The internet has broken the role of publishers as gatekeepers to audiences and devalued their inventory. That means we have to find something else that people are willing to pay for and weekly, print-based, advertising-funded publications is not it.
He says: "It was a paid-for magazine, but when you look at it 85 percent of the revenue is still from advertising, and that doesn't fit with our strategy.
Changing times, changing strategy
Kelsey says RBI is coming to the end of the first phase of the transition which has seen the group sell off more than 150 titles over the last two years.
Data services now account for 44 percent of RBI's annual revenue, making up the lion's share of what Kelsey describes as paid content, which accounts for 75 percent of revenues. That is up from just 14 percent and 45 percent respectively as recently as 2007. Kelsey's handling of that transition was cited as one of the key reasons why he was presented with the Marcus Morris Award by the Professional Publishers Association last week.
According to Kelsey, the next stage will see RBI's total size remain broadly the same, as it acquires new businesses which fit the model and which RBI will invest in, while disposing of some remaining titles that don't. RBI's focus means he will only be buying businesses that fit the high-value data driven model of existing businesses like ICIS.
Acquisitions vs organic growth
As for the portfolio, most of RBI's growth will come from building on the services RBI already offers and launching new services on top of them
He says: "Like any big media company we are always looking to our portfolio, but we've done the big step change. Most of the growth will primarily come from building on the services we've got and launching new models around them, whether it is ICIS launching a new report or Bankers Accuity launching a new module for clients.
So if RBI is on the M&A trail, but what kind of businesses is it interested in?
-- Data driven: Anything that provides unique data in a way that helps customers do their jobs, such as RBI's ICIS, which delivers pricing data on petrochemicals and Ascend, which covers aviation.
-- Global: Kelsey points to RBI's businesses in finance and aviation as examples of a global approach. For example being able to launch a service in China, a key focus for RBI, not only opens up new markets, but also helps weather the financial crisis which has been more keenly felt in the US and Europe.
-- Valuable audience: RBI isn't adverse to advertising - Kelsey says it is still a key revenue stream - but only for businesses that have an audience they can reach more effectively than the likes of Google Loading... . Kelsey isn't keen to acquire businesses that are reliant on ads, but isn't in a rush to sell of those that can still make significant revenues from their audience.
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