Time Out Markets: How the magazine company transformed itself

‘City life has changed, people have changed and Time Out has changed too.’

That’s what Time Out Group said when it announced last year it would discontinue the print edition of its London magazine, another British title that would fall victim to the digital media revolution.

Not even becoming a public free paper for commuters to pick up at train stations could not stop the demise, which has been accelerated by Covid-19 which temporarily brought commuter numbers to a trickle.

But while the London magazine’s move to an online format was a big deal given its iconic status, Chris Ohlund, the company’s CEO, believes it was a necessary next step.

“To move the business forward,” he says, “sometimes you have to be willing to let go of elements of your portfolio that no longer feel like the future – our audience is now digital all day, every day, so that’s true Time Out must be.’

Only a few cities still offer physical Time Out copies, including Barcelona and Madrid, following the company’s decision to pursue a “digital-first” strategy.

The transformation appears to be working for the group, with the most recent half-year results showing digital media revenues up 65 percent, driving overall media revenue up a better-than-expected 43 percent.

However, the Food Market division saw sales grow faster after six months of continuous trading for the first time since before the pandemic.

These are essentially big venues in cities like Boston and New York in the US, Lisbon, Portugal and Dubai (in the shadow of the world’s tallest building no less) where tourists and locals alike flock to find little takeaways and bars, typically showcasing the best places to eat in that city.

These markets have shared benches, contributing to a bustling, social atmosphere.

The share of Time Out’s revenue from these markets is likely to continue to grow in the coming years as new locations are launched in locations such as Vancouver, Abu Dhabi and Prague.

Eight sites are being developed under so-called ‘management agreements’, with Time Out receiving a healthy share of revenues and profits without contributing any cost of capital, as part of a long-term goal to open 30 markets.

“There has never been a better time for destination food halls to expand, with landlords looking for experiential, immersive anchors to draw visitors to mixed-use developments,” said Liberum analysts Anna Barnfather and Nishant Dahad. in a recent brokerage note.

‘Attractive conditions are being offered at a time when consumers are looking for convenient, social experiences.’

If all eight of these establishments come on board, Time Out estimates they will bring in around £13 million a year in underlying revenue.

The plans hint at Time Out’s highly commercial operations, one that’s a long way from its beginnings as a counter-cultural weekly where readers could learn about upcoming marches against the Vietnam War in a section titled “Agitprop.”

Named after a jazz album by Dave Brubeck, the company was founded by Tony Elliott, who realized that there was no magazine in London detailing the wide range of cultural events taking place in the capital.

The hard-print debut edition sold 5,000 copies, but that number had increased sixfold by the early 1970s when it published reviews, news, and interviews with David Bowie and Andy Warhol, among others, and hired Monty Python as guest editors.

The magazine had a markedly left-leaning leaning during the period, campaigning on issues such as gay rights and civil liberties, which it combined with a healthy appetite for investigative journalism.

That messiness peaked in 1976 when, in an article titled ‘The Eavesdroppers’ journalists Mark Hosenball and Duncan Campbell exposed the existence of a shadowy intelligence organization called GCHQ.

It caused such an outcry that Hosenball was deported to the US and Campbell and his colleague Crispin Aubrey were tried under the Official Secrets Act. Both were found guilty, although they received no punishment.

But while the magazine won a victory for press freedom, its reputation for radicalism would gradually seep away during the Thatcher era as it took a more consumerist outlook.

A crisis arose in the early 1980s when staff staged an unsuccessful seven-month strike over management’s plans to dismantle the group’s equal pay structure.

Elliott, who emerged victorious but bruised financially, would go on to build Time Out into a global media powerhouse.

Annual directories on movies, drugs, fashion and restaurants were published, a majority stake in the fashion magazine ID was bought and a huge overseas expansion program was started.

Time Out New York began appearing on stands in 1995, the same year its London predecessor reached a record 110,500 circulation, and the company launched its website.

In the new millennium, magazine franchises sprang up in dozens of cities from Istanbul to Beijing, Tel Aviv, Sydney and Singapore, and Time Out even started an online dating service.

The internet would become something of an enemy for the company, however, as sales fell and advertising revenue fell amid a proliferation of free media and the global financial crisis.

After re-mortgaging his home to satisfy Lloyds Bank, Elliott ended his long refusal to accept outside investment – which had put a brake on Time Out’s capital – by buying a 50 percent stake in January 2010. selling to venture capital investor Oakley Capital.

Now debt-free, the printing business was downsized; the London magazine became free and some annual guides were discontinued as the group decided to further develop the digital side and diversify into hospitality.

Time Out Lisbon, a dining room where diners can choose to drink a Beirao liqueur or eat treats from queijadas sweets to prego, a type of steak sandwich, is now one of the Portuguese capital’s top tourist attractions.

Five more markets in North America opened before the pandemic forced all of them to close or be subject to heavy social distancing restrictions.

Getting them to work again was a problem in itself, says Chris Ohlund.

“As the brand made the most of the situation and focused on ‘Time In’, the biggest challenge was to rebuild the business and create and deliver an ambitious strategy to be positioned to benefit once consumers were able to go out, travel more, look to gain more experiences and explore cities.”

But he added, “Thanks to our business model, strong brand, dedicated workforce, supportive partners and customers, and experience-hungry global audience, we were able to overcome the challenges of 2021 and go from strength to strength.”

Despite this, the group’s results over the last six months showed that losses increased by almost a quarter, due to increased activity in its markets, as well as the cost of layoffs and debt interest.

Time Out has not made an annual profit since becoming a public company, and net debt soared from just £4.8m in 2018 to over £52.7m at the end of last year.

Anna Barnfather believes that one of the biggest problems facing the company is one of the biggest problems the company faces because of the money it takes to pay down the debt.

In addition, she said Time Out faces the obstacle of “gaining critical mass in markets” and controlling costs due to the geographic dispersion of the market division.

But according to Ohlund, “There aren’t as many challenges as opportunities out there, and we feel like this is just the beginning.

“So while we’ve seen continued momentum…we still have a lot to do, and we need to continue to innovate, evolve, and remain the brand people go to for the best in town.”

The London print magazine may be gone, but in terms of popularity, the company has seen its online audience grow, reaching 73.1 million a month at last count, a 28 percent increase over 2019 volumes.

But even if digital could be the future of media, people still crave the need to socialize over a burger or beer, something that’s changed little since the first Time Out London edition listed health restaurants under a section labeled “Rabbit Food.”

This gives Time Out markets an ideal opening to become institutions as big as the magazine in its heyday.

For the market business to grow steadily, it needs the right locations, management partners and constant reinvention “to keep it fresh, exciting and relevant,” said Fiona Orford-Williams, senior analyst at Edison Group.

In the short term, she warns, the cost-of-living crisis will dampen trade as cash-strapped households skimp on dining out, travel and entertainment.

Nevertheless, the company’s association with clubbing and having fun puts it well placed to attract advertisers and businesses operating in the markets.

That reputation for having fun has always been one of Time Out’s greatest strengths, even as the group has transformed itself in almost every other way.

It’s hard to imagine the company leaving, whatever changes the company decides to go through.