Financial Situation "Dire" at Gay Media Powerhouse PlanetOut
Once the stock market's great gay hope, PlanetOut Inc. saw its shares tumble 33% last week to close at $1.64, its lowest valuation since the company went public as gay media's first big IPO three years ago.
Reports the San Francisco Chronicle: "The San Francisco owner of Gay.com, along with the Advocate and Out magazines, disclosed this week that it will run out of money before the end of the year without an infusion of cash. The dire situation is a consequence of PlanetOut's declining subscriptions for personal ads, a shortfall in advertising revenue and trouble booking passengers on its gay-oriented cruises. A dismal first-quarter earnings report on Wednesday hammered the reality home. Virtually every piece of the business needs fixing, according to management."
PlanetOut's CEO Karen Magee told analysts late last week: "This is deeply disappointing and concerning to me and the rest of the management team. We've got major work to do at PlanetOut to generate the healthy revenue growth and solid earnings performance that I believe this company is capable of producing."
The company's financial situation is grave, reports the paper: "PlanetOut is under the gun to come up with an additional $15 million to meet the terms of an existing loan, or face default. If it's unable to get the financing, the lender could foreclose on PlanetOut's assets, a potential death knell. The company, which had $11 million in cash and short-term investments at the end of the first quarter, said it would run out of money by year's end without additional financing."
Cash crisis closing in on PlanetOut [sf chronicle]
Aw... I'd think Identity Politics was a really safe financial bet. [sarcastic wink]
Posted by: RSL | May 14, 2007 8:54:05 AM
Other gay media will replace Out and The Advocate if they go under. Frankly, I'm DELIGHTED that they are having trouble. They go all out for any straight celebrity, model, athlete, politican etc that is on the cover. It's all about straight people and catering to them. What the f$ck about the gay people; isn't Out and The Advocate for gay people? They've shown they don't care about their readers and clients. So they go under; that's fine by me.
reFresh magazine learned this lesson as well. They once printed 12 magazines a year with almost all the covers being of straight men. Now they print only 6 a year and are still in financial trouble.
Attitude magazine is also in the same spot. They care more about catering to straight people than they do their gay readership.
Posted by: Jack! | May 14, 2007 8:54:17 AM
If this comes as a shock to anyone, well, I've got a bridge, yada, yada, yada...
Most of these gay mag rags are little more than outdated (read: printed) soft porn. If any gay mag rags succeed (if you can call extremely low subscription rates successful), it's because they rely much more heavily on the pics than the reads. Obviously, this was not the case with Advocate and Out.
When you live in this world of gay blogs and gay rags, you become quickly convinced that the world is a much gayer place than it really is.
If you didn't see this coming during their IPOs, then you've probably been squirted in the eye more times than you'd like to admit.
Psychedelic Peace.
Posted by: Psychedelic Pariah | May 14, 2007 9:07:41 AM
Well, I think this is all because the entire PlanetOut company has been allergic to word "gay" from the beginning. They always play it "safe" and never talk about the true aspects of what it's like being gay. They have always steered away of adult subjects and the adult industry, where let's face it this is where the majority of their money came from. Now they're even trying to sell the Spec Pubs side of the business that runs the Unzipped, Men and Freshmen Magazines - Denial - big time!
Posted by: John | May 14, 2007 9:17:46 AM
towleroad is the new gay media... who needs to buy a magazine?
Posted by: A.J. | May 14, 2007 9:21:33 AM
There are a lot of things wrong with that company. The first is what exact kind of company are they? Do they do cruises, magazines or personal sites? The second is the fact that they alienate a lot of their gay readers, while they don't do much to attract straight allies who would read it as well.
I'm certainly not an expert, but it seems like they should either sell several segments of their company (like the cruises) or focus on ways to sharpen its image and attract both a more loyal gay audience and straight allies. I could write a 20 page paper to suggest how they do that, but hopefully they're either hiring the people with that expertise or already have it (which doesn't really appear to be the case, given the current situation).
Also, the sites they have could be so much better - both in terms of content and tools. With their assets, they should try to find ways to link each part of their company with the other: use advocate content on planetout, gay.com, etc. etc. Gay.com needs a refresher given the success of myspace.com, etc. that attracts everyone and not just gay people. Gay.com seems kind of like a man hunter at present, except without as much success or skeevey guys that have stds =p I think it could inspire to be much, much more... if it offerred some innovative, fun tools (like help hook people up with their local gay communities, etc.)
Posted by: Ryan | May 14, 2007 9:28:36 AM
I think the bottom line is the magazines just aren't that good. They come off as amateurish and the articles are rarely very interesting. They don't give readers a strong reason to buy them. Similarly, Planetout.com has a poor layout and hasn't changed much in years. Little wonder people have flocked to newer, cooler sites.
Posted by: sam | May 14, 2007 9:42:49 AM
All of the previous are true about their magazines. Additionally, I have cruised with RSVP for 7 years. This year I passed since the rates have more than doubled those of previous years and rates for the same cruise can be found for 25% of the RSVP price. With more acceptance, many people no longer feel they have to be on a 100% gay boat. I had no problem paying a premium price in the past, but now it is so out of focus I feel it is way overpriced.
