Atlantic’s Woes Show How Pandemic Is Crushing Live Media Events
(Bloomberg) -- For years, publishers have built side businesses around live events, seeing them as a lucrative way of connecting journalists and readers in person. Now, the pandemic has thrown that into jeopardy.
That became clear Thursday, when the Atlantic, the political and cultural magazine that has been an industry leader in live events, announced it was cutting 68 jobs, or 17% of its workforce.
In a staff memo, David Bradley, chairman of the Atlantic’s parent company, Atlantic Media, attributed the dismissals partly to “the overnight and near-complete undoing of in-person events.” The reductions were deepest among employees in that area, “given the uncertainty about when in-person events will return,” he said.
The job cuts came despite the magazine signing up more than 90,000 new subscribers since March and being majority-owned by the Emerson Collective, which was founded by Laurene Powell Jobs, the 56-year-old billionaire and widow of Apple Inc. co-founder Steve Jobs.
For publishers, live events were never as big of a revenue stream as subscriptions or advertising, but they had become a meaningful side business. Thousands of people would flock each year to the New Yorker Festival, Texas Tribune Festival, the DealBook Conference and others. They’d buy tickets to hear prominent journalists interview luminaries in business, politics and other fields, and to network with peers. Advertisers paid large sums to sponsor them.
The Atlantic’s events business, called AtlanticLIVE, hosts the Atlantic Festival and the Aspen Ideas Festival, among others. The magazine has relied on live events more than most publishers, according to industry analyst Ken Doctor. Twenty percent of the Atlantic’s revenue came from conferences, whereas it makes up less than 10% of sales for most news outlets.
“The Atlantic used events as a major revenue driver,” Doctor said. “They set the gold standard in terms of quality.”
But the global pandemic has threatened just about every business that relies on a large number of people gathering in person, including conferences.
“In one week in March, maybe two, the ground fell out from under live events -- live anything -- worldwide,” Bradley said in his memo.
The Atlantic isn’t the only publisher seeing declines. On a recent earnings call, New York Times Co. said it expects lower revenue from live events due to the pandemic. The NYT Live division is one of several businesses the company lists under “other revenues,” which total only 10% of the Times’ sales.
Bloomberg LP, the owner of Bloomberg News, also puts on media events that compete with the Atlantic’s.
Gannett Co., the largest U.S. newspaper owner, said on a February earnings call -- before the outbreak intensified -- that it was planning “significant expansion” of its events business this year, targeting 30% to 35% revenue growth after generating nearly $70 million last year.
The company is now retooling its plans.
“Our team has done an amazing job converting many of our events to virtual events, such as our High School Sports Awards happening June 18th, which has allowed us to maintain a portion of the revenues,” the company said in an emailed statement. “Currently, our events revenue is only 2.5% of our total revenue, so the impact on our events business resulting from the pandemic is not material to our overall results.”
Other media outlets, like the Atlantic and Vox Media, have hosted live events virtually using videoconferencing software. Doctor expects more media conferences will go virtual, even after the pandemic, partly because people are more comfortable using programs like Zoom. And though tickets to virtual events are often cheaper, publishers can host more of them with less expense.
However, most of the money in live events comes not from people buying tickets to attend but from selling sponsorships, Doctor said. And in the recession, advertisers are cutting back.
“Can you get advertisers to pay 50% or 75% of what they paid for a physical event?” Doctor said.
The Texas Tribune plans to host its annual Austin festival virtually this fall. In an interview, Texas Tribune Chief Executive Officer Evan Smith said he expects sales for the event to be lower than last year, when the festival generated $2.3 million in gross revenue, or about 23% of its total, against $950,000 in expenses. But this year’s virtual festival will also be cheaper to produce because the Tribune, a nonprofit news outlet, won’t have to pay for venues.
“It’s a blow,” Smith said of the pandemic, “but it’s a blow we can withstand.”
Tickets for the festival will go on sale June 1. While the price will likely be cheaper this year, Smith said he expects to sell more because people don’t need to travel. “The thing about virtual events is it makes participation easier and saying ‘no’ harder,” Smith said.
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