NEW YORK – TV Guide (search) is slashing the circulation it guarantees advertisers by about two-thirds and relaunching itself as a large format magazine with far fewer TV listings and more emphasis on lifestyle and entertainment, the magazine announced Tuesday.
The radical changes to TV Guide come as it struggles to remain relevant in an age where many TV viewers get their listings from on-screen guides provided by their cable companies or online.
TV Guide also said it would cut jobs as part of the revamp, but it declined say how many.
The new TV Guide, which will launch with the Oct. 17 issue, will contain just 25 percent listings and 75 percent stories, versus the 75 percent listings and 25 percent stories it has now, the company said early Tuesday.
Rich Battista, the CEO of TV Guide's parent company, Gemstar-TV Guide International Inc. (search), said in an interview that the company's research found that readers would be more interested in reading a magazine with fewer listings and more stories about TV shows and their stars.
Battista acknowledged that the digest-size magazine was losing money, but he declined to say how much. The company, which also licenses technology for interactive programming guides, does not break out profit figures for TV Guide magazine.
"We didn't believe in its old form that the digest-size magazine was sustainable," Battista said. "Any brand has to evolve in a dynamic marketplace where consumer tastes are changing rapidly."
On a conference call with investors and analysts, Gemstar Chief Financial Officer Brian Urban said the magazine's revenues have been declining over the past decade as other forms of TV listings proliferate and as the magazine's newsstand and advertising sales have declined.
The magazine currently guarantees 9 million readers to advertisers, according to its most recent filing with the Audit Bureau of Circulations. But the new guarantee will be set at just 3.2 million, which partly reflects the elimination of 3 million in "sponsored" sales or circulation paid for by third parties.
John Loughlin, the president of TV Guide's publishing group, said the higher per-unit costs of producing the larger-format, full-color magazine would make it uneconomical to distribute in some of the ways it had in the past, including through subsidized distribution in hotels, which count as "sponsored" sales.
The company will also streamline how it produces the magazine, eliminating its 140 localized editions in favor of a national edition, with either an Eastern or Pacific time zone designation.
As part of the changes, TV Guide's said it expected to incur losses of up to $110 million over its 2005 and 2006 fiscal years, which exclude losses from its recently launched title Inside TV, a celebrity magazine for younger viewers which the company said is not performing as well as expected due to delays in building up distribution.
TV Guide's effort to remake itself received mixed initial reviews from analysts. Gary McDaniel, an equity analyst with Standard & Poor's, said the company would be better off trimming costs instead of making additional investments in printed TV listings in an age where so many people find TV programs through digital guides.
"There are simply far too many channels and listings for a printed guide," said McDaniel. "It's really not a business I would be investing in."
By focusing more on celebrity news and entertainment, the magazine is also entering an extremely competitive arena already dominated by powerful magazines like US Weekly, People and Star, McDaniel noted.
April Horace, an analyst who follows the company for Hoefer & Arnett Inc., an institutional brokerage based in San Francisco, called the revamp a "positive and necessary" move. "Gemstar is very much in a stage of reinventing itself," she said.
The changes come as Gemstar-TV Guide is trying to put a tumultuous period behind it. Gemstar's former CEO Henry Yuen and former Chief Financial Officer Elsie Leung left the company in 2002 and have been charged with inflating the company's revenues, and in June of last year the company agreed to pay a $10 million penalty to settle charges of revenue fraud from the Securities and Exchange Commission.
Gemstar's shares fell 9 cents, or 2.6 percent, to $3.44 in early trading on the Nasdaq Stock Market, which is in the lower half of their most recent 52-week range of $2.93 to $6.39.
Loughlin said the magazine would also lower its cover price to $1.99 from $2.49 as part of an effort to build up newsstand sales, which are more profitable than subscription sales. The magazine will also triple its lowest introductory price of 25 cents an issue for subscribers.
The company said it expects the relaunched TV Guide magazine to become profitable in about three years. TV Guide also said it would explore the sale of SkyMall, its in-flight catalog magazine business.
Gemstar-TV Guide International is about 40 percent owned by New York-based News Corp., the media conglomerate controlled by Rupert Murdoch.
News Corp. is also the parent company of FOXNews.com.
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