Variety, the standard in Hollywood trade journalism for decades, has become the first victim in a war for a market niche that brings lots of bragging rights, but questionable rewards in a media day and age dominated by the Internet.
Penske Media Corp. and hedge fund backer Third Point, which owns Hollywood industry site deadline.com, was the purchaser. It picked up the publication for a bargain basement price, $25 million.
But in a telling sign of just how disruptive the market has become, Chief Executive Jay Penske, acknowledged to The Los Angeles Times that he has no idea at the moment how he plans to integrate the brand with his current operation.
“Before we make any substantial changes, we need to spend more time with the current team,” he told the newspaper. “We need more data.”
Variety and to a lesser extent its chief competitor, The Hollywood Reporter flourished during the golden age of Hollywood, when it was a resource for acting jobs and a source of inside info on studio machinations.
But it’s biggest source of advertising was always tied to the award shows, especially the Oscars. Studios sometimes spent millions of dollars on advertising to encourage voting members to pick their pictures. But tightening budgets, a break-down in the studio system, changes in voting for the Oscars and the rise of the Internet undercut the market.
Both Variety and The Hollywood Reporter were often accused of being in bed with the major studios, i.e. advertisers, which colored their coverage and undermined their credibility. That opened the door to upstarts like Nikki Finke, who launched her own Web site and offered no-holds-barred coverage of the industry six years ago and is considered a must read today.
As print lost relevance to the Internet, Variety and The Hollywood Reporter struggled with the transition. Both have held onto their print editions, five-day daily and weekly magazines, while developing an online presence.
Whether Variety, the more recognized brand, supplants deadline.com remains to be seen. Penske blamed the publication’s woes on “complacency,” although how true that is recently is debatable. He said he intends to make it “absolutely fundamental and indispensable.”
He told The Times he intends to operate deadline and Variety as distinct entities, but ultimately that may be impractical.