Variety Unveils Boffo Expansion Plan.

A few years ago, Variety only had its arch rival, The Hollywood Reporter, to worry about. Now it's competing with seemingly everybody.

Even as mainstream publications have beefed up their Hollywood coverage, a host of Web sites have popped up in the last year or two that are devoted to news and gossip about the entertainment industry. The result is a feverish expansion drive by Variety as the industry's oldest trade publication battles to master the newcomers.

"We are at a crossroads in the business," said Charles C. Koones, incoming publisher, who is spearheading a three-pronged strategy to keep Variety relevant in the era of the Internet.

The first is to maintain the paper's core businesses, its daily and weekly editions. The second will be to create new print publications, the first of which is eV, a magazine devoted to "Intertainment" and the digital economy. It will debut Sept. 12 and will attempt to penetrate an arena crowded with phonebook-sized magazines like Red Herring and-Business 2.0. The third prong of the campaign is developing Variety's online operation by expanding its news and data offerings.

In the process, Variety is engaged in a major physical expansion. The paper is adding an additional 15,000 square feet to its offices in the Miracle Mile district, to accommodate the staffs of eV, the paper's growing Web site Variety.com, and other corporate offices.

The drive to improve Variety.com is essentially a defensive one, as more Web sites offering Hollywood news appear. The latest is Inside.com, which some people have called "The Third Trade," a site staffed by some of the best entertainment journalists in the country.

"(Inside.com) is a good-looking site," Koones conceded. "But good is not good enough."

Inside.com's success is predicated on obtaining 100,000 paid subscribers, which, Koones and others believe, is a daunting task in the highly competitive Internet world.

Desirable demographic

"I can see why (Variety) wants to move into online," said John Miller, president of the NBC Agency, which places advertising in Hollywood trade papers for NBC divisions. "Traditional publications don't want to be left out of the technological revolution. It would be like being carbon paper in a Xerox world."

Koones, a 10-year veteran of Variety, has the title of group vice president in addition to being named publisher April 10. This means he oversees Variety, which is the weekly edition of the paper; Daily Variety; Daily Variety Gotham, a special New York edition; and Variety com. In March, Variety took over LA 411, a resource book for TV and film companies, and has begun to renovate that directory's-Web site

Koones estimates that the total package of publications and sites generates revenues of $80 million a year with an annual growth rate of 20 percent. While he would not disclose the company's profit margins, most experts agree they are fat. Koones said the average Variety reader earns $400,000 a year, is a 43-year-old male and has a rank of vice president or higher.

Not surprisingly, Robert J. Dowling, editor-in-chief and publisher of The Hollywood Reporter, said he isn't impressed with Variety's latest moves. Dowling put his paper on the Internet ahead of his rival. Last year he hired Anita Busch, whohad been one of the premier scoop journalists on Variety's film beat, as editor to beef up news coverage.

Stops and starts

To Dowling, Koones is just the latest in a string of Variety publishers he has been obliged to battle in his 12 years at The Hollywood Reporter. He is taking a wait-and-see attitude toward his rival's new moves like eV, in part, he says, because Variety has had a history of starting new products and then abandoning them.

"The fact they are doing new things doesn't impress me," Dowling said. 'They are the kings of promoting events. They always have new things. They have a lot of sizzle, but as the man said, 'Show me the meat.' I have never been impressed by a single thing Variety has ever done."

Media buyers are a good deal kinder. Pam McNeeley, a buyer for Dailey & Associates, said Variety's name recognition will help its newer ventures keep afloat.

"There is a lot of money out there, and they have a brand name that has credibility in the entertainment world," she said. "Content is king right now. Without content, there is no future in this industry."

Variety's world today is dramatically different from when Sime Silverman launched the trade paper in New York in 1905. Back then, Variety was a family-run publication that covered vaudeville and focused solely on New York.

Today, Variety is owned by Cahners, a division of the international media conglomerate Reed Elsevier Inc. It is edited by Peter Bart, a former movie executive and reporter for The Wall Street Journal and The New York Times. He combined the operations for the weekly and daily editions when he moved to Los Angeles in 1993.

"When I took over the weekly 11 years ago, it was losing $3 million a year," Bart said. "The problem we faced was that the founding generation had lost touch. The staff was elderly and inert and the daily and weekly hated each other. The papers were filled with fear and loathing. The cultures were different."