Blog: Putting your arms around the industry

At the AOP judging day in May, I was on the same table as Nic Howell the Deputy Editor of New Media Age.  At one point, Nic made the point that every B2B publisher needed to have a paid-for strategy.

I’ve been pretty consistent over the last couple of years in my view that there’s still considerable value in the controlled circulation model for online publishing.

My colleague Tom Dunkerley has blogged recently on the likelihood of Sift Media introducing pay walls.  I thought I’d build on that with some comments on the prospects for subscriptions in the context of the ongoing travails of the B2B magazine industry.  I wrote last month about the difficulty of making the transition to online-only, and as further grist to the mill this week we hear that Centaur is folding Data Strategy into Marketing Week this autumn.

One of the arguments against charging subscriptions in the B2B world has always been that there’s tended to be 2 or 3 leading print titles, often controlled circulation – think Legal Week (Incisive) & The Lawyer (Centaur) and Accountancy Age (Incisive) & Accountancy (Wolters Kluwer) – with this model replicated across many industries.  The point being that it’s difficult to generate meaningful subscription revenues when your competitor is pursuing a controlled circulation approach.

However, the fact is, these magazines are struggling and the trend looks inescapable, which means the competitive landscape is increasingly going to be digital.  The question is, will the prevailing business model become subscription or controlled circulation.

Take a prototypical UK business industry with 100,000 professionals, of which 25,000 currently get the controlled circulation magazine for free.  How many would subscribe to a digital-only version?  Let’s assume 10% paying perhaps £100 pa, equivalent to £0.25m a year.

The other approach would see you continuing to try to embrace the whole industry, generating revenues from bringing audience and advertisers into contact.  One could easily envisage a scenario where 30,000 (of the 100,000) had registered for some sort of digital update from the title.  How much could you earn with this approach?  Publishers are painfully coy on their digital revenues, but as one data point, Sift’s title AccountingWEB.co.uk did £750k last year from its pure digital activities (although its audience is somewhat larger).

Of course this is simplistic, a subs approach doesn’t preclude advertising; nor does a controlled circulation approach preclude subscription elements.  And also these things don’t play out in isolation; if one title was paid-for and the other controlled circulation, could you really build up a subs business.

Personally, I believe the best approach is a blend that sees a controlled circulation strategy deliver the benefit of being able to put your arms round the industry, with paid-for / subscription elements adding to the mix; each reinforcing the other.

The only people who I think are making a mistake are those pursuing a rigid paywall approach.  Three key reasons why this is wrong:

• If you’re not free, others will entice away your audience with ‘free’ services.
• You can’t interface properly to the social media world (they’re free, you’re not).
• You’re then only ever talking to a small proportion of the industry.

Some people suggest that if everyone else gives up, and you’re the last man standing, you might be able to charge subscriptions.  Simple answer is, if that happens, we’ve all got problems.  It was very much a sign of the strength of the publishing world that it could support so many competing titles.  This scenario would mean that publishers were losing the battle over audience engagement, which is an entirely different (but nevertheless very pertinent) question that I’ll cover another time.