It wasn't long ago we were mourning the demise of Press Gazette only to see it jolted back to life by Mike Danson. Now Media Week is to close. There will be no saviour. Haymarket has always taken the view that if they can't make a title work then no one can.
Haymarket bought the title some five years ago and has struggled to make sense of it. Having loathed it as a competitor for some years, it never sat warmly alongside Campaign.
Media Week is dead, not because there are no media planners working in ad agencies (its principle audience) but rather because it has failed to find a new revenue model to replace sales job ads and media company flag waving.
Revolution is also closing in all but name, as it becomes an occasional supplement rather than a stand alone title - and Revolution is supposed to be about the sexy bit of media. It only proves that even in relatively good markets, business mags will continue to struggle.
This closure, and that of Contract Journal are just two examples of what will happen to you if you fail to come up with a new business model. Nobody seems to be listening. This blog and others have warned about all this for two or three years - but unless you change fast this is not the end, not even the beginning of the end. It may not even be the end of the beginning.
They think its all over. But it isn't yet. Goldman Sachs has increased its share price target for a handful of busiiness media companies including Informa and Reed Elsevier. Does this mean as Press Gazette has speculated that we have turned the corner in this media recession? Erm no. The truth is that the share price damage done to the best of the business media companies has been overdone, and if you wanted a safe safe place to put your money, Reed Elsevier wouldn't be a bad bet (when compared to other media companies.)
But lets get real about what is going on here. The peak of the last cycle was around 2006. In that year Reeds share price peaked at 779. Today it is about 530. Pearson peaked at around 800 compared with 666 today. Informa was at about 500 in 2006 and today is at about 250. UBM (not mentioned in the Goldmans note) had a peak of around 750 in 2006 and trades at 415 today. What this tells us is that even these relatively blue chip stocks must improve by around 50% to recover their value. How likely is that in the forseeable future?
Take a look at the P/e ratios for the business media group. Reed already trades at 23, nearly twice the price of any of its peer group. No upside their without strong growth. UBM, Tarsus and Informa are all between 15 and 17 reflecting their common issues as event organisers (Informa would be stronger were it not for its debt mountain). Centaur, Huveaux and ITE are all in the range 6-10; not bargains I am afraid, but rather a reflection of their even weaker prospects for revenue growth any time soon.
Cost cutting will ensure a stabilisation of profits. Revenue decline may slow or stop, but investors expecting a return to average revenue growth rates are goingto be disappointed in the short to medium term
Zombie Publishing as Lightening Strikes Press Gazette
Zombie publishing is alive and well. Press Gazette has raised itself from its grave and now stalks the media world again. Five years ago Quantum Business Media sold PG to messrs Morgan and Freud for a rumoured sub £1m sum, who within a short space of time found that the press would not support the awards in their ownership and the title could not afford the costs of Morgans publishing model.
The company fell into administration and the closure of PG was inevitable - until Wilmington, pressed by the enthusiasm of a former PG exec Tony Loynes, bought the title for a rumoured £100,000. Before long, Tony Loynes had gone, the title had gone weekly and staff cut to the bone. Wilmington could take it no longer and a nano second after trousering the profits from this years Press Awards announced the closure of the title. Then along comes the Frankenstein of publishing, Mike Danson. He is making a specialism of buying titles that others have struggled with and breathing some life into them. It is not clear how the Press Awards will work. Wilmington appear to be keeping some involvement. Danson may succeed where others have failed if he focusses on the digital delivery of a solution. Although the PG website is attracting reasonable traffic it has hitherto been a very Web 1.0 offering.
The magazine is a cueship. To turn the Zombie into a living breathing thing requires a complete focus on building a digital solution. Danson should not plan on making any meaningful profit from his dead tree.
We have had a while to digest the news of the demise of Press Gazette. The blogs have been full of epitaphs for the 43 year old title almost all regretting the demise.
Press Gazette is not a special case, merely an extreme manifestation of the malaise affecting the whole business media industry. The display advertising revenue is all but non existent. No one really believes that the readers of Press Gazette buy anything on the strength of an ad. Let's look at the history; The job advertising evaporates, condensing on numerous job boards, some of which are owned by the very companies PG is supposed to serve. With no jobs, the motivation to buy a copy or a subscription diminishes and circulation falls year after year. With no job ads the profits fall and journalists lose their jobs. The product gets weaker. No jobs and now less journalism. The circulation falls some more.
Avaliability and handling of the title is hurt as the retail news trade enforces range reviews which limit the number of stores where PG can be bought and successive publishers cut back on waste. Circulation keeps falling.
