Car Collector Future Tied to Investor Durham

Sources indicate that Car Collector may be in survival mode due to the financial travails effecting investor Timothy Durham.

Durham manages investment firm Obsidian Enterprises with positions in a number of Indianapolis-based companies along with National Lampoon and Car Collector. Reports suggest that several of Durham’s vintage cars were recently sold in order to subsidize under-performing assets.

Car Collector was launched in 1978 and has a reported 2008 USPS 3526 circulation of 16,790, about even from the prior year.

Separately, Durham is subject to litigation with respect to his involvement with telecommunications company Brightpoint, Inc.

Attempts to reach publisher Jeff Broadus regarding this post were unsuccessful.

Related from April 2008: Car Collector to Expand.

August 2010… Car Collector ceases publication. Durham factor scares off potential buyers and questions arise over the publication’s financial and circulation figures.

March 2011… Investor Tim Durham arrested on charges of fraud.

Popularity: 3% [?]

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  1. Eric,

    As you know, the future of any print publication is tied to revenue. In the US, the majority of print revenue comes from advertising. It doesn’t take a rocket scientist to figure out that there’s no money in $10 annual subs.

    While print ads were down across the board in 2008, Car Collector had a record breaking year, without raising rates. That would be a 30 year record.

    I think it was 2005 when you told me Car Collector would be out of business in two years. I’m wondering if you’re just connecting the wrong dots (HMN is in trouble because they sell the trucks they no longer use?), or is this is just wishful thinking. I haven’t spent hours here, but I’ve done some reading, and I’m wondering if you have anything good to say about anyone in print.

    I liked your HMN-Edsel post, although I’d be quick to point out that has traffic that most of the “print is dead” crowd can only dream of.

    I’d be interested in hearing your opinion of Car Collector’s digital strategy. Since November, they have posted the entire contents of Car Collector Magazine on Free access, no membership required. Their traffic tripled in November, and has grown since the November relaunch. Their digital edition (flip page version) is free, and is available before it hits subscribers. The August digital edition was read by 7,752 people and achieved a 30% advertiser click thru rate. Any bloggers in the “print is dead” crowd have a 30% click thru rate on their banner ads?

    I look forward to your response.

  2. Jim… thanks for your comments. I don’t recall our meeting nor my remarks about CC, but I’ll accept your recollection.

    Lets be frank, CC has been sustained over the years due to the financial support of backers with either a personal interest, a place to park their surplus cash, or both. A 4-color perfect-bound mag with a subscriber base in the teens, reliant on lifestyle advertising, and a 12-person staff… all aimed at the concours crowd, cannot make money.

    HMN’s web traffic, like anyone’s, is only as good as its contribution to the bottom line, right? I am reminded of the time-honored phrase “Dead Cow Bounce,” where activity does not necessarily equate to success. Eyeballs and page views are not the same as retention rates and monetization of traffic. When you can’t email a Hemmings seller from a posted classified ad, or be expected to figure out a dysfunctional web navigation system due to print and web at cross-purposes, that’s a BIG problem.

    As for CC’s web strategy? I think the above addresses that question. Digital versions of printed magazines have demonstrated a clear inability to compete with web pure plays (more on this in a future post). More to the point, however, in a publishing model where content is king and readers are a much needed source of revenue: If it’s free it ain’t worth anything.

    I know that CC publisher Jeff Broadus has worked hard for many years to ensure CC’s success and I sincerely hope CC will prosper in whatever future form it might be. And please also note that I attempted to reach Jeff on several occasions to confirm this story and received no response.

  3. “More to the point, however, in a publishing model where content is king and readers are a much needed source of revenue: If it’s free it ain’t worth anything.”

    Eric-you trash OCW for selling what is free (and valuable, in your eyes) elsewhere, and then say that free has no value. This blog is free and therefore worthless?

