A report on last weeks closing of Miami based publisher Zoom Media Group based on Portada® and third party interviews.
Why did Zoom Media Group fold?
Last Wednesday, 5-year-old Zoom Media told its roughly 25 employees they were fired. Venezuela's Manduca Media, which bought approximately 60 percent of Zoom Media and assumed management control two years ago, had decided to stop investing in the company. Manduca owns El Universal, one of Venezuela's largest daily newspapers.
“There has been no official word from the shareholders on the reasons for this decision and there was absolutely no advanced warning given to employees or the advertising community,” said Zoom Media Group's advertising director Alonzo Smith. “I have been advised that it is closed and I no longer have a job,” said Smith.
Will Loft and Poder stop being published?
Sources at Zoom Media Group interviewed by Portada® said it was unlikely that Loft and Poder would continue to be published. “I haven't received any information regarding future issues – I'm told the operation has ceased,” says Zoom Media Group's Alonzo Smith. “We don't know if the company is being dissolved, sold or what,” Rosa Alonso, group publisher of Zoom Media Group, told The Miami Herald.
However, Isac Lee, chief editor of Loft and Poder, said he remains optimistic that the magazines can still be salvaged. “There are media tycoons who understand the value of a having a good editorial team and an established space in the Hispanic market,” he said. “The important thing is the people. Talent is mobile.” A growing number of venture capital and private equity funds are looking to invest in Hispanic media. A publishing platform like Zoom Media Group could attract strategic or financial investors.
How were Loft and Poder magazines doing?
Both magazines were still in the red, but were growing considerably according to Alonzo Smith. “The advance sales for the October issues promised the largest advertiser supported editions ever.”
Loft had recently acquired large national automotive accounts (Mercedes Benz) and Poder had recently won the Merrill Lynch account. (The asset management house advertised in the July/August and September issues). During the period from April 2004 to March 2005, Poder's Miami edition increased advertising revenue by 441.2% to US $929,800 compared to the prior year, according to HispanicMagazineMonitor. Poder's U.S. edition had increased ad-sales by 446% to US $916,200.
Advertising director Alonzo Smith said he worked hard to turn these magazines, originally dependent on Miami real estate and local venues, around. “It became my obsession to build and expand national advertising. I was confident that we had turned the corner to success. Sales were going strong,” says Smith. “We were focusing on growing circulation in key markets in order to move away from the perception of the magazines as Miami publications. We were being audited by ABC and shifting from proprietary research to syndicated research. In the last six months all of these areas had been addressed and both magazines were just now breaking the all important 100,000 circulation mark that makes advertisers respect publications as serious players in the magazine business,” says Smith.
Earlier this year, Mexican publisher Editorial Televisa teamed up with Poder's Mexican edition and had recently increased the magazine's frequency to biweekly.
How did Zoom Media Group start out?
Zoom Media was founded in 2000 with $4 million in start-up funds from Wall Street venture capitalists and private investors. Its goal was to chronicle the Latin American Internet explosion with the magazine punto-com, which means dot-com in Spanish. With the Internet boom bust, the company changed the name of punto-com to Poder, which was initially published in Spanish for the U.S., Mexican, Colombian and Venezuelan markets. Later two English editions – a U.S. national edition, as well as a Miami edition – were added. In 2002, Zoom launched Loft, a U.S. and Latin American glossy men's magazine.
How does this affect the Hispanic magazine publishing market?
In the midst of a booming Hispanic publishing market, Zoom Media Group's closure is the second major loss in the U.S. Hispanic market this year. In the spring, Conde Nast announced that it would stop publishing U.S. Hispanic editions of its magazines and move the bulk of its Spanish-language operations to Mexico City. The possible closure of Loft and Poder is good news for the competition in the business (Poder) and lifestyle magazine categories (Loft). Business magazines targeting Spanish-speaking audiences include Hispanic Business and Latino Leaders Magazine.
Editorial Televisa has announced plans to launch Tu Dinero this fall. The Mexican publishing house is also a majority owner in two business oriented publications: Hispanic Trends and Hispanic Magazine. Poder's main competitors in the Latin American (panregional) business magazine market are Latin Trade, Latin Finance and America Economia. LOFT competes with an increasing number of lifestyle magazines targeting Hispanic men.