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Network Communications Inc.

NCI announces that it has opened restructuring discussions with its creditors

by drm on June 4, 2010

Yesterday we announced that our company, Network Communications, Inc. , had opened conversations with its creditors in order to restructure its balance sheet. The development was reported in Business Week and has appeared in numerous news outlets across the web.

The Business Week reporter did a balanced job in describing the situation. I think one quote sums it up pretty well.

“It’s not a company with a fundamentally broken business model,” McCarthy said. “It’s a company that’s gone through a radical adjustment in size.”

I’m not going to comment on the restructuring process. A lot of media companies, such as Reader’s Digest and Freedom Communications, have gone through restructurings the last two years, emerging successfully as viable businesses with manageable capital structures.

Right now we’re focusing on communicating clearly with our core constituents about what the announcement means for our business. The short answer is, It’s business as usual. NCI is in the enviable position of generating more than enough cash to fund its day-to-day operations.

To help spread that message, we sent out copies of our press release and a detailed Q&A to our employees and business partners. I’ve held a series of webinars to review the materials and address any specific questions. We’re also reaching out to our key vendors and customers.

I’ve also focused on another message: Our future is what we make of it.

The difficult market conditions of the past two years have driven us to be more disciplined, more resourceful and more innovative. This approach has borne tangible business results: We have expanded our customer relationships, we have built new products, we have strengthened existing products and we have managed in such a way that we’ve been able to sustain our business model. We’ve been able to do this because of the remarkable focus and commitment of the people who make a difference every day: The employees and independent distributors associated with the company.

Right now we are facing two basic facts. Unquestionably, an economic recovery is underway. Unquestionably, our customers have been shocked by the changes in their business and are reluctant to increase their marketing spend.

To rebuild our business, we need to help resolve the contradiction between those two facts. We can do this three ways:

We have to be in front of our customers and help them see that market has improved enough for them to feel confident that they will get a return on increasing their marketing spend;
We have to be fluent in explaining why our traditional businesses continue to provide value to our customers, in terms of visibility, leads and business results.
And we have to be energized in showing our customers how our innovative new services, particularly in Internet and social media marketing, can give them powerful ways to expand their brand footprint and build their business.

Executing on these three activities is the most important thing that we can do right now. That is how we will make our future.

A note: I have closed comments on this post because of the sensitive nature of this dialog. If you have any questions you can e-mail me at dmccarthy@nci.com.

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What I write about and why

by drm on July 27, 2009

A good blog has a central focus that allows it to advance a conversation, both within the confines of the blog and the broader scope of the topic, and that gives its readers a predictable and satisfying experience.

As the audience for this blog has grown, I’ve been sensitive to the fact that I’m not adhering to the discipline that makes a good blog.

So, I want to take a second and explain to those of you who’ve become recent followers what I write about and why.

First, I focus a lot on the intersection of traditional and new media, with an emphasis on finding a path to migrate a media franchise into a new, sustainable operating model. This focus Is a by-product of my job and my background. I’ve worked in media for the past 25 years, and have been particularly fascinated by the way new technology has transformed the media marketplace. I’m not a technologist, though; I’m an analyst who became a business person, so I’m interested in the way market economics are transformed by the practical applications of technology.

I have a particular interest in how to transition media brands. Why? The people who have worked hard over time to gain expertise in a market deserve the opportunity to grow with the market. It probably all boils down to the fact that, at my core, I’m a rational humanist.

As a by-product of my interest in the intersection of traditional and new media, I focus a lot on social media. Social media is an area where the ability of people to create knowledgeable and engaging content presents a transitional path that has been difficult to effect in previous iterations of Internet media. Also, I have an emerging sense that social media is the advent of a post-digital media marketplace, where the focus on technologies is reduced and the focus on connecting quality content with audiences across multiple platforms is enhanced.

Because of my interest in media, I also write about the intersection of marketing and media, particularly as it relates to using new technologies to measure the impact of marketing spend. Understanding how different marketing channels work for marketers in real dollars and cents is the key to creating a viable business strategy.

These topics are applied most specifically to the housing, multi-family and remodeling markets. This bias is the result of the focus of my business, Network Communications, Inc.

And finally, I write about the economy. In particular, I track the broad characteristics of this recession and the Implications for reconstituting the national and global economy. The role of the consumer, and their emotional orientation, is of particular interest, because I believe the human element is always most interesting.

Within this interest in the economy, I write a lot about trends in the housing market. This focus is purely selfish: our business prospects are highly dependent on the direction of the housing market.

I’m a business person, not an intellectual, and have very little schooling in economics and theory. When I try to piece together patterns I sense, or theorize about one trend or another, my focus is on the pragmatic — what can I put into action?

I can’t say that everything is particularly clear to me, nor that I am frequently right. And, as I think through issues, I come at them with the bias of someone who is working within the constraints of a traditional media company.

When I set out with this blog, the goal was to have a place to tease through the things that I was puzzling over.

By virtue of our different business initiatives, I’ve attracted a significant audience. I’m sensitive that I’m not delivering a consistent experience to the reader, by virtue of the eclectic focus of my posts. I hope this post, if you’ve read through it, helps tie the pieces together. And, I hope that as a reader you occasionally find something useful or thought-provoking.

Last, I’m quite aware that the name of the blog and the focus of the blog aren’t neatly aligned. I’m admiring of bloggers like Fred Wilson, of A VC, or David Amaro, of Logic+Emotion, who have named their blogs in such a way that is clear, useful and descriptive. I didn’t do that, for sure.

I’m open to suggestions, though. Any ideas?

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