Tag Archives: Thomson Reuters

Let’s go back to the 90’s…

A quick story (please bear with me here  friends…)

Imagine it is 1997

Back in 1997 I was running a small marketing team for a global B2B publishing company.

We were developing online versions of our print publications & starting to experiment further with e-mail marketing.

Web sites were very unsophisticated – tending to be little more than facsimile versions of our magazines. There was very little interaction with readers and we really treated the Internet just as a distribution channel rather than a great disruptor of business models.

We had little idea of the emerging advertising/sponsorship models. Pricing decisions were agreed without any science or bundled in with physical products. User data was rarely gathered or intelligently used.

Remind you of anything?

Let’s fast-forward to today. We have a new and fast growing development in media consumption. The mobile web.

With the increasing penetration of smartphones, tablets, eReaders, apps and mobile enabled websites, all the rules are changing again.

Media companies are facing the same challenges that they faced in the 90’s and I know from personal experience that many are going to be taken by surprise by the speed at which things are moving.

All too often significant decisions about mobile are being left to tech teams or rushed into as part of a ‘me too’ stampede to get a press release out about ‘our latest app’.

STOP. You need to spend some proper time setting your mobile strategy..

Rob Grimshaw, the Managing Director of the FT’s digital operations said recently that he expected 50% of the FT’s digital readers to access content via a mobile device within the next 2 years.

That’s a fundamental shift in consumption habits and really shows that the mobile web has arrived.

The commercial realities associated with this shift in consumption mean that everyone in media needs to be involved in mobile product development – tech; marketing; sales and content creators.

Set the right strategy. Right now.

On June 14th The Media Briefing will be holding our second major conference.

Mobile Media Strategies takes place at The King’s Fund in London’s West End and will hear from some of the most innovative companies in the mobile field.

Companies including: Thomson Reuters * BBC Magazines * Guardian News & Media * The Economist * Incisive Media * Telegraph Media Group * Screen Digest * comScore * Microsoft * YUDU Media * Bonnier * DK Books * BSkyB * ImpulsePay & MobileTech.

There’s a fantastic line up of attendees already confirmed (here’s a link to our advance delegate list) & we have limited places still available.

Register today

The mobile media marketplace is developing so quickly. There are huge opportunities for the companies that can stay ahead of the curve. Register for Mobile Media Strategies today and we’ll help you on your way.

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Media owners – learn the lessons from other disrupted industries

Creative Disruption book coverOne of the things that I find most irritating about media industry ‘punditry’ is the fact that a lot of the commentators tend to exist in their own little bubble.

There are endless articles written about paywall strategies; CPM rates for online advertising; must-have vs. need-to-have content and whether our current problems will resolve themselves as the economy turns. These are all well and good but only get us part of the way.

To cut to the chase, can we all please agree that we are still only in the early stages of radical disruption of all media businesses?

A radical disruption that has been brought about mainly by the internet & its ability to change media consumption habits and reduce the power of old media models.  

If we all agree and start from this point then maybe we can look outside our media world and look at some of the lessons from other industries that have experienced the same disruption in the past.

How did companies in tech, music, transport or telecoms industries cope? Which companies survived and prospered? Which ones withered and died; and what can we learn as a result?

With all this in mind I was particularly interested to hear a keynote from Simon Waldman at Incisive Media’s E-Publishing Innovation Forum recently. Simon has recently left a senior digital position at The Guardian newspaper and joined LoveFilm.

His presentation “Creative Disruption – or OMG! The Internet ate my business” was based on an upcoming book of the same name. I wanted to list a few of the highlights for me and suggest that you pre-order his book (due out in October this year).

Simon started his talk by highlighting that a process of creative disruption is an essential fact of capitalism. He quoted Joseph Schumpeter from 1939 explaining that a railroad through new country “upsets all conditions of location, all cost calculations, all production functions within its radius of influence; and hardly any ‘ways of doing things’ which have been optimal before remain so afterwards.” 

He then asked the audience to replace the words railroad with the internet.

Imagine that a railroad has just been built through our industry. That railroad has opened up the market to a load of previously unknown competitors from other territories – many of whom we have never heard of. It has changed the cost base of doing business. It has reduced the price point that we can charge for what was previously scarce content. It has allowed our commercial customers to do more of their own marketing and provided access to new tools for publishing and distribution.

That’s disruption on a grand scale and Simon highlighted 4 possible hazardous reactions to these changes.

