(Editor's note: This is the third in a series on building a "B2B fighting hole." I'm expecting difficult financial times in trade journalism in 2008. In this series I offer some suggestions on building a defensive position where editors and publishers can ride out the coming onslaught. You can read the post that started the series here. You can read Tactic One here.)
In the history of warfare, there are two groups that have fallen from favor: mercenaries and privateers. But if, as I believe, B2B journalism is about to begin a tough financial period, I think we need our own versions of both.
In simplest terms, a mercenary fights for a paycheck and a privateer fights for a share of booty. But both share some significant traits. First, they fight by choice. It's even possible to argue that they like to fight. There's no need to worry about morale or motivation. Second, they are best used as a supplement to an existing fighting force. No one wants to be entirely dependent on for-hire fighters. But many nations have found advantage in employing them to take on some military tasks.
Magazine Mercenaries and Publishing Privateers
When revenue declines, publishers have few ways to keep their products afloat (and their staff employed.) The first choice is nearly always to freeze hiring. But not only does that tend to stretch the existing staff too thin, it also always makes it nearly impossible to launch new products that can generate revenue.
When the hiring freeze fails to help, many publishers turn to layoffs. But layoffs have the exact same negative results: the staff burns out and product development comes to a halt.
I suggest that the way for publishers to escape this downward spiral is by giving up some control and having mercenaries and privateers launch new products.
In particular, I think it's time for B2B companies to do two things:
1. hire offshore companies to do print layout and design work -- especially for new products and custom publications.
2. let freelancers and outside contractors run online products for a cut of the revenue -- particularly Web-only products and newsletters.
In the first scenario (call it the mercenary method), publishers can launch new print products at lower costs. And at least one department -- design -- doesn't have to take on additional duties. It is, of course, also possible to offshore other parts of the magazine process. Heck, at least in theory, even reporting and copy editing can be done by outside contractors in Asia. But I suspect that most B2B editors, publishers and executives aren't comfortable with that idea...at least to start. And I can't imagine a time when I'd ever feel comfortable offshoring reporting functions.
So I think it's a wiser move to begin by offshoring layout and design for new products and custom pubs. If things work out well, layout and design of other print products can also be offshored.
In the second scenario (call it the privateer play), publishers can launch new online products at no cost. By offering a revenue split to outside contractors, publishers can create limitless numbers of small, hyper-niche products. This is the business model of New York Times Digital's About.com (Disclosure: About is a client of mine.) About's network of sites are run by independent contractors who work for a share of revenue (with a base payment as a site ramps up.) The privateer play is also similar to the system used by Associated Content and some of the blogging networks.
I suspect that many editors are already working with freelancers who would consider such a deal. The key, of course, is to sell the privateer on the upside potential -- the more you work, the more inventory we have to sell, and the more both of us make.
(Disclosure: I feel so strongly that there are opportunities for both mercenaries and privateers in B2B that I've taken steps to position myself appropriately.
One of my newest clients is Mindworks Global Media, the India-based outsourcing company run by Tony Joseph, the former editor of India's largest business magazine. Tony's company does work for publishers around the world and recently won a contract with McClatchy's Miami Herald newspaper.
Furthermore, Paul Conley Consulting is now available to run editorial for Web sites, online newsletters and other electronic products on a contract or revenue-share basis. I'll be announcing some new deals here soon.
If you'd like to talk about how your company can benefit from mercenaries and privateers, drop me an email at inquire (at) paulconley (dot) com)
(Addendum: 1/15/08. Editor and Publisher is reporting that the Miami Herald has backed out of part of its deal with Mindworks. The Herald will continue to outsource "the production of some advertising sections and monitoring of website comments," according to E&P. )
tags: journalism, b2b, media, trade press, magazines, newsletters, business media