“Whether black publishers are seeking ways to grow an established franchise or establish a new title, it’s going to take the resources of partners with deep pockets, media savvy, and existing channels of distribution in order to market the magazine.”
THE ESSENCE OF THE DEAL
“Deep pockets” and “existing channels of distribution” are key for the growth of Essence, the circulation of which has been standing at 1 million for the past five years. Until now, unlike its white counterpart, Vogue, it has struggled to attract major advertising dollars. Vogue’s circulation is 1.1 million, which is only slightly greater than that of Essence, but Vogue sold 3,167 advertising pages compared with the 1,167 pages sold by Essence in 1999. This disparity is in part due to the lower household income of Essence’s readers ($34,936 in 1999) compared with Vogue’s ($47,576 in 1999), and some speculate that Essence is simply at its saturation point.
“Joint ventures are really the next step for African American companies to move to the level of commerce that permits a company of 100 to multiply in size by 10%, 20%, or 30%,” said ECI President Clarence O. Smith.
The families under Time Warner offer ECI capital and resources to expand the Essence brand through the Internet, film, music, and new related businesses, including magazine launches and acquisitions.
Lewis said talks of forming a relationship with Time Inc. began last October when ECI was seeking ownership of Spin, Blaze and Vibe, which were put up for sale by new owner Miller Publishing for an estimated $200 million. Lewis said once he found Time was also interested in purchasing these titles, his first thought was “everyone else will have to move over.” But fortunate for the future of ECI, Lewis had another “think” coming.
“Then I thought if Time’s interested, and we’re interested, then let’s work together,” said Lewis. All of this pondering ultimately led to Time Inc. gaining a 49% stake in ECI’s brands, including Essence magazine, Essence Entertainment, Essence Travel and Essence By Mail. Latina magazine, which was just launched four years ago, will remain the sole property of ECI. ECI and its shareholders retain a controlling interest in the venture, which therefore still qualifies as a be 100s company.
Don Logan, CEO and chairman at Time Inc., said he and the management at ECI are forming committees to outline the best products to create and promote under this new venture.
With the digital divide closing and the drastic increase in the amount of money spent by African Americans on Internet access, it’s very likely Time Warner will promote the Essence brand to its Internet customers. “Time is positioning itself to bring segmentation to virtually all of its media properties, but especially those that fall under the AOL side of the business. The Essence name and expertise will help them to do that,” says Smikle.
Time Inc. agrees. “I don’t know what’s best to develop for the African American market. That’s why we’re forming a partnership with someone who is a major player in