Update: Bob Findlay Chairman has purchased the trade and assets of the business and rebirthed as Findlay Media. Business as usual apparently.
Perhaps the first Oh My God moment of the year, Findlay Publications has gone into administration. Findlay has been the doyen of manufacturing and engineering publishing for more than thirty years. It led the way in the UK with sophisiticated controlled circulation publishing. Founder, Bob, retired just a couple of years ago keeping his ownership of stately Franks Hall which used to be the main office.
Moles tell me that the business will or is likely to emerge from administration in some form. Any news gratefully received either in comment or by email at firstname.lastname@example.org
Is this a failure of innovation, the demise of manufacturing, lack of investment in people and new digital products, or just rotten bad luck?
The first signs of the cull at RBI are emerging. The Guardian reports that 35 redundancies have been announced at UK RBI. At first I thought this must be a mistake and that they have left the zero off the end, but I have checked it out and apparently not.
However, in addition to the redundancies there is an effective hiring freeze so more jobs are likely to go. Also there has been a slow drip, if that is the right word, of redundancies and non replacements over the last few months.
However, whilst no one wants to see people lose their jobs, the plan needs to be more radical than this. Maybe it is.
The Times has been reporting on the woes facing 3i owned VNU. You will remember that 3i bought VNU at the top of the market, selling off the Nielson business and seperately the UK business to Incisive Media. It is said that 3i are about to break their bank covenants which means only two solutions are available. Either 3i must put in some more equity, or the banks will seek a debt for equity swap.
3i have apparently said they won't do the former so the latter is feeling liek a bit of a certainty. All debt leverage business media companies must be worried, Incisive Media, backed by Apax has around £400m of debt, Informa too. The EMAP deal has debt also. On a smaller scale so does Ocean Media.
Banks may demand the sale of assets to generate cash as an alternative or complementary approach to deby/equity swaps. If any of this happens no one will want any of this in the public domain if at all possible. To be clear, I am not saying this will happen to other comapnies as it appears to be happenning to VNU, but no one would be surprised if near term strategies for these businesses were determined by shrot time financing concerns rather than strategic vision.
All the more reason to be believe that the winners in five years time in the battle to be the business media company of the future have not yet been identified.
All of the business media publishers are facing unprecedented challenges. The economic downturn, long term decline in magazine profitability, a threat to profits from events, the challenge of making money from the web and so on.
Publishers long since worked out that there was no competitive advantage in running their own circulation management systems or print plants. Exhibition organisers long since contracted out their on site registration. But why has nobody thought of eliminating permanent costs from other areas of hygiene activity?
One of the benefits of APax owning both Incisive and Emap was the merger synergies. They never happened as crunching the two businesses together would have required a refinancing of the whole deal - and you can understand why that didn't happen. But what is to stop these two businesses sharing back office overhead in finance. Locate the credit cotnrol desks for both businesses in a single location where labour is cheaper than in central London, with one group management providing services to both companies on a SLA.
If it could done for these two companies, why not invite RBI, UBM and Informa to join the party? Each party would own an equity stake in the service company which would be run on a cost plu basis, with any profits returned to the shareholders. Make an agrement to protect the confidetiality of data. Consider inviting smaller publishers to enjoy the benefits of the solution for a fee. Cost savings and a profit share too!
Business media comapnies have worked together before. Tower, the circ bureau grew its business in the nineties on the back of a concord agreement with a cadre of blue chip publishers. The Excel Exhibition Centre was built with funds secured from RBI Emap and UBM amongst others.
How big are the savings? Well lets imnagine that back office finance costs 5% of turnover. Lets pretend we could save 20% of that. If we could process £1b of turonver thats a saving of £10m a year or put another way - on a 10% average profit margin, the equivalent of offsetting £100m of revenue loss. Mmmm.
Paid Content is reporting that 7% of RBI staff are being laid off. This story is about the US division that includes Variety, but is surely the first signs of a wider cull of costs that will be ipacting on the UK too. Up until last week staff at RBI appeared none the wiser about the nature of the impending cuts but expect news very soon.
The ansswer for RBI is more fundamental than just cutting costs. A new way of publishing magazines must be found and/or a cutting down of the scale of the business to focus on activities and assets that have a good forward growth.
Good news for RBI owned Total Jobs which has topped the Hitwise rankings for most traffic in the online jobs market, beating Monster et al for the third year running.
Bad news for all of them however as Monster reports a fifth consecutive month of decline in job postings, including a massive 11% fall in December alone.
No surprise I guess that there are more people looking for fewer jobs.
