Thursday, December 18, 2008

Through a glass darkly

(Correction: An earlier version of this post incorrectly named the magazine that Ziff Davis Media said it would close. The correct name is PC Magazine.)

It's the end of the year, and time for Folio magazine to publish predictions about the industry.
Once again Folio has been kind enough to ask me for my predictions for the coming year. And as anyone who has read this blog in recent weeks could guess, I'm predicting that 2009 will mark the end of an era in B2B media.
Or, as I said a few days ago, "the B2B industry as we know it is about to collapse."

But before you check out what industry folks see for 2009, I think it's kind of instructive to read what we predicted for 2008.
Last year I told Folio that "print advertising will continue to shrink, and I think it’s going to be a tough year for online advertising too." I also predicted a continuation of the "ethical disasters" we'd seen the prior year in B2B. I also said "I don’t expect an increase in hiring" but did expect a rise in deals where freelancers work for a revenue share.
And as much as I wish I had not been right about much of what I predicted, I have to give myself a pretty good grade for that list.

Some of Folio's other prognosticators last year also saw correctly that things were taking a turn for the worse.
In particular, it's worth noting that Larry Grimes said private equity firms would look to sell their holdings, but they'd find few buyers and lower valuations. He also predicted that publishers looking to buy online properties would "find the pickings are very slim." And that "deal flow will be slow until the banks start lending again. "

On the other hand, some of last year's predictions look pretty far off the mark as we look back at 2008.
Reed Phillips predicted that by the end of the year, "valuations for newspapers, specifically, and print media, in general, will start to rebound." There were also two people who predicted a surprising rise in magazine advertising in 2008.
But the most poignantly incorrect prediction came from Lance Ulanoff, editor-in-chief of PC Magazine, who said that after another year of the Web vs. print war we'd see a situation in which "magazines recoup just enough advertising to find new life and live to fight another day." But by November, Ziff Davis Media had announced it was shutting down PC Magazine's print publication.

This year's collection of predictions is different. This year there's something like consensus. Most everyone, it seems, expects a tumultuous and difficult year.
Check out Folio's full list of predictions for 2009 here.
You should also check out coverage of a recent industry conference in which Folio's Tony Silber predicts that the bankruptcies will start any day.

For a look at some of my other predictions of year's past, click here or here.

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Friday, December 12, 2008

Slipping into darkness

Just three days ago I published a post outlining why I thought the "B2B industry as we know it is about to collapse." Included in that post was a reference to predictions by Outsell that the industry would experience further layoffs, a reference by me to the impossibility of selling a B2B company in this market, and an outline of my growing concern that Web-only companies were in as much trouble as print-based companies.
Well, I hate to say I told you so, but here's what I've seen in the few days since that post ...
Crain Communications is shutting one magazine and firing 50 editorial workers.
UBM is reorganizing its New Jersey-based Commonwealth Business Media unit and laying off 350 workers across the globe.
The RBI sale, and perhaps the entire market for big M&A deals in B2B, has fallen apart.
And one of the best-known blogging networks in the world is cutting pay.

In other troubling news, I recently learned that two of the most promising young journalists I know -- both experts in multimedia reporting -- are leaving the business. I understand why they're heading for the exits. I even applaud the move. And I have tremendous faith that these two women will continue to do fantastic work. But I have great concerns when the world of journalism can't find a home for two of its most promising young people. Read about it here and here.

Please don't misread what I'm saying here. I believe in the future of journalism, particularly B2B journalism. But it's become increasingly apparent that before the next era begins, we're going to continue to experience a very difficult present.

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Tuesday, December 09, 2008

Doom and gloom and rebirth

Last week I heard about a research report filled with the sort of bad news I've come to expect about B2B media.
As I read about the report, something inside me seemed to give way. I realized it was time for me to say something I have hesitated to say:
The B2B industry as we know it is about to collapse.

Allow me to explain:

In the research, Outsell, a firm that markets itself with the slogan "must-have intelligence and advice for publishers and information providers," predicts B2B publishers may soon slash another 1,250 jobs. That would come on top of the 925 jobs already cut in the second half of 2008, according to Outsell's estimates. (The full report, which is available here for $295, was a few weeks old by the time I came across it, so we can assume that some of those predicted cuts have already been accounted for in the most recent layoffs in the industry.)
Outsell also predicts "additional print ad revenue losses of 4.5% in 2009 and 3.2% in 2010, adding further pressure for reducing print-only staff for the next two years."
More troubling is that Outsell says B2B publishers are having little luck in converting successful print-sales staffers into successful online-sales staffers: "Unfortunately, the success rates of converting print ad salespeople to online ad sales, for example, have been low, with sources directly involved in this citing 25% conversions."
My experiences meeting with B2B journalists in recent years are even less encouraging. I'd put the number of successful "conversions" at around 20%.