Display advertising shrinking to nothing, recruitment vanishes, paid copy sales diminishing. Costs chopped, journos fired. Prop up the profits with more events (PG ran the British Press Awards, the Student Journalism Awards. the Regional Press Awards, the Journalists Law Conference and more), eventually realise the mag is so unprofitable that the only way to cut more costs is to reduce frequency. This strategy works for a month or until the first management accounts are produced and everyone realises that some of the old rules still apply (In a growth market a monthly will be made more profitable by increasing it's frequency, but dropping frequency only makes things worse in a shrinking market.) Now there is nobody left to fire, no discretionary costs left to chop. Think for a while about an online only solution. Realise that there is still no revenue, and what is left from the mag will almost certainly shrink further without a print product. Further realise that so little has been done to invest in a decent CMS or understanding of how online media really works that the costs of building anything that looks credible are too high and will take too long to implement and be too expensive. Fire the remaining staff, close the magazine, announce an online solution, but even days after the announcement of the mag closure present no further information on your plans (because you don't really have any.) Quietly vanish.
It could be the story of any business mag. Be warned.
Meanwhile, who will now provide the service that PG once did. It's last editor, Dominic Ponsford has postulated that many of the stories he once pursued will not get written. As we would agree, he thinks his magazines demise is a "canary for the industry", Journalists trusted PG and would call with leads for stories. Jon Slattery and others have been debating whether there is some sort of argument for an online journalists hub. This is the reader community itself creating what they need. Ironically what they need is a publisher to sort it all out - one of the very people the readers blame for messing up PG.
Press Gazette reports ahead of Reed Elsevier's results that staff at RBI are holding a postal ballot on strike action to protest about redundancies.
Nobody likes to see job losses, but RBI has the what must be the most generous severance terms on the planet. The reality is that no media company can avoid job losses if it is to survive. RBI has a greater need than most to take an axe to its cost base. If the complaint is about the process that's one thing, if it is about the principle that's another. When it's raining there is no point in complaining that it's cloudy.
Press Gazette reports on the same story from the FT we comment on below. Cuts digging deep we fear at PG towers, They begin their piece, "The sale of Computing Week publisher Reed Business Information by parent company Reed Elsevier ...."
There is a mag called Computing and there is a mag called Computer Weekly - but there aint no such thing as a Computing Week.
Thats what you get with no subs and no regular coverage (knowledge) of what goes on in B2B. The first is a generic problem with online journalism and the second a weary jibe at the mainstream media media.
We noted the merger of IT Week and Computing a few weeks ago. Now its publisher Graham Harman, is interviewed in Press Gazette and his argument dissembled by Peter Kirwan.
Harman says lots of things in his interview with which this author would agree,
“You can’t just stick to the old practices and say ‘that will do’.” and
“You have to say to yourself: ‘If I was launching into this market now what would I do?’” and
“We have seen the writing on the wall the way that the revenue models and the way that the information needs of our readers has changed, and we’ve decided that we need to do this now"
What happens in the tech sector is often a lead indicator for what will happen in other b2b markets - so we should take all this seriously. Twenty years ago, the professional IT press was hugely profitable, with 50 to 100 pages of job ads published each week in each of the two main weekly titles. Today, Computing is a shadow of its former self with just a couple of pages of job ads and a declining display revenue.
I am beginning to think that Peter Kirwan and I should go into businsess together, as I find it hard, as usual, to disagree with his point that if Incisive was to act in the way its analysis suggests, the weekly magazine would be killed off today. No one, he argues, would launch a weekly IT title today so why keep the ailing beast alive? There is more to it than wanting to squeeze the last drop of profit from print though. There is also pride. Computing has fought a bitter war over thrity years with Reed rival CW and, rather like competing generals in WW1 trenches, nobody is going to give an inch to the other even nothing is to be gained by winning a point of share or foot of territory from the other.
What is need here is some management bravery and to honestly answer the challenge that Harman puts, which is, in terms, to imagine what you do if you were launching today - and then do that. It is only a question of time before Computing closes. It might not be this year or even next, but close it surely will. In the meantime huge management time and effort will be devoted to keeping its heart beating at the expense of developing the new model.
Incisive are showing the first signs of realising that the publishing game is up. Theyhave noticed that print is dying. They believe it but haven't yet come to terms with it. They have a real opportunity to set the lead and build a new future whilst their competitors are still pretending that this is just a cycle and a course of anti biotics will cure them. Will they take it? Will any of you?