    It makes no difference to an advertiser who is contacted by a reader of Car Collector whether the person on the other end of the phone is a paid subscriber, someone who received a free issue at Pebble, Amelia Island, Meadow Brook, etc, a visitor to, or a reader of the free digital edition.

    Car Collector is in the content distribution business. Part of that content is advertising, which pays the bills. I would think that you would applaud them for their multi-platform distribution model.

    Their audience and advertisers do.

    I think that your audience has no trouble seeing the inconsistencies in your argument.

  4. It’s not complicated.

    1.) OCW’s online service is overpriced. Great info, but the price structure is wildly out of touch with reality. Make it a sub-based program, say $19.97/year for unlimited access, and you might have something. As configured the program will never achieve critical mass.

    2.) My blog operates under an entirely different model than a paid publication. Consultant blogs are a marketing tool to drive client work. Do that in the publishing game then you better have another revenue stream.

    3.) To your point, advertising “pays the bills,” but unfortunately that leg of the stool is rapidly vanishing from print. Compare any of today’s mainstream mag issues such as Road & Track to their ad content just two years ago and see for yourself.

    Finally, it makes a considerable difference where the ad inquiry originates… a paid subscriber is simply more committed and has already voted with their pocketbook. A walk-by from Amelia is down the food chain.

  5. Eric,

    1) My point regarding your OCW post was this line- “an audience becoming increasingly satisfied with free online info”, which sort of contradicts this line-”If it’s free it ain’t worth anything.“

    2) Replace “This blog is free and therefore worthless?” with the free online resource of your choice.

    3) Your last statement proves how much you don’t get it. Advertisers don’t ask callers, “you paid to read our ad, right?” We aren’t talking about free distribution at the local flea market.

    When did Amelia become an open gate event attracting impoverished wannabes? I suppose the recipients of the free in room copy of Car Collector at The Lodge, Spanish Bay, and Casa Palmero @ Pebble are down the food chain as well.

    Mainstream and niche are apples and oranges, BTW, and have nothing to do with the conversation.

  6. Paid subs top the devoted customer list on a given subject area, followed by episodic newsstand, free trials, and so on. They act accordingly when patronizing advertisers. A paid sub to Rod & Custom is more likely to buy Pertronix ignition products from an R&C advertiser than someone who picks up a freebie copy at a street rod show. My observation is grounded in the behaviorial aspects of customers and not necessarily their net worth, 25 years publishing to business and consumer audiences, and a body of results from countless publishers over the years. Just because a high-roller grabs CC at Pebble doesn’t means he’ll dial 1-800-Floor-Mats from one of your advertisers.

    Look, print advertising has left the building, and even the most niche-oriented content is readily available online months ahead of print production dates. The newsstand network is in shambles, and how many publishers today will rent their names so others can direct-mail for paid subs? And don’t get me started on compiled lists. So whaddayya got left? A “publishers” website?

    Ask yourself: Is content characterized by WANT to know, or NEED to know? Can you supply meaty info not readily available elsewhere? Do significant barriers to entry exist with respect to competitors duplicating your news gathering techniques and access to sources?

    As I will describe in an upcoming post, the future of magazines can best be considered by the next generation of car buyers weened on iPods, Facebook, Twitter, smartphones, the Web, and whatever else grabs their gut. These future “readers” are not patronizing newsstands. They never heard of CC, Automobile Quarterly, or even Road & Track. And it’s too damn costly to attempt to capture their sub dollars. Publishers’ best chance to remain in business is to accept the inevitable mudslide and re-jig to deliver unique paid online content.

    Call it pub bashing or whatever, show me an industry more deserving of a wake-up call. If you don’t embrace this concept then I assume you also don’t read movie/food/book/restaurant reviews. If just a few of our collective ruminations published at this blog accrue to the benefit of others then perhaps a little controversy is justified.

    Don’t take it from me, check out the remarks by Ryan Douthit from MediaSpigot…

  7. Eric,

    1800-Floor-mats. I guess that’s one of the lifestyle advertisers you referred to above.

