Standard Media will suspend publication of the Industry Standard and lay off most of its staff.
US publisher Standard Media Inc. (SMI) has announced it will stop printing its weekly Industry Standard magazine, and that it will lay off 165 of its 180 staff. The remaining staff will update the Industry Standard website, which will remain live for the moment. The company hopes to find a buyer for the magazine.
The direct cause of the closure is obvious. SMI was hit by the crash in the high-tech and Internet sector, where most of its subscribers and advertisers operate. Many of the subscribers went bust, while many of the advertisers cut back hugely on marketing. Advertising revenue fell 71.5% this year, and as a one-product company, SMI could no longer sustain the resulting losses.
However, the closure also demonstrates major flaws in SMI’s strategy. The Industry Standard is one of the most respected brand names in the industry, with a reputation for strong, intelligent comment and analysis.
It is also owned by powerful media names, which should be able to leverage this reputation. Majority owner IDG and minority shareholder Pearson both have the resources to put more money in. After all, Pearson invested $117 million in Internet ventures in H1 2001. But following its enormous success in 1999-2000, SMI was looking to distance itself from these groups, launching an IPO. Just as the company started to cut the strings to IDG, all its revenue streams collapsed.
There are also questions over the company’s management. While founder John Batelle is undeniably visionary in outlook and positioning new products, insiders question his day-to-day management skills. By the time he was replaced as CEO by Richard Marino in March 2001, the writing was already on the wall. Mr Marino implemented severe cost-cutting measures such as closing the UK operation, but these weren’t enough to turn the company around.
Ultimately, a magazine that broke all ad records and boasted of having the most successful launch of all time is now defunct. Its money and reputation have been squandered.
