. Suggests Squires, head of Time Interactive, is demonstrating he has a real team there–one he has confidence in.
–Time Inc is basically asking AOL for its money up front. This suggests they may not be not confident in the ability of the interactive marketing group to sell eough advertising to make the margins Time Interactive wants to have and it’s cleaner to have AOL pay up front, accounting the money as a licensing and content cost.
Given that Interactive editor-in-chief Ned Desmond is quoted as saying that the fee “covers a significant share of our expenditures online for those 14 titles,” another way to look at it is that Time demanded AOL provide this payment so they could both cover their online expenditures and be guaranteed a certain revenue right upfront.
Interesting question: Wonder if EW and People, the two most popular of the TII brands on the web, are expecting a drop in traffic once they go inside AOL?
POUND OF FLESH DEPARTMENT:: Time Inc to collect payments from AOL for exclusive use of content
Ad Age ran a story yesterday outlining how AOL has agreed to pay what is estimated at $40MM a year to Time Interactive, to be disbursed to the magazine brands now carried exclusively on AOL.
Three things about the story caught my attention:
–There are no quote from any AOL executives. Another demonstration of the complete powershift over the past 10 months.
–There are numerous quotes from Time Interactive executives, many of whom have been working on the Time Interactive side for many years, but who have not gotten much attention in press releases or from media. Suggests Squires, head of Time Interactive, is demonstrating he has a real team there–one he has confidence in.
–Time Inc is basically asking AOL for its money up front. This suggests they may not be not confident in the ability of the interactive marketing group to sell eough advertising to make the margins Time Interactive wants to have and it’s cleaner to have AOL pay up front, accounting the money as a licensing and content cost.
Given that Interactive editor-in-chief Ned Desmond is quoted as saying that the fee “covers a significant share of our expenditures online for those 14 titles,” another way to look at it is that Time demanded AOL provide this payment so they could both cover their online expenditures and be guaranteed a certain revenue right upfront.
Interesting question: Wonder if EW and People, the two most popular of the TII brands on the web, are expecting a drop in traffic once they go inside AOL?