The Big Picture: Variety’s future looks bleak

I once asked a famous producer how he first became fascinated with Hollywood. His answer? “When I was 14, I got a subscription to Variety.” And no wonder. For more than a century, Variety was the most trusted brand in the entertainment industry, the bible of showbiz.

But those days are gone. Media outlets everywhere are wrestling with how to generate revenue as readers have abandoned print for easy Web access to information. But Variety has been hit especially hard by its core audience’s migration to the Internet. Hollywood deal makers are voracious consumers of information, but they expect it to be delivered as fast as possible.

They sift through email blasts, tweets and Google alerts, making snap judgments about what to read based on provocative, attention-grabbing headlines. When executives or agents come out of a meeting, they invariably check their BlackBerrys or iPhones, eager to see what they’ve missed. It’s a Darwinian test of how well news is packaged; the email alert with the most sensory stimuli being the one that wins hands down.

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When it comes to adapting to this ultra-fast news cycle, Variety has been a laggard. For years, Hollywood’s oldest trade publication treated bloggers with disdain. Now it’s paying the price for its refusal to change with the times. Having lost most of its best-known writers, and having watched revenues drop dramatically from their 1990s highs, Variety is up for sale.

And in a sign of how far its star has fallen, the 107-year-old trade publication, which was valued at close to $100 million as recently as 2008, is now thought to be worth as little as $40 million.

According to recent media reports, Variety’s parent company, Reed Business Information, has several bidders circling the property, notably supermarket magnate Ron Burkle; Sharon Waxman’s online Hollywood news site the Wrap; and Penske Media, which owns Nikki Finke’s website, Deadline.

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But after I spent a week speaking with Variety’s natural constituency — a host of industry insiders — I’m not sure the publication has a future at all. For a prospective suitor like Deadline or the Wrap, the main reason to buy Variety would be to put a key competitor out of business and use the remnants of its print edition as a magnet for lucrative awards season advertising.

How did Variety sink so low so fast? The answer tells us a lot about the importance of innovation in today’s turbulent media environment.

A decade ago, when Los Angeles magazine profiled Variety’s then-editor Peter Bart, writer Amy Wallace said that “more than any other entity, Variety reflects and informs Hollywood’s collective consciousness.” But today, the paper has dramatically lost influence. Its online readership is well below its competition’s; its print edition often goes unread. A surprising number of subscribers said they get the paper just to keep tabs on the awards-season ads.

As one studio marketer told me: “I only subscribe out of habit. I can’t remember the last time I read anything in the paper when I didn’t already know the information from somewhere else.”

No one at Variety would comment for this story. But its key misstep seems to have come in 2010 — a year after Bart left the top editor’s post — when it put up an online pay wall. That took the paper out of the breaking news game, allowing Deadline, which was already beating the trade to innumerable scoops, to fill the void. Folks in town got into the habit of going to Deadline and other free online sources for news. Deadline even stole Variety’s top reporter, Michael Fleming.

Although it started charging for its website, Variety didn’t do much to make it inviting. Its design remained almost mind-bogglingly old-fashioned — static for most of the day, hardly encouraging repeat visits.

Meanwhile, the print edition stayed a rusty relic; even the lingo is painfully retro — only in Variety is it still written that Steven Tyler is “ankling” his"American Idol” gig. The front page is full of stories that were online many hours earlier. Except for during awards season, ads are sparse. The only ones in Monday’s edition, for example, were promoting conferences that Variety was associated with (such gatherings have become a sizable source of revenue in recent years). The last time its readership was audited, in 2009, Variety’s weekday edition had an average circulation of fewer than 27,000.

Meanwhile, the Hollywood Reporter, which for years was the also-ran to Variety, reinvented itself in late 2010. It stopped daily print publication and adopted a weekly, glossy magazine format. It also overhauled its website — positioning itself as a broader, more celebrity-oriented outlet that appeals to industry insiders as well as consumers who read publications like People.

It was a bold move by the Reporter’s deep-pocketed owner, Prometheus Global Media. But magazine start-ups are costly affairs and it remains to be seen whether the magazine gambit will pay off.

Still, the strategy has paid dividends, online at least: According to statistics from ComScore, the Reporter’s site had 4.9 million unique visitors in June. Deadline — which has a simple vertical scroll devoted to the latest breaking news — had 1.3 million. The Wrap had 897,000. Variety had a woeful 354,000. Web traffic doesn’t necessarily translate into profitability, but as advertising increasingly migrates online, Variety is less and less of a destination site.

I asked a dozen industry insiders — including two studio chiefs, a top marketing executive, an international sales rep, a pair of film and TV producers as well as a contingent of agents, managers and publicists — which trade publication they read. Deadline was easily at the top of the pack, followed by the Hollywood Reporter and the Wrap. Variety was dead last. When I asked if anyone could name a favorite Variety reporter or critic, I drew mostly blanks.

Neither Finke nor Waxman would discuss any possible acquisition plans involving Variety. But anyone who wants to buy Variety will have to decide how much value it has retained as a media brand. The verdict of history isn’t kind. As anyone who once had a Kodak camera or Compaq computer or Sony Ericsson cellphone can attest, when a brand loses its mojo, usually because it failed to change with the times, the mojo ain’t coming back.

Variety is still a name that means something in show business, but largely only to members of an older generation. It’s always possible that a wealthy media baron could swoop in and pay top dollar for the rights to the Variety name, betting that a turnaround artist could breathe new life into the old showbiz war horse.

But money alone won’t be enough, not when Deadline has already grabbed the insider audience and the Hollywood Reporter has staked its claim to the casual showbiz fans. It would be hard to imagine even the boldest entrepreneur restoring Variety to its former glory.

I was one of those showbiz geeks who read the trade when I was a kid. I’ll miss it when it’s gone. But I think the day is fast approaching when it will be Variety that is ankling the media business.

Twitter: @patrickbigpix