BtoB Media Business - February 2010 - (Page 16)

SALES & MARKETING Sales & Marketing Revamping revenue bases Publishers charge ahead with updated models for paid content, but are readers buying it? BY MATTHEW SCHWARTZ AD VANTAGES Blending b-to-b, b-to-c markets n January, publishing veteran Richard Beckman was tapped as the CEO of e5 Global Media, a newly formed company whose assets include AdweekMedia, Billboard and The Hollywood Reporter. The brands were acquired Dec. 31 from Nielsen Business Media. Previously, Beckman BIO was president-CEO RICHARD of the Fairchild BECKMAN Fashion Group, CEO, Condé Nast’s fash- e5 Global ion b-to-b unit and, Media before that, president of Condé Nast Media Group. Media Business: What’s your initial sales and marketing strategy? Beckman: We have very storied brands, and we’ll develop a multiplatform business that is mediaagnostic and not overly focused on any one platform. As we develop our core businesses, we’ll expand both vertically, by providing more touch points for customers, and globally, through events and robust digital platforms. MB: Considering their audiences, do you plan to cross-market any of the brands with consumer precincts? Beckman: Music and entertainment are two subjects that people have a great deal of passion for. So, yes, we’ll be developing opportunities to expand our footprint and influence at the top end of the consumer pyramid. MB: What role will print play in the revamp? Beckman: The important thing is to give consumers content in whatever forms they want and not have any preconceived ideas about how to deliver the content. Print will be an important part of the platforms, but the platforms will be agnostic. We’ll triangulate with consumers via multiple platforms. W ith the online advertising model increasingly vulnerable due to the commoditization of news and information wrought by the Web, a growing number of business publishers have stopped debating paid-versus-free and are now scrambling to shift their brands to a subscription model. Through various pay mechanisms, several media companies are starting to charge for their online content: ■ FT.com recently added new editorial features designed to encourage readers to sign up for a paid subscription—$186 for a standard subscription, $299 for a premium subscription (packaged with the print edition). The new features, targeting premium subscribers, include a monthly “Editor’s Newsletter” and an electronic edition of FT.com. ■ Reed Business Information’s Variety in early December started charging $248 annually for access to all its content, including daily and weekly print offerings, Variety.com and an iPhone application. The publication, whose print version has a paid circulation of 30,000, had offered its online content for free since October 2006. ■ The Economist is reportedly considering putting some of its online content behind a fire wall, and The New York Times recently announced that starting in early 2011, visitors to NYTimes.com will get a certain number of articles free every month before being asked to pay a flat fee for unlimited access. “With CPMs falling apart, [online advertising] is not a sustainable model and [publishers] are going to have to go in the other direction,” said Scott Peters, co-president of media investment bank Jordan Edmiston Group. Shifting to a subscription model online is the “ultimate test for business publishers to see whether their content is ‘mission critical’ and helps people to do their jobs better,” he added. “If so, people will be willing to pay a fair price.” Since it reintroduced a pay wall on Dec. 8, Variety.com has garnered 250 paid subscribers, predominantly b-to-b buyers, said Neil Stiles, president of the Variety Group. After clicking on three pages on Vari- ety.com, one in 10 randomly selected visitors is prompted to register for further access. Nonsubscribers may access only five pages of content a month. Content unaffected by the pay wall includes the home page, headlines, brief article summaries and search results. Stiles admitted that the move to a paid model will result in loss of traffic for Variety.com, which has about 2 million unique monthly visitors. However, he said that the publication’s core readers, such as studio executives, talent agencies and high-wealth people in the industry, will be “more than sufficient to deliver on our core advertisers’ needs.” (Stiles declined to comment on a recent report that Variety is up for sale. Parent company Reed Elsevier unsuccessfully tried to sell its RBI unit last year and has since started to sell off the portfolio in pieces, such as Broadcasting & Cable, Multichannel News and Twice in December to NewBay Media.) FT.com, which has more than 1.8 million registered users, continues to aggressively pursue a paid strategy. Since 2001, the Web site has had a relatively simple subscription model in which content was either paid or free. However, in 2007, FT.com switched to a tiered model that allows users a level of access depending on the frequency of use. Readers are allowed to read one article a month before they’re asked to register and 10 articles before they’ll need to subscribe. The tiered approach is working. Paid subscriptions at FT.com grew 22% in 2009, to 121,200, compared with 2008, said Managing Director Rob Grimshaw. Revenue from FT.com digital subscribers rose 30% in 2009 compared with the year earlier. Overall, digital revenue grew to represent 21% of FT’s business, up from 14% in 2007. Indeed, this year FT’s online content revenue will overtake print advertising revenue for the first time, Grimshaw said. “We produce a great quality product that costs a lot of money to produce and collect, and we think it’s worth something,” he added. “A lot of publishers are suffering a lack of belief in their own product and that’s something you don’t see in any other industry. I 16 | Media Business | February 2010 | mediabusinessonline.com http://www.Variety.com http://www.Variety.com http://www.FT.com http://www.FT.com http://www.FT.com http://www.Variety.com http://www.FT.com http://www.NYTimes.com http://www.FT.com http://www.FT.com http://www.Variety.com http://www.Variety.com http://www.mediabusinessonline.com

Table of Contents for the Digital Edition of BtoB Media Business - February 2010

BtoB Media Business - February 2010
Contents
ABM Seeks Successor to Gordon Hughes II
Current Conditions Favor Smaller Publishers
Digital Marketing Services a Bright Spot
Sales & Marketing
Production
Audience Development
People
Benchmarks
Hopeful Signs of a Media M&A Rebound

BtoB Media Business - February 2010