Meanwhile, and arguably more surprising a number of b2b magazine launches announced this week, including Dennis launching a title for the b2b poker industry, whilst Centaur is continuing its process of culling underperforming magazines.
Note also a b2b mag launch in the finance sector, for wealth managers as online solution provider Citywire moves into dead trees for I think the first time. Amazing.
There has been a bit of rather odd, imho, discussion about the annonymity of some blogs about business media. John Welsh, in particular has been harshly critical of the practice.
He argues that without a byline such blogs should not be approved of. He has even gone so far as to remove links to blogs without attribution. Conversly, a comment to his article notes that The Economist has always published without bylines and this has been viewed as a strength.
There are not many B2B media blogs. Me, Private Frazer, Businessmedia,all post without bylines. I can't speak for the others (unless we are all the same people of course ;-)) but I can defend my own view.
1) You knowing the author might play to my vanity but I do not believe it would improve your appreciation of the story. It is possible the reverse might be true. I want you to read these words for what they are. You should not judge them because of what you may think you know about me.
2) Knowing the identity of the author would satisfy your curiosity but it wouldn't make the writing any better or worse. So why is annonymity so objectionable?
3) It is not true that knowledge of the authors identity confers authority. Whilst not overtly annonymous, I bet almost no one knows the author of the news read on the BBC? Or the writer of the Leader in The Times?
In short, blogging is not one thing, or one way of doing a thing. Some blogs are excellent and bylined. Some are truly awful and I wish I didn't know who had written them. The same applies to those that are annonymous.
Your judgement of this blog and others in the B2B blogosphere should be based on their content. Most of the feedback I have had suggests that judgement on this blog at least, is broadly favourable. Not all of you agree with me all the time. Some of you get quite cross. That's all fine. I am not doing this to make money, or to fan my not insignificant ego. I am doing this because I care about the future of our industry and I want us to challenge how we think about it. I want us to take our heads out of the sand and recognise the scale of the challenges we face. I want us to debate what we are doing and how we are doing it. I want us to say the unthinkable, challenge the immutable and support the irrefutable.
Apologies for the light posting. It has been a troublesome start to the New Year. A computer title, Computer Buyer, the lame sister title of Computer Shopper closed by Denis pubishing, Centaur closing and merging a couple of magazines are just two of the bad news stories that have already oozed out of the sector in the last couple of weeks.
Meanwhile Nexus Business Media has sold the last of its magazines to aggregator of old mags, Metropolis. Nexus has expunged its entire print portfolio in the last three years leaving it as a small but online and events only business. CEO, Neil Thackray has stepped down.
No news yet of the inevitable at RBI. Surely they haven't bottled it?
It has been pretty quiet in B2B land in the first week of the New Year as managers try and assess how bad the first quarter is going to be. Plans are being made for further redundancies in many of the b2b media houses. Meanwhile real concern is now being expressed about the outlook for trades shows. Peter Kirwan notes the recent Lex article (availale to FT subscribers only) which implies that the trade show model is structurally as well as cyclically damaged.
We have postulated for some time that the demise of print publishing will infect trade shows too. Attendances, as the FT points out, have been going down for some years. Meanwhile the cost of attendance for exhibitors is punishing. The UK is one of the most expensive places in the world to exhibit. A squeeze on budgets, an urge to avoid unecessary travel and a niggling doubt about the cost effectiveness of shows all bode ill. Thats one of the reasons that UBM is experimenting again with "virtual shows".
Rather as with magazines, the answer is to reinvent the trade show model. Most organisers will already tell you that a room with rows of booths is not the best way to win new visitors, but few organisers do much else.
Exhibitors don't want to exhibit. They want to meet potential customers and seed new orders. A growing area of interest for organisers is bespoke events where a tailored event solution is created for a customer. When an exibitor spends £20000 on a booth at a trade show they spend four times that on everything else (travel, stand design and build etc), most of it with contractors not with the organiser. If trade show companies thought about how to take the £100000 from the customer by building a bespoke event solution for them and their customers, new profits can be made.
Meanwhile, in the short term, expect a rough ride for this years rebooking of exhibitors at 2009 trade shows.
A Happy New Year to you all. Made any resolutions? Peter Preston of the BBC thinks that the only doubt about the economy this year is whether this will a bad recession or something much worse - at least thats what he said on the Today Programme this morning.
That sound like a good planning assumption to me.
Thanks to all of you who mailed over the holidays with thoughts and suggestions for what we might cover in the year to come. I'll try and take it all in to account as the story unfolds.