It's worse than it appears
Nothing about any of that should be surprising. The seeming inability of most print-based companies to make the transition to the Web is well-documented.
But equally troubling, and far less obvious, is that most Web-only publishers have a similar "conversion" problem.
These Web-native companies are finding themselves unable to assume the core journalistic functions needed by the B2B world. They have mastered content aggregation, commentary and search-engine optimization But only a small percentage of them seem able to move beyond those areas. Original reporting, in-depth analysis, price discovery, data creation, etc. all remain beyond their capabilities.

What the future holds
If you're a regular reader of this blog, you know of my love affair with the world of B2B journalism.
And regular readers also know I've grown quite distressed about the state of the industry.
It was a year ago this month that I said B2B was being pushed into a "a new era of preposterousness" with "revenue targets that seem delusional." I predicted that 2008 would be an"awful"year.
It seems I was correct.
A few months later I said "things were awful and getting worse."
I was right then too.

But even as things have gotten bad and the economy has deteriorated, I've been confident that the future of B2B media was in the right hands.
I'd believed that a new group of journalists -- most of them much younger than I -- was emerging to lead the industry forward. More importantly, I'd been hopeful that a new type of company was emerging -- native to the Web, free of the debt burdens of Wall Street and the cost burdens of print, privately held and without a single angry, that's-not-my-job type of editor anywhere in the enterprise.
But I've come to believe that my faith in these next-generation companies has been misplaced.
As far back as April 2007 I was expressing my concern that "even the newest, Web-based content companies are structured" in such a way that they cannot adjust to disruptive events (new technologies, economic crisis, declines in advertising, etc.) I said then that everywhere I looked, including Web-only start-ups, I was running into the "exact same attitudes, beliefs, work rules, chains of command and silos that I saw in the print-only companies that failed to respond to the Web."
Or, to put it another way, the problem I see at Web-only B2B journalism companies is the same problem I saw at print-based B2B companies in the early days of the Web: a fundamental misunderstanding of one's power in the market. There seems to be something about all of B2B that makes it impossible for people to see what should be obvious -- the formula that brought you success when things were easy will not necessarily work when times are tough.

The other guy is stupid
Here are some of the things I saw at the start of the Web era and their counterparts in today's era.
  • Print publishers greatly overestimated the weight of their brands. They looked down their noses at upstarts without a history or a "recognized" brand. Print publishers assumed that their previous success would translate easily to the Web.
  • Web-only publishers are overestimating the implications of their recent success. They look down their noses at the dinosaurs who failed to adjust to the Web. Web-only publishers assume that their early successes can be scaled.
  • Print publishers put their faith in volume and expertise. They produced great amounts of "must-have" content at high costs, hired large editorial staffs, emphasized reporting over writing and dismissed the potential of one-man operations and bloggers. They assumed that "quality" was what the market wanted.
  • Web publishers put their faith in brevity and insight. They aggregated content rather than produced it, using part-timers and contractors to keep costs low. They emphasized writing over reporting and dismissed the ability of large operations to keep up. They assumed that the market wanted "speed."
  • Print folks underestimated the difficulty of working on the Web. They assumed that, if the time came, they could create blogs, aggregate content and run online communities as well as any Web native. But when the time came, they found they could not.
  • Web-only folks underestimate the difficulty of creating content. They assumed that, if the time came, they could do original reporting, create data and run trade shows as well as any old-time B2B executive. Now the time is here, and they are finding they cannot.
  • Print guys think Web guys are lazy (aggregating content rather than creating it), unprofessional (prone to snarky writing) and stupid. Print guys are breathtakingly arrogant -- and they are most arrogant about their superiority to Web guys.
  • Web guys think print guys are lazy (unwilling to work in the 24/7 world of the Web), unprofessional (prone to hiding bias behind "objectivity") and stupid. Web guys are breathtakingly arrogant -- and they are most arrogant about their superiority to print guys.
The End Game
Both sides of the print vs. Web debate in B2B are wrong. But neither side can see that. And because of this, the B2B journalism world as we know it is about to collapse.
I don't mean that print is going away.
I don't mean the Web is going away.
I don't meant that the print brands that went Web-only are going back to print or vice versa.
I mean this:
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.

