I had never thought about it before, but it seems that B2B publishers may be managing the transition to an online business/distribution model much better than their consumer focused brethren. MediaPost is reporting results of the American Business Media’s 2009 Media Financial Survey, and business publishers are somehow replacing a lot of their offline magazine revenue with substantial online revenues.
While tota B2B publisher revenues were off about 2% from the 2007 to 2008, but this is much better than 16% decline in the traditional B2C newspaper and magazine market. From the report’s press release:
Online media benefited from the continued shift in ad dollars from magazines to online channels. Online display and search advertising, which accounts for more than 50% of total online revenue, gained 12.4% in 2008 versus 2007 and grew at a CAGR of 30.7% from 2006 to 2008. At the same, magazine net ad revenue declined (10.2%) in 2008 versus 2007 and fell at a CAGR of (4.9%) over the three‐year period.
Good for B2B publishers!
I guess the real questions are: 1) what are B2B publishers doing right and 2) can this be applied to B2C publishers.
I hope that this isn’t just because business content users were never trained to expect to get free content like consumers have been…
May 19th, 2009 at 5:14 pm
Healy,
Great insight within the media market place. As to both of your questions, what are your thoughts on the shear aspect of the incredible conveinence of online media? Most business people i know have a blackberry or an iphone, and honestly, internet is the primary source of business news/media for me and most of the people i know. It seems to be the conveinence of anywhere, anytime. How this can be applied to B2C? I would think an online push is the answer…
Blake Robbins
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May 19th, 2009 at 6:34 pm
I think there are at least two factors making it easy for business publishers to charge for their content:
1. What is the competition for that content?
In the consumer space, there is a lot of competition for the same content. In fact, I think any magazine or news paper that you find on a newsstand has competition. Customers have plenty of choice and price is dictated by the market – margins are thin making the business very vulnerable to external factors. There are of course exceptions like WSJ and that is why they are still able to charge for their print and online content. Consumer Reports is another example but again that is something we will have to wait and see how it survives Yelp/Amazon reviews and more.
2. What is the business model?
If the publisher derives majority of its revenues from advertising then they are definitely more vulnerable. If they are giving away free or almost free subscriptions to increase customer base then they are the first ones to go with the moving of content online. Classic examples include Business 2.0 magazine, InfoWorld and few others. They gave away subscriptions to increase their readership and then turned around and charged advertisers high rates.
If on the other hand, the publisher charged huge subscription fees then they will survive the online content push. A subscriber who is paying high fees is paying for the content and not the delivery mechanism. In fact, they may prefer getting it online Vs. offline since this makes for easy access, note taking, archiving and sharing. Examples include Harvard Business Review, McKinsey Journal, and New England Medical Journal.
Of course, there are few that might have figured out to balance advertising and subscriber fees. They could be niche magazines or have a huge brand following – wired and real simple come to mind. But again, it remains to be seen.
May 19th, 2009 at 7:56 pm
I am thinking that more of the issue is around revenue model vs. the distribution model, but I may be wrong.