Posted by: Kevin | May 14, 2007 9:59:23 AM
The problem is 2 fold
1- new media renders old media (print obsolete (even tv is getting there with the advent of internet specific shows.....NBC etc have seen the writing on the wall and are no offering their shows for downloads)
2- when one claims to be a gay news source but all the models one uses are straight then one should expect a backlash. Heck, I stopped reading OUT way way back when OUT stopoped outing people. The advocate showcasing and interviewing straight celebs on their views of us gays does NOT make us feel all special and blessed by those straight actors who might support us. A gay mag should focus on gay models and gay interviews. Then again it shouldn't even published in print but rather be 100% new media internet based anyway which cuts costs a thousand fold by getting rid of paper, printing, and shipping costs
Posted by: pacificoceanboy | May 14, 2007 10:22:14 AM
Everybody was having a cow a month ago when Out ran their Glass Closet cover with the Anderson and Jodie masks. Where is the outrage now that The Advocate has invited two notoriously closeted actors—Latifah and Travolta—to pimp their version of Hairspray on the cover?
THIS is what you should all be furious about—not some straight model on the cover of Out. What could be a bigger betrayal of the movement? Boycott The Advocate AND Hairspray!
Posted by: 24play | May 14, 2007 10:46:36 AM
I can't say I'm heart broken. I really don't like their magazines and i'm not paying 75.00 to sign up for gay.com
Posted by: Matt | May 14, 2007 10:53:56 AM
I am not a regualr reader of Out or the Advocate, but am I subscriber to gay.com who links to articles published in both magazines daily. No wonder they're folding.
Here are todays big stories on gay.com, and I am paraphrasing.
Study confirms gay parents may be better than straight parents. So far so good.
Then we have a story on getting workout results, pomegranite juice as an addition to your cocktails, and a "did I get syphillis from the happy ending after my massage?"
Seriously. Again, no wonder they're folding.
Posted by: Marco | May 14, 2007 10:55:19 AM
this should come as a surprise to NO ONE. Bothmagazines have seen better days. The editors of both magazines have fled or been forced out. Both pubs are using amateurish writers so the quality of the editorial content has taken a big nosedive.
Posted by: John | May 14, 2007 10:56:50 AM
No wonder these clowns are in trouble.
I originally subscribed to OUT back in 1997 or 1998 and renewed for several years largely because I thought it was one way to support the gay community. Well,I got over that and I stopped subscribing (i.e. did not pay for any future issues) yet despite reminders and warnings about the impending termination of my subscription, the magazine contines to arrive at my doorstep. Perhaps I am on some VIP/Comp list (doubt it) but I think the real reason has something to do with poor record keeping.
Good Luck to them and I'm glad their CEO is "concerned" about the dire state of company and realizes that they have a deep hole to dig out from. I hope they start by getting rid of her sorry excuse for a leader.
Posted by: hoya86 | May 14, 2007 11:06:40 AM
I agree that the content is amateurish. I wonder what would happen if they stopped dumbing-down the content and actually started publishing real journalism?
Then again, even professional and respected publications like the New Yorker and Atlantic Monthly have seen HUGE decreases in subscriptions. It's all about the net, folks.
Posted by: Brian | May 14, 2007 11:12:03 AM
That's what happens when you put out shit and call it a magazine. I'm sure the other fag rags will be following (fingers crossed). Maybe someone will publish a magazine for gay people who actually know how to read.
Posted by: shane | May 14, 2007 11:37:20 AM
They should get rid of Gay.com. Nobody uses that piece of sh*t. And as long as Karen McGee is at the helm it will continue to suffer. She's a fu#king idiot.
Posted by: B | May 14, 2007 11:42:51 AM
24PLAY - I agree that the Advocate cover is infuriating, but I still have enough fury left for Out. It's not an either/or thing.
Posted by: Gregg | May 14, 2007 11:57:31 AM
I don't bother with any of them. The magazine business in general (and newspapers) is way down. Ads are moving to cable TV and the Internet. No minority can expect exclusive treatment when the least common denominator effect rules the content world, so a gay mag is almost a oxymoron.
Posted by: anon | May 14, 2007 12:34:03 PM
Reminds me of the way Chris Crain and William Waybourn used Windows Media (The Blade papers) as their own travel account until they were both forced to sell the newspaper conglomerate to a straight investment firm from New York. Nice legacy to leave the gay community, right? They were both fired by the NY firm, despite their glowing press release that stated the contrary.
Posted by: Scott | May 14, 2007 12:44:02 PM
I'd care if the magazines didn't exclusively pander to the sensibilities of white men. What can they print that can't be found on the internet anyway?
Posted by: 000000 | May 14, 2007 1:19:09 PM
I honestly do not read the magazine anymore, I would rather sit and read articles on the internet. I also enjoy the blog style of news better as well.
Posted by: Travis | May 14, 2007 3:18:16 PM
Yet another argument against media consolidation.
Posted by: Patrick W. | May 14, 2007 4:00:36 PM
I don't quite buy the old media/new media argument on why PlanetOut is going down. By looking at last years 10K they have significantly increased revenues but their expenses coupled with re-structuring costs have just tanked them. This is a case of complete mismanagement of businesses. You can just look at gay.com and the magazines and see how unfocused they are.
Posted by: yoshi | May 14, 2007 6:13:07 PM
Their online and print products have been marginal to crap for years and failed to innovate. Leadership starts at the top, and I'd start by firing the CEO who has so obviously miserably failed to set a transformational agenda.
Posted by: Bongo | May 14, 2007 6:39:46 PM