It’s possible you might recognise some:

  • Denial – the numbers are getting fewer but I still hear some senior publishers who refuse to accept that this process is taking place. They talk about a cycle that they have seen before.
  • Bewilderment – aka the Private Frazer school – we’re all doomed and there is nothing we can do.
  • Delusion – OK. So I accept that this is happening to some parts of my industry (maybe controlled circulation titles?) but those trends don’t apply to my niche, premium content subscription business. We’ll be fine. We’re too good to fail.
  • Distraction – Yup. I get what’s happening, and we’ll get on to it, but first I’ve got a couple of important conferences to promote, we’re redesigning a website and then have to do a budget re-forecast.

All of these reactions will get you to only once place – a spiral of pain.

So, what lessons did Simon learn from other industries that have been through these disruptive phases? What should media owners be doing about it?

  1. Start with change in mind. Right from the top. He highlighted the Fast Forward change programme that Tom Glocer introduced on taking over at Reuters to make very clear where the company was coming from and going to.
  2. Fix the core first. Don’t spend time searching for something that is too radical. Lou Gerstner, the IBM Chairman said that “the last thing IBM needs now is a new vision“. His (ultimately company saving) approach in 1994 was to get the company’s core business right by adjusting their product mix, working on the cost base and getting the business profitable. That allowed him to generate cash and buy time to move away from the mainframe and into the services business. Smart things come from stable cores. They are very hard to do when you are fire-fighting.
  3. Look for key adjacencies. Where are the opportunities at the edges of your markets to expand? What do you do better than your competitors and how can you move those skills into new areas? This is something that media owners have generally been good at with brand extensions, taking advantage of new platforms, geo-cloning products to other territories etc.
  4. Innovate around the edge. You might need to do this away from the main business (anyone up for another Euston Project?) but these activities should be focused experiments to test and feed back into the core business. It was interesting that upon becoming acting CEO of Apple, Steve Jobs cut their research and development budget in half but gave a much clearer focus to the spend. They could only develop the iMac/Pod/Phone/Pad after they had reduced headcount by 1/3, sorted out their supply chain and made their desktops profitable.
  5. Build your teams to enable change – this required a combination of Firestarters, Rockstars and Fixers (combined with great leadership at the helm).

All in all I thought it was a great presentation and provides a good roadmap for anyone wrestling with the changes in the media market.

I look forward to reading the book when it is out in October and cannot help but see a little irony in the fact that Simon has chosen to leave the media industry prior to it being published…

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7 strategic questions business media leaders should be asking

Over the last few weeks a major swathe of the quoted business media companies have been reporting their results. While I have covered some of them on this blog I have not done so from the perspective of a financial analyst. Instead, I find it fascinating to see the leadership teams of these companies present their strategy for their businesses.

Individually these results presentations tell a lot about how an individual business is shaping up. What are the threats to their traditional markets? How are they making the transition to a digital future? How strong is the management team? etc. What gets more interesting though is when you aggregate these presentations and try to distil some key themes from them.

So here I would like to pull out 7 key questions that I believe business media companies should be asking themselves if they are to prepare themselves for the years ahead.

1) What business am I in?

Before any company starts down this road it is probably worth reviewing your company’s mission statements, goals and values.  The media landscape has changed radically in the past 5 years. It will change radically again in the next 5 but there should be some key underlying themes that remain true and consistent. Try to document in real language what your business is and, please, don’t just sit there waiting for things to return to the past *cough, recruitment revenue, Centaur results presentation*

2) What does my company do really well?

It’s all well and good to have many spokes to your wheel and a multi-platform strategy is sensible. However, underneath that each company should be able to easily identify their key strengths. What do you do better than your competitors? What is your key advantage as an organisation? Shouldn’t you be spending a lot more time trying to build on those strengths and add complementary offerings around those particular skills rather than worrying about areas where you are weaker?

3) In which markets do we own brands with ‘last-man standing’ advantage?

In the UBM results presentation David Levin spoke about the business media industry being ‘over-published’ in many key verticals. He was specifically talking about print products but we all know that strong media brands don’t work with only one channel. In which media markets do you have real strength? Where do you own real brands rather than just products? Concentrate on those and get out of the markets where you don’t – sell them quickly (there are still plenty of buyers..), close them or accept that you are running them for short-term cash.

4) What is our emerging markets strategy?

Healthy business media properties rely on underlying growth in the markets they serve. Geographically it is clