Apparently the media industry is “stunned” that BusinessWeek is for sale. Really? Stunned?
Today’s article in B2B Media Business cites the following:
- - BusinessWeek lost $85 million in 2008
- - BusinessWeek has already lost $20 million in 2009
- - BW’s ad pages declined 17.2% in 2008
- - This year, BW’s ad pages have declined 36.8% compared to the same period last year
- - BusinessWeek’s ad pages have dropped 69% since their high point in 2000
- - Print ad revenue has fallen 59% in the same time period
Why are people stunned that McGraw-Hill would want to offload a business unit that is bleeding so severely? I understand that BusinessWeek’s brand is valuable and important, but most companies – including McGraw-Hill - can’t absorb $80 million in losses year after year.
I suppose that the shock and dismay people feel at the loss of well-established print entities shouldn’t surprise me. Just look at the outrage that people felt at the thought of the Boston Globe possibly closing its doors, even though that publication is on track to lose $85 million this year.
Publishing and media companies that continue to shrink are going to have to figure a way out of their declines. McGraw-Hill will likely be able to unload BW because the brand is strong and there will be buyers. But most companies aren’t going to have the option of selling.
The B2B Media Business article says that McGraw-Hill “has long touted a model based on data businesses that provide steadier revenue streams than ad-supported properties.” It’s too bad that McGraw-Hill wasn’t able to figure out how to turn BusinessWeek into a data business before being forced to sell.
At this point, publishing and media companies need to be moving to diversify their business models, and it’s an easy jump to add additional data-driven models to the mix. To do so, publishers need to begin collecting data on their audiences and using that data on their audiences to provide more value for their customers. And they need to do both today or they may suffer a fate worse than sale.
Though the demand for news has not fallen, some major newspapers are finding it necessary to stop the presses. Falling advertising revenue and the continued migration of readers to online sources are largely to blame. One such newspaper is Madison, Wisconsin’s The Capital Times.