Next Issue Media, the magazine industry JV meant to develop content and formats for the next generation platform devices, is having a lot of teething troubles, though a late course correction may help, according to multiple sources we have spoken to over the last few weeks. The JV — which consists of News Corp (NSDQ: NWS). Hearst, Time (NYSE: TWX), Conde, Meredith (NYSE: MDP) — was formally announced late last year. The five companies together put about $10 million into the venture, we have learned, with each company getting two board seats, for a total of 10 (yes 10!) board members. You know where this is going.
Time Inc vet John Squires, who started gestating the idea out of the parent company last summer, was named the interim managing director, as the company looked for a permanent CEO to run it. And that’s where the problems started, sources say. With two different recruiters working on it for the last 6-7 months, they still don’t have a candidate, and burned through tons of goodwill among the potential candidates they dragged along on this hunt. One candidate told me about recruitment meetings with every board member, following which there were still meetings left with Rupert Murdoch and Jeff Bewkes, after which the candidate withdrew from the process.
Another source close to the company insists that a decision on CEO will be wrapped up by end of this month. It is likely Squires will become the permanent CEO, but the question is why didn’t they go with him in the first place? He even publicly said he wanted to be the CEO, in an interview with us at company launch announcement. Why string him along as they look for “someone better than him?” At minimum that is demeaning for him, one source close to Squires said.
Meanwhile they hired management consulting biggie Oliver Wyman to figure out the business strategy and write a business plan, which is never a good sign for a “startup”. While that generated some good presentations for MPA conferences, little else.
Then as tons of other e-readers kept coming in the market Next Issue didn’t have a product on the market, and still doesn’t. As Apple (NSDQ: AAPL) started working on iPad and started reaching out to media companies, Time Inc. along others, looked at Next Issue to provide the expertise and platform to develop for it, but when it became clear that wasn’t going to happen, each went their own way. Now, who needs a third-party company, and for what? Analytics, maybe, but that’s really where Apple and other platform/device companies are the gatekeepers. One of the stated goals of the company: develop a common digital storefront. Well, while that idea sounds grand, again, it isn’t their decision; in iPad’s case it is Apple’s decision to not let any third party sell content outside of their system, and unlikely that will change soon.
One of the other stated goals, of developing ad formats and standards for these devices, could still be a business it could run with. It is early in the game, and the ecosystem is very fragmented. Agencies are still struggling with keeping up with these platforms, and a third party company, with access to all this content, could really go creative with this, if it had the right structure.
Next Issue and Time Inc refused to comment on this story.