Reader's Digest Expanding TV Marketing Of Music

The Reader's Digest Assn. is restructuring its North American books and home entertainment division--which sells books, music, and video--in a move to boost revenues and cut losses. At the same time, the company says it aims to expand areas that "show profit potential," including music sold via direct-response TV.

Pleasantville, N.Y.-based Reader's Digest is exiting the video business (except for children's product) and consolidating or reducing other divisions. About 100 jobs will be cut. It is also cutting back on direct-mail sweepstakes promotions; in the past, much of the company's music products were sold in association with such contests. Meanwhile, Reader's Digest is increasing sales of music via direct-response TV, a sector it began exploring in earnest last fall, according to a spokesman. He says Reader's Digest has had particular success with the patriotic music set "American Pride" and aims to "significantly" expand its TV offerings in the next year to up to 10 music titles.

For the quarter ended Dec. 31, 2001, the North American books and home entertainment division posted revenues of $210.9 million, down 14% from the year-earlier period. The unit began posting an operating loss at the end of fiscal 2001; the company says the losses were later exacerbated by the Sept. 11 terrorist attacks and the anthrax scare.