In the last few months, TheMediaBriefing has featured some of the leading names in UK and worldwide business media. We’ve profiled, interviewed and published articles by the CEOs of Emap, Incisive Media and United Business Media.
This week we went to see Peter Rigby, CEO of Informa, the global subscription data, events and B2B media company, ahead of preliminary full-year results later this month, to ask him about digital subscription models in 2011…
Apart from owning probably the world’s oldest continuously printed trade journal, there isn’t very much analogue publishing going on at Informa.
The maritime daily newspaper Lloyd’s List has an unbroken publishing history stretching back to 1734 (today is issue number 60,352) but like so many B2B brands it provides real-time data analysis on market trends and key figures.
Sat in his office at the top of Informa’s London HQ, CEO Peter Rigby talks about good management but also luck: he says it’s “lucky” that Informa only makes about two percent of total revenues from advertising; lucky that it has built brands and products people are willing to pay for, where others face the whims of the advertising market.
Data growth, subscription model evolution
“Subscriptions databases is a great place to be in; discretionary training and conferences isn’t a great place to be in, but academic publishing has been a great place to be in.
“Gradually our content, whether it’s news or data, is being delivered digitally. Of our total revenues at the end of 2009, nearly 40 percent of all revenue was digital.
Since someone invented B2B subscriptions, the main financial relationship with customers has been on a single, one-to-one basis – transferring a physical product to readers in return for a priced annual subscription. For Rigby, this world is rapidly disappearing.
Informa invariably sells news to highly targeted niches and does so digitally and on a site-licence basis, whereby companies buy access for a number of staff – many customers also receive bespoke, tailored information products.
“Although as an old-fashioned publisher I still think about selling a subscription to you, and what’s the renewal rate and all that stuff – that’s more or less gone.
“What you’ve got now is digital delivery, an on-site licence and probably no particular price because it’s different customer-to-customer and it depends how many people they have, whether they’re taking legacy products too and digitising them… But gradually more and more we’re into that business rather than single subscriptions.”
But don’t some captains of industry like print? Some B2B leaders defend the role of the printed, weekly B2B mag; they see it as sealing an important physical connection to customers.
“Yes that’s true in certain sectors. To the extent you can deliver that in a cost-effective way, then that’s great. But if you’ve got a tight, niche product – not an FT or Economist – a worldwide market of 200 subscribers, or even 50 or 40 companies, then nowadays the product has got to be delivered electronically. It’s got to be delivered in a usable way and that’s what customers want.
The changing book business
So, digital is the watchword at Informa. Except, that is, in its book business. The company merged with academic publisher Taylor & Francis in 2004 and just under a quarter of its revenue in 2009 was in the academic space.
But aren’t books being transformed in just the same way newspapers and trade magazines have been? On the distribution side, certainly, says Rigby:
“Some people who work for us will tell you that sales of ebooks are going like that [makes vertical hand gesture] but it’s from a very low base, a couple of million pounds or so.
“Our books business is largely in the academic space and it’s transformed by digitisation of manuscripts, print on demand, the requirement not to hold much stock in warehouse nor in bookshops. So Amazon for us has been a Godsend even though we’re not in the consumer side.”
For free or not for free? It’s really no question
The current debate on whether and how consumer and business media can monetise their online content seems far removed from Informa. There simply is no debate for Rigby and his lieutenants: it’s quality stuff, you need it to do your job and you have to pay for it.
“Firstly, like you, we’re in business. We spend money, our costs, creating products. Hopefully those products have quality, rather than just regurgitating press releases or whatever. We’re hardly in the area of controlled circulation magazines – we are in the business of paid-for content.”
Digital products increase scrutiny
And Rigby’s keen to point out that while digital intelligence delivered straight to people’s inboxes has its advantages and efficiencies, it means there’s nowhere to hide when it comes to quality:
“People vote with their feet with data. You’re even more open than you were before to the quality issue: people can see in their companies who is using [Informa’s products] and who isn’t and if you’ve got a product that people buy and don’t use it for whatever reason… then they’ll cancel it.
“It’s much more transparent than the days of hard copy newsletters, which is what we did when I joined.
Come back tomorrow for part two of this interview – with a focus on the financial health of Informa, its debt-fuelled acquisitions and events business.