Some of this should be painfully obvious.
Print-based B2B is dominated by companies that are choking on debt. Most of those companies won't make it into 2010. It seems that every company in B2B publishing is for sale, but there are few buyers. There's no credit available for troubled holdings. I expect the bankruptcies to begin any day.
The Web-only companies won't fare much better. Online advertising is in trouble. And I don't see Web companies handling that revenue decline any better than the print companies have handled the fall in print revenue.
The valuations of Web-only companies have fallen, just as the valuations of their print counterparts have. The Wall Street folks I know have grown decidedly uninterested in Web-only publishers ... particularly content aggregators and blog networks. The two most compelling B2B brands of the Web-only world -- FierceMarkets and ContentNext -- were sold earlier this year. But an expected surge in Web deals never materialized. Other Web-only properties are gathering dust on the merger and acquisitions shelf.

Another new era
When the economy recovers we'll see a new landscape in which many of the established players of the print and early Web eras are gone.
B2B journalism will be dominated by the following five types of companies, all of which exist today, but as much smaller players in the industry:

1. Content marketers -- corporations and others with no history in publishing and with no need to monetize content. This has to be the most exciting part of the B2B world today. And I expect much more from it. Content marketers won't just create journalism products, they'll start buying them. Look for sophisticated corporations to purchase established B2B journalism brands and use them as the basis of their content-marketing efforts. (For more on content marketers, see this earlier post.)
2. Data and technology companies -- companies that revolve around a tech tool, database or application. They'll offer journalism products as a value-add to the core product and/or as a brand builder. This is the Bloomberg model. And Bloomberg, which emerged prior to the Web, remains the most successful electronic journalism venture on earth. (For more on Bloomberg, see this earlier post. To follow developments in this field, follow Russell Perkin's work at InfoCommerce.)
3. Small, privately held print publishers -- that handful of traditional B2B players who avoided the lure of Wall Street's leverage. Without the debt burdens of their larger rivals, these smaller companies will be able to acquire troubled brands, hire key people and operate profitably on smaller margins. They may also be able to leap past the Web era and seize market share in some post-Web/mobile/AI/whatever era. It's also likely that they can offer content-creation services to the other types of players.
4. Price-benchmark publishers -- those companies that determine commodity prices in a market. Without these companies, entire industries would need to reconstruct their core pricing and distribution functions. That won't happen. So the benchmark publishers will continue on. (Among the better players in this space is Platts. You can read about the president of that company, who will be honored by ABM next month, here.)
5. Networks for entrepreneurs -- alternatives to publishing companies. We've already seen the rise of ad networks for bloggers that have allowed journalists to strike out on their own with something more than Google text ads to support them. I expect that industry to morph and grow. Eventually I expect to see "matching services" that unite standalone journalists with standalone publishers, as well as a surge in B2B-only, revenue-share publishing networks for entrepreneurial journalists (the biggest of these so far is BNET Industries. Look for more in the next few months.)

That's what I see on the other side of 2009.
What do you see?

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Wednesday, December 03, 2008


Longtime readers of this blog, and many of the folks who have heard me speak at industry conferences, know of my interest in psychology, personality types and the insight that the Myers-Briggs Type Indicator can provide newsroom managers.
And anyone who knows me knows that on the MBTI test I'm an ENFJ -- the "teacher" type personality that is overrepresented in the fields of media, nonprofits and religion.
(You can find three earlier posts in which I talk about being an ENFJ here. Or if you want to learn more about this personality type, you can check out profiles here and here.

So imagine my surprise when, just moments ago, I played with a new online tool that is supposed to determine the MBTI personality type of a blog and found that my blog appears to be written by an ISTJ -- the "duty fulfiller" type personality common among cops and soldiers.
Now putting aside my brief military career, I'd be hard-pressed to think of a personality type that seemed less like me than the ISTJ.
Yet the Typealyzer tool says that this blog is written by an ISTJ, a "responsible and hardworking type" who is "conservative by nature."
Even stranger -- the ENFJ and ISTJ personalities are wildly different at the most basic of levels. ENFJs are "people people." Whereas ISTJs are "not naturally in-tune with other people's feelings."

So what gives?
One possible explanation, of course, is that the Typealyzer tool doesn't work.
Another possibility is that I actually am an ISTJ. But I reject that. I've taken the MBTI and related tests a few dozen times in my life and I always come out as ENFJ. (Also, other MBTI geeks always correctly guess that I'm an ENFJ after just a few minutes of interaction.)
But what fascinates me is the possibility that although I am an ENFJ, I adopt the voice of an ISTJ when blogging. Or, to put it another way, perhaps when I started blogging some four years ago, I used a writing style that was marked by the "serious, dutiful and reserved" voice of an ISTJ as a way to not sound like the stereotypical, "snarky" blogger.

Whatever the answer, I do know this for sure: if I actually were an ISTJ personality, then I wouldn't have let a month pass without updating this blog!

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