Poor old Dominic Ponsford, Editor of Press Gazette, is getting a bit of pasting on his own blog from readers cross that they haven't been properly informed or that the cost of the new monthly edition is too much.
You can tell from Ponsfords reponses that he is pretty hacked off with the whole thing. First Roy Greenslade wails that its The Guardian what did em in, and then his own readers start bellyaching.
Well heres the truth. If journalists want independent commentary on their profession they had better pay for it, or advertise in it. The reason PG is in the mess its in, is because its readers won't pay and its advertisers have vamoosed.
Although its coverage of b2b is sparse at least it has a go every now and then. Remember that b2b employs around 10000 journalists - thats a lot more than the national press- so why PG doesn't pay more attention to it is a mystery to me.
If you want PG to continue, pay for it, or advertise in it, don't whinge about it. If you don't care and are happy to get your coverage from free blogs like this one, or Roy Greenslade or Stephen Glover then fine. If journalism.co.uk does it for you - then fine.
This blog and the media commentators are useful, intelligent, insightful, occasionally brilliant. (Ok I know I am getting carried away here) but none of us are a substitute for proper reporting. All of the media commentators, me included, come with an agenda. In my own case, I write for no one. I have no masters. I don't have to please my readers or represent their interests. What you say is what you get. Opinonated comment on the business media world we live in. If you don't like it I don't care and I don't need to. I am not your champion. PG can be. If you let it.
Wilmington, the owners of PG may have made a bit of shambles of the relaunch messaging and a twelve month sub for £115 seems very expensive, (in fact it is bonkers - the publisher has made a mistake in my view) but don't kill em for trying.
Press Gazette has confirmed that its frequency is dropping to monthly from weekly. PG has long been only barely profitable, and indeed lost money under the ownership of Piers Morgan. The drop in frequency has always been resisted in the past because it compromises the recruitment and subs revenue. Well the recruitment revenue has all but gone anyway and copy sales have been in decline for years.
As Ian Reeves,former Editor says, if the journalist community cannot support a magazine about the business of journalism, what hope is there for any of us.
The test for PG is whether they use this as an opportunity to improve the online offering with more frequent and analytical posts, more blogging, more deep linking, the introduction of tools for journalists, online training, rich media, or whether this is just a publisher Tony Loynes toy with no real vision.
Lets hope this is a vision thing not just a cost cut to keep the brand alive and continue to make money from the British Press Awards. If the national newspapers abandon the Awards, which they might, then it is all over for PG.
Press Gazette reports that PR Week has had a redesign. The mag has introduced a blue tag to show that a story can be followed up online and claims to have changed the print editorial to make it a " a round-up of the week’s stories and follow up key stories, providing more detail and analysis."
I agree that magazines need to change if they are to be relevant to an online world and I should therefore welcome this news, but:
A weekly news paper was always a round up of the weeks stories with some detail and analysis. Is this PR Week rethink a step far enough? Why not produce the equivalent of "The Week" for readers, with summaries of stories from all media in one place. Then add detailed analysis, comment etc.
Readers of magazines notice very little unless the change is dramatic. If you want to signal that you are really different, change everything, format, paper, style, sequencing of sections, the Editor, the strapline, the cover page - everything. Then the reader will notice.
The facsimile of the new PR Week and the old is shown at the top. Which one is the new one? They both look like traditional b2b news weeklies to me.
Still PG, of which I am very fond, has given up on asking questions it seems, and has just burped the content of the press release. I thought journalism was about taking what someone says and then testing its voracity with an alternate or challenging view. Apparently not. Silly old me.
I have been properly taken to task for a post from some time ago which reported on the near demise of Press Gazette. I said that it deserved to survive as it was the only credible independent review of journalism. I had of course forgotten about the credibly independent folk down at the seaside who produce journalism.co.uk.
My point was that without the likes of PG and journalism.co.uk we would be left with the partisan coverage of media in the national press. And who wants to get their media wisdom from Stephen Glover?
Apparently the Press Gazette is leading this week with headline "Boom-time for business media." I'll read the feature with interest but I fear the fine folk at PG may have swallowed what Nick Davies as called some "Flat Earth News". If this is a boom time for business media why did Huveaux have to abandon its sale process last year; why is RBI closing its healthcare magazines and laying off a further 16 people and warning of an uncertain year ahead? Why is Centaur share price trading at 25% below its float price of four years ago? There are some real opportunities in business media, but a boom time this isn't. The sub prime mortage market is worth a lot more than £23bn and that's not booming either.
Business to business commentary for a 21st century media world. Analysis of business magazines and business media, the impact of search, the web and the digital economy.
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