Penske Media acquires "Variety,' plans to tear down pay wall on brand's website
By Matthew Schwartz
It's going to be a different Variety.
Penske Media Corp., which owns Deadline.com, early last month announced that it had purchased the 107-year-old trade publication that covers Hollywood from Reed Business Information. RBI, which had owned Variety since 1987, put the property back into play in March after trying to sell it in 2008.
Financial terms of the deal were not disclosed, but several reports pegged the price at $25 million. Hedge fund company Third Point provided debt and equity financing for the transaction.
Penske Media owns several digital brands that cover the entertainment field, including HollywoodLife (managed by Bonnie Fuller, former editor of Us Weekly); ENTV.com, Movieline.com and TVLine.com.
“We're thrilled to welcome Variety and its exceptional team into the PMC organization,” said Jay Penske, chairman-CEO of Penske Media, in a statement. “As part of this significant acquisition, we plan to rapidly build upon Variety's foundation while extending this invaluable brand's presence across the Web, broadcast, mobile and international markets.” Penske and a spokeswoman for Third Point said they had no further comment on the acquisition.
According to new corporate sibling Deadline.com, Penske told Variety staffers that he plans to take down Variety.com's pay wall and will continue to publish the print publications “for the foreseeable future.” As of September, Variety had about 28,000 daily subscribers and 30,000 subscribers for its weekly edition, according to BPA Worldwide. The portfolio also includes a conferences and events business and several databases.
Variety, which put its pay wall up n 2009, has been one of the few b-to-b media properties to adopt a paid model for online content.
But the brand has suffered in its competition against online rivals that provide free access to their content. In August, Variety.com garnered about 320,000 unique monthly visitors while HollywoodReporter.com and Deadline.com, which offer free access, had 5.1 million and 2.4 million unique monthly visitors, respectively, according to comScore.
“It's probably only a matter of time before the print version disappears,” said Ken Sonenclar, managing director at media investment bank DeSilva & Phillips “I can't imagine Penske changing its entire business model, which is a completely digital enterprise.”
Last year, Variety introduced online features, such as its Showblitz breaking news blog, and acquired TVtracker, a research company that follows U.S. filmed entertainment, to beef up its data offerings.
The sale of Variety liquidates RBI's media holdings in the U.S. and leaves the publisher with fewer than 100 magazines globally. Since 2008, it has sold about 45% of its print assets while acquiring data services, including Ascend.