Meanwhile, Variety, which dealt with the new digital challengers in the trade space by walling off its online content, has largely disappeared from the conversation.
“In Variety’s case, it’s almost that we don’t even know it exists anymore,” a THR writer told us. “We don’t even care.”
According to the web traffic measuring service Quantcast, Variety’s online traffic of approximately 360,000 monthly readers is dwarfed by their competition. Web circulation may be down, but Kimberly Gebbett, Variety’s director of marketing, said the paywall has had other benefits like 6,000 new paid digital subscribers and an increase in paid print circulation.
“We believe our content is absolutely valuable enough to be paid for and our subscribers believe the same,” Ms. Gebbett said. “It’s absolutely profitable.”
Meanwhile, despite Ms. Finke’s success, insiders say all is not well in the House of Penske. Other sites owned by Penske Media Corporation, Hollywood Life, Movieline, Boy Genius Report and OnCars.com, aren’t enjoying similar growth, and the company recently suffered a spate of layoffs due to cash-flow problems. Morale is said to be low.
Focusing on lifestyle and gossip, Hollywood Life was launched by Ms. Fuller in the summer of 2009. Former employees say PMC has repeatedly had to warn the editor about budget overruns exacerbated by her lavish personal expenses.
We reached out to PMC for comment, and Mr. Penske emailed to tell us, “I feel very fortunate to be working with two of the most prolific and successful editors in entertainment journalism. Though Deadline and HollywoodLife are two separate businesses of PMC, and Nikki and Bonnie produce two very different editorial products each day—in their respective fields, there is no equal.”
According to multiple insiders, Ms. Fuller was repeatedly warned to get her budget in line. “They basically told her, between the freelancers and your expenses, it’s not working, so if you go over your budget, it’s coming out of your salary,” a former HollywoodLife employee said. “She spends a ton of money, she expenses every little thing,” our tipster added. “She’ll write ‘two dollars’ on a post-it and then she’ll be like, ‘This is from November, it was a coat check.’”
Our sources also said Ms. Fuller put family and friends on the payroll including one woman who was given a six-figure salary before being fired by PMC for chronic lateness and absenteeism. Sofia Fuller, Ms. Fuller’s college-age daughter, has also worked at HollywoodLife. Another former employee said Sofia also spent freely from her mother’s expense account.
“She said, ‘I went to go hook up with my boyfriend. I was so wasted that I expensed it to my mom’s account,” said our source.
Welcome to Hollywood.
Additional reporting by Aaron Gell
Update (4:47 p.m.): This story was updated to clarify current traffic statistics for THR.com, TVLine’s role in the web code lawsuit and Mr. Kapsch’s employment status.