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Wednesday, December 10, 2008

Black,Black Black, Black

Paul Conley writes this visceral piece about the future of b2b. I make no apology for quoting from his summary,

"1. The B2B publishing industry -- which is now dominated by giant print companies and smaller Web-only companies -- is about to collapse.2. When the dust settles, B2B journalism will still be here -- but many of the companies that make up the industry will be gone.3. The dominant business models of both the past and present will fail."

The market has already decided this is so for many of the public companies. Centaur Media's share price hit a new all time low of 36p this morning, valuing it at around £50m - a third of its float price. They are not alone - just a bit ahead of the curve.

We have argued on this blog for some radical thinking to solve the problem but there is precious little evidence of anything other than cost cutting. When Steve Austin lost most his body parts in an accident the surgeons did not build the bionic man with an axe. The leaders of B2B companies cannot build a new model industry from the crash damaged cadavre of the old model with a cost axe either.

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At 12:53 pm, Anonymous Anonymous said...

Very doom & gloom. I don't agree.

It is true that B2B has had to adapt to the huge impact of online over the past 8 years. But this has largely been done successfully.

By a mixture of moving into the events space, and ensuring a targeted online offering, good B2B companies have maintained good levels of profitability.

We are now in a downturn, and it is hurting some sectors more than others. But that doesn't mean the medium/long term survival of B2B is at risk. As ever, our industry will need to continue adapting, but we will emerge from the downturn as strong as ever.

What is hurting some of the players most is the highly leveraged nature of those backed by private equity, given what has happened in the credit markets. They not only have to make profits, but need to make enough to cover high interest charges.

This is the model that will be tested, not the B2B model itself.

John Woods
MD, Perspective Publishing Limited

At 1:15 pm, Blogger Businessmediablogger said...

Mmm. Thanks for that interesting perspective and I agree that leveraged companies are the most vulnerable but the facts of the matter are that trade mags having been losing readers and advertisers for some years and have become less profitable. Online has not replaced that profit - at least not in the provision of online journalism (which is where Paul Conley is coming from). I argue that the magazine model has to change, the way the web model is deployed has to change. Doing events isn;t goingto change that. The current downturn has exposed the weakness of the current model.

I hope you are right when you say, "we will emerge from the downturn as strong as ever", but I expect you to be wrong.

Thanks for contributing.


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