A recent New York Times article discusses the print magazine business and the rising number of casualties the recession has claimed.  This month has seen 14 magazines go under, including Country Home, Arthur, Vital Source, Map Magazine, and Teen.  Going down with the balance sheets, obviously, is each of those respective brands.  Effectively, each demise takes with it that brand’s intellectual property, including copyrights, trademarks, customer lists, subscription lists, vendor lists, and more.

Many smaller print-media magazines probably don’t have much overhead.  A few editors might be paid measly salaries, and production and distribution is probably outsourced.  Thus, in selling such a company, you are really selling a brand.  In the world of media, customers are mostly subscription-based.  Therefore, they are loyal.  In valuing such a company, you are really determining how much a brand is worth, as tangible assets are minimal.

This philosophy has been put to the test.  DoubleJump Books, owner and publisher of a small magazine, Hardcore Gamer, recently put the magazine up for sale on eBay.  The company offered prospective buyers the “copyrights, registered trademark rights, intellectual property rights, back issues, subscription lists, customer lists, vendor lists, employee contracts, distribution contacts, public relations contacts, advertising contacts, Web sites and domain names associated with Hardcore Gamer, including HardcoreGamer.com and around 30 other domain names.”  The asking price was $42,000, based on the previous years’ earnings.  Almost miraculously, an unnamed buyer contacted DoubleJump Books, told them to stop the auction, and offered more than the asking price.  Somebody must know how to value intellectual property!

In the discussions recently surfacing (see IP Valuation: But In Which Context) about valuing IP, this is a lay persons chance to understand the ambiguities in valuing IP.  If marketed just right, the name “Hardcore Gamer”, its copyrights to back issues, customer lists, and subscription lists, just might be worth multiples of $42,000.  Or, they may just be worth $42,000, a year’s profits that result from those IPRs.  Whether DoubleJump Books had used Hardcore Gamer’s intellectual property rights at an optimal level is unknown.  But the unnamed buyer is soon to find out, and maybe at a premium.

This entry was posted on Friday, January 30th, 2009 at 9:15 am.
Categories: Burgeoning Business, Copyright Caucus, Trademark Trends ~ by Ian McClure.

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