Time Out Markets: How the magazine company transformed itself

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

So said Time Out Group when announcing the print edition of its London magazine would cease publication last year, another British title to fall casualty to the digital media revolution.

Not even becoming a public freesheet commuters could pick up at railway stations failed to halt its demise, which was accelerated by Covid-19 temporarily bringing commuter numbers to a trickle.

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

Dining success: Time Out Lisbon is one of the Portuguese capital’s top tourist attractions

‘To drive the business forward,’ he says, ‘you sometimes have to be ready 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 where Time Out needs to 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 its most recent half-year results showing digital media revenue rose by 65 per cent, helping its overall media sales climb by a better-than-expected 43 per cent.

However, its food market division saw turnover expand at a faster pace after experiencing six months of uninterrupted trading for the first time since before the pandemic.

These are essentially big venues in cities such as Boston and New York in the US, Lisbon, Portugal and Dubai (located in the shadow of the world’s biggest building, no less) where tourists and locals turn up to find small takeaway restaurants and bars, typically showcasing the best places to eat in said city.

These markets have shared bench-type sitting, which helps contribute to a buzzy, social-led atmosphere.

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

Eight sites are being developed under so-called’ management agreements,’ whereby Time Out will receive a healthy share of revenues and profits while not contributing any capital costs, 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 drive footfall to mixed-use developments,’ said Liberum analysts Anna Barnfather and Nishant Dahad in a recent broker note.

‘Attractive terms are on offer at a time when consumers are seeking out convenient, social experiences.’

When all eight of these establishments come on board, Time Out estimates they will yield approximately £13million per year in underlying earnings.

The plans signify Time Out’s highly commercial operations, one far removed from its beginnings as a countercultural weekly where readers could learn about upcoming marches against the Vietnam War in a section entitled ‘Agitprop.’

Named after a Dave Brubeck jazz album, the business was founded by Tony Elliott, who realised London lacked a periodical detailing the vast range of cultural events happening throughout the capital.

Entrepreneur: Time Out founder Tony Elliott (pictured) built the firm into a global powerhouse

Its crudely-printed debut edition sold 5,000 copies, but that number had soared sixfold by the early 1970s when it was publishing reviews, news and interviews with the likes of David Bowie and Andy Warhol, and hiring Monty Python as guest editors.

The magazine espoused a noticeably left-wing bent during the period, campaigning on issues like gay rights and civil liberties, which it combined with a healthy appetite for investigative journalism.

That muckraking spirit reached its pinnacle in 1976 when, in an article entitled ‘The Eavesdroppers,’ journalists Mark Hosenball and Duncan Campbell revealed the existence of a shadowy intelligence organisation 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.

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

A crunch occurred in the early-80s when staff staged an unsuccessful seven-month strike over management’s plans to dismantle the group’s equal pay structure.

Defunct: Time Out stopped publishing its London print magazine last year

Emerging victorious but financially bruised, Elliott, who died in 2020, would subsequently set about building Time Out into a global media powerhouse.

Annual guides on films, drugs, fashion and dining came out, a majority stake in fashion magazine I-D was bought, and a massive overseas expansion programme was initiated.

Time Out New York began appearing on stands in 1995, the same year its London forebear hit a record circulation of 110,500, and the firm launched its website.

The new millennium saw magazine franchises arrive in dozens of cities, from Istanbul to Beijing, Tel Aviv, Sydney and Singapore, and Time Out even start an online dating service.

However, the internet was to become something of an enemy for the company as sales went into reverse and advertising revenues were gutted amid a proliferation of free media and the global financial crisis.

After remortgaging his house to satisfy Lloyds Bank, Elliott ended his long refusal to accept outside investment – which had curbed Time Out’s capital – by selling a 50 per cent stake to venture capital investor Oakley Capital in January 2010.

Now debt-free, the print operation was slimmed down; the London mag became free, and some yearly guides were discontinued as the group decided to further develop the digital side and diversify into hospitality.

Time Out Lisbon, a food hall where diners can choose to drink a Beirao liqueur or eat delicacies 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 them all to be closed or subject to onerous social distancing restrictions.

Getting them back up and running was a problem in and of itself, says Chris Ohlund.

‘Whilst the brand made the most of the situation, pivoting to ‘Time In,’ the major 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 again, travel more, look to enjoy more experiences and explore cities.’

Change: ‘To drive the business forward, you sometimes have to be ready to let go of elements of your portfolio that no longer feel like the future,’ says Time Out CEO Chris Ohlund (pictured)

But, he adds: ‘Due to our business model, strong brand, dedicated workforce, supportive partners and customers and our experience-hungry global audience, we were able to overcome the challenges that existed in 2021 and go from strength to strength.’

Despite this, the group’s latest six-month results showed losses jumping by almost a quarter, reflecting the increased activity in its markets, as well as the costs of staff redundancies and debt interest.

Time Out has not made an annual profit since being a listed company, and its net debts soared from just £4.8million in 2018 to over £52.7million at the end of last year.

Anna Barnfather believes deleveraging the balance sheet represents one of the greatest difficulties facing the firm due to the cash needed to service the debt.

In addition, she said Time Out faces the obstacle of ‘getting critical mass in markets’ and controlling costs due to the geographic spread of the markets division.

To Ohlund, though, ‘there aren’t as many challenges remaining as there are opportunities present, and we feel this is just the beginning.

‘So while we have seen continued momentum…we still have much to do, and we must continue to innovate, evolve and remain the brand people turn to for the best of the city.’

The London print magazine may have gone, but popularity-wise, the business has seen its online audience continue multiplying, reaching 73.1 million per month at last count, a 28 per cent increase on 2019 volumes.

Yet even if digital may be the future of media, people still crave the need to socialise over a burger or beer, something that has changed little since the first Time Out London edition listed health food restaurants under a section labelled ‘Rabbit Food.’

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

For the markets business to steadily grow, it needs the right locations, managing partners and constant reinvention ‘to keep it fresh, exciting and relevant,’ says Fiona Orford-Williams, a senior analyst at Edison Group. 

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

Nonetheless, the company’s association with going out and enjoying yourself makes it well-placed to attract advertisers and businesses operating in the markets.

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

It is hard to imagine that going away, whatever changes the firm decides to pursue.