A media industry observer who fell asleep seven years ago and woke up last week would've had a hard time believing Friday's newspapers.
That was the day that celebrity editor Bonnie Fuller publicly gave up her plans to start her own women's media company, while Quadrangle Group washed its hands of Alpha Media, publisher of Maxim. Fuller, who left tabloid publisher American Media a year ago to launch her venture, is instead going to work for Mail.com Media Corporation, the web company that recently acquired Hollywood blogger Nikki Finke. Control of Alpha Media, meanwhile, transferred from Quadrangle, which had defaulted on its debt obligations, to Cerberus.
Back in 2002, it would've been all but impossible to imagine either of these outcomes. Fuller, who had already achieved success at YM and Cosmopolitan, was on her way to becoming the most sought-after editor in the magazine business thanks to her transformation of Us Weekly, which turned the glossy gossip title from a money loser into a cash machine in a matter of weeks. Under Fuller's leadership, newsstand sales at Us climbed 46 percent that year. Just about the only other magazine generating that kind of growth was Maxim, which increased its circulation by nearly one million, to more than 2.5 million, between 1999 and 2002.
So what happened -- aside from a catastrophic turn in the ad economy and capital markets, that is? In both cases, it's the same answer: overreaching. Fuller, convinced she had discovered the secret formula to unlimited newsstand sales, jumped to American Media, where she attempted to reprise her triumph with the gritty supermarket tabloid Star and a new title, Celebrity Living. Neither caught on with readers the way Us had. Dennis Publishing, which then owned Maxim, sought to monopolize the young-men's market by pushing its circulation ever higher and launching flanker titles Stuff and Blender. Both eventually folded. Owner Felix Dennis ended up selling his company to Quadrangle for a reported $250 million or so -- a few hundred million less than he could have netted by selling it two or three years earlier.
If there's a lesson here, it's that success in the media business -- or at least towering success of the sort that reshapes industries and inspires widespread copycatting -- is more ephemeral and harder to reproduce than its achievers would like to believe. Twitter guys, are you paying attention?
Small Cap Investing
Learn now to invest in small companies the right way.View Course »