    As you know, Car Collector is a client of mine. You’ve been pub bashing for years, so nothing on this site surprises me. HMN is in trouble because they sell equipment they replaced. Perhaps your limited audience knows that you were kidding, but I have no idea. I just know that you want them to fail. A well known collector who has a financial interest in CCM sells some cars and is involved in litigation, and CCM is in survival mode. This is just irresponsible speculation based on your agenda.

    In the collector niche, print advertising has not left the building, nor should it, as the effectiveness of print advertising is well documented. Should firms buy google adwords? Yes. Will their google adword response support their business? No.

    You have a limited view of the future of content distribution, which will include print, and, as you said, anything that grabs their gut. A publisher’s job as a distributor of content is to ensure that readers can consume their content on the platform of their choice. CCM is probably the most forward thinking player in the niche, and will provide content on platforms you’re not yet aware of. It’s not digital edition vs print vs web vs mobile. A smart publisher will use every platform available. I’m sure that’s the advice you give your clients. If not, they’re simply moving all of their eggs from one basket to another.

    Since I’m on your spam list, I look forward to your authoritative blogpost on the future of magazines. I’m sure you’ll hear from me then, and we can continue to talk past each other. Just to save you a few keystrokes, save the speculation and common knowledge, such as newsstands for your clients.

  8. J… A central figure at CC, whose name I will not divulge (for the sake of his interests), said to me in person early July: “We’re fighting to stay alive.” Hemmings circ is down 25% from last year and their digital policy precludes issuing online versions until print copies are mailed. Last I checked we were living in 2009. When pure web plays adopt your hallowed multi-platform strategy I’ll buy the argument for spending a disproportionate percentage of resources for print’s minimal returns.

  9. Eric-bull. There’s one central figure at CCM who’s name starts with J. He didn’t leave Florida in early July. After this post you suddenly care about the interests of CCM?

    Everyone at the CCM corp offices has had your number for years. You have zero inside information on CCM, and lose credibility with every word you type.

    Your pure play song proves my egg/basket statement above. You’re exactly what you accuse print publishers of being-a one trick pony.

    Let’s talk in five years and play who’s the dinosaur.

  10. You’re absolutely correct, July is not the date. I felt it would be harmful to date-stamp the details of my conversation with the subject source from a certain judge’s breakfast, and a conversation with the individual who bought Durham’s cars (and why). And I won’t be goaded into exposing information that could be harmful to a potential acquisition. Are you the self-appointed spokesperson for CC? If so, I’d suggest updating your resume.

  11. Eric,

    I am in no way a spokesperson for Car Collector.

    This has to end at some point. You have the last word.

  12. As a guy at a niche (HMN) book, I disagree with the statement that, “even the most niche-oriented content is readily available online months ahead of print production dates.” HMN itself may be down, but the HMN buff book titles are not; in fact, Sports & Exotic and Classic Car were the #1 and #4 circ gainers among ALL auto titles in 2008, and will improve upon that again in 2009.

    When the content is truly original, and completely unavailable elsewhere, I truly believe there is a place for print, because the fundamental experience is so much more pleasant than a web-based title.

    That certainly doesn’t mean that a company with a still-successful print title shouldn’t be hell for leather in search of online components to the business, but a blanket “print is dead” statement isn’t quite accurate.

  13. Phil.. Thank you for the comments.

    The boutique titles you speak of are indeed impressive at least from a production values- and, arguably, a content-perspective, but can they hold their own in a receding paid advertising reality? And with 12X sub prices for many titles dropping below ten bucks, well, do the math.

    Fewer and fewer auto enthusiasts will pay for warm + fuzzy prose and dazzling photo spreads, nice as they are. And the demographics suggest that our kids won’t be visiting the newsstand very often. Print may not be dead, but it’s surely “resting,” as the saying goes.

    As I’ve said in prior posts, when you see web pure plays launch magazines there’s a good argument for print as a component to a multi-channel strategy. The fact a publisher currently prints is no justification to continue down a dead end particularly when the inflection point shows lower returns for higher dollars invested. With an obvious trend towards electronic distribution publishers simply cannot afford to compromise their web initiatives with print-centric policies. HMN’s reliance on eZines, a web interface that attempts to sell both online benefits and print subscriptions, and a delayed digital edition delivery system is a great example of what might have worked before blogs, FaceBook, and smartphones, let alone the inherent flaws of such a dated approach. Meanwhile, web content providers are stealing the show.

    Speaking of content, when were you folks planning to send an email bulletin alerting your readers about the Kruse Auction scam? It’s big news and your customers deserve a head’s up.

    FYI… Confidential sources have remarked that Sports & Exotic is slated for a “revised production schedule,” or possible closure. Any updates?

  14. Ah, dude. Tough times.

    A) Kruse. They’re kind of hoping they’ll cough up some of the huge pile of dough they owe.

    B) S&E. Issues are still being scheduled for the foreseeable future. I expect that despite the dearth of advertising it’ll survive as long as the circ stays up. It’s approaching the level at which it can survive on subs alone. Readers, interestingly, consider the Big Four its competition–R&T, primarily, so if, say Automobile goes tits-up, it should pick up a bounce from them. And people genuinely do appreciate not having to wade through endless pages of Tire Rack and Weathertech ads, as profitable as they are. I had a $8 for two years Car & Driver offer, which devalues the title. Holding the line on subs does mean something.

    I think you’re overly optimistic on digital pubs. They’re convenient, but they suck balls to read. Big sweaty ones. I have 37 subs though Zinio–37, including Playboy, with 398 total tiles in the online library. I look at them maybe once a month. But I’ll sit down and read PopSci cover to cover the day it comes in, or even MotorTrend.

  15. Waiting for the news to get better is no excuse. If WSJ and NYT adopted the Hemmings mentality we’d just be learning about Bernie Madoff. Dude, print the facts and do your readers a favor.

    S&E climbed from 33,900 to 39,300 total paid circ between 2007 and 2008, a 15% jump. Not bad. Imagine the uptick had HMN used an effective DM package versus an uninspired self-mailer? How many were trials versus cash-withs? And what’s the trial conversion stat’s over comparable time periods, plus the all-telling renewal rate? Higher sub prices suggest newsletter economics, a good thing to help separate the men from the boys, but will the new media reality allow? And let’s collectively recognize the cheapo mentality of Euro trash collectors particularly fans of Joseph Lucas. That market has tanked and the owners have pretty much traded in their Moss Motors charge accounts for long term storage bins.

    I don’t recall suggesting any optimism whatsoever for digital pubs! I agree, they suck. EZines were inadequate five years ago and do little else than to delude publishers into thinking they’re competitive. Hemmings would have better served its audience by avoiding that DOA initiative entirely but I’m not accountable to ACBJ exec’s, thank goodness.

    Thanks for your great comments, keep ‘em comin!

  16. And they’re now gone, thanks to no ad sales and a crash in circ. Look for something official soon.

  17. “They” being Car Collector. Whoops.

  18. CC has been shopped to a number of potential buyers in recent months to no avail. Yes, low circ and diminishing ad rev’s certainly contributed to its decline. Yet investor Tim Durham’s low rent Ponzi scheme perhaps did more to taint the goods than anything the market might force upon it.

  19. It’s officially over for CC. Publisher Jeff Broadus has moved on to the insurance biz (good luck, Jeff!), and investor Durham continues his manic asset sell-off courtesy of the FBI. In a related event, last year’s Auburn ACD Museum benefit auction is where Durham allegedly conspired with dealer Mark Hyman to hype his (well, someone’s) Duesenberg. Despite the buyer paying 3X over market, the buyer was unable to obtain clear title, which set off a litiguous chain reaction to identify and hold accountable the offending parties. Buyer risks losing his $3M Duesy at current estimated market value $800K, Durham another count of fraud, and Hyman his dealer’s license. Well, you won’t read about it in CC and truthfully my heart goes out to the publication’s staff who worked diligently over the years to buck the online juggernaut.

  20. The issue with Car Collector Magazine was the publishers poor management. It’s good that he got out of the business. While his company and subscribers suffered Jeff spent the budget jet setting with bud’s like time durham…trying to be the ‘Big Man’.
    Poor Jeff, tried so hard…
    He was taking money from subscribers saving his own ass when he knew he was never going to send an issue.
    He raped his foreign subscriber base..ask anyone from canada..and that was a year or two before he closed
    Fact is that any company that Jeff owned failed miserably due to fiscal irresponsibility.
    If Durham hadn’t been bankrolling Car Collector it would have closed many years previous, the company never showed a profit and at one point under Jeffs negligent management had as few a 5,000 paid subscribers a number that was hugely inflated to attract possible advertisers and in publisher statements to more than 30,000
    Jeff is getting what he deserves.

  21. A number of buyers were spurned from acquiring CC even as the wolf arrived at the door. Ultimately its assets were tainted from the Durham factor, yet a healthy publication would have survived the investor’s disappearing wallet. And today it got even worse for the once high-flying Indiana businessman.

  22. You’re right Eric, in fact the year that we closed shop was the first year that Car collector was in the black in five years. That was only due to my constant prodding to bring expenses in-line and the fact that the publication wasn’t paying print bills etc. The interesting thing to see now is whether or not the publisher will be held complicit in the fraud. While Car Collector was showing a loss of up to 200k per year the same amount was being squandered on non-profitable trade shows, while Fair Holdings was essentially footing the tab via loans to the company.

  23. Actually it was Jeff’s poor judgement and that of the VP Patrick Gallant. He (Pat)and his wife were on a seek and destroy mission to push the business under because he wanted to start his own online car site. He even went as far as to recruit the broker they were using as well as try to recruit some of the sales staff. He then used client list and prospect lists of sales people and failed miserably. He single handedly destroyed a $40,000 a month sales operation by his treatment of the sales staff and manager. He figured if he could drop sales low enough long enough that Jeff would give up on the brokerdge side of the website and magazine.
    Then the Durham situation happened. From there on out it was like watching a train wreck in slow motion.

  24. RIP Car collector.
    Regardless of poor management and petty differences, Car collector was a Top Notch publication that just couldn’t find enough subscribers in it’s niche. It was a pleasure working with the entire team, who always pulled together to bring the reader exceptional content. We can say a lot about the publisher, but at the end of the day we have to credit him with creating a great book!

    Abe, I wish you peace and freedom from your delusional, tormented mind.

  25. Poor Patrick. It’s all true and you know it. Your incompitent wife then drove Waterford Media into the ground after. How was your visit with the FBI Pat? Would have loved to see your faces when i won my IRS case from you guys ripping off your sales staff.
    It’s fun to watch you shuffle up goldenrod road looking like a homeless person without even a car to your name. You underestemated me. Bad move. That was just the start. Just how much were you involved when CCM was illegaly operating after the cease order came in? Knowlege of an illegal act is just as guilty as commiting the crime. You had all the insde info and you guys told us to keep selling that everything was fine. Oh and how fun was that when you accesed the subscription departments email and told subscribers they would get their magazine when hell froze over on your drunken binge? Almost as much fun as when you copied CCM customer info for your own use.(illegal)Used it all for Waterford Media sales purposes. Your using it now for your new site.I got lots of good stories. Lots of people would love to hear em.

    How was your visit with the FBI Pat?

  26. And how exciting. I see that Jeff has reinstated the Bussines liscence of Car Collector Magazine LLC in FL back in July. As well as you starting up ICARCLASSICS on the web. How intresting indeed.

  27. weird. Jeff Broadus is still registering Car Collector Magazine llc alive as a registered business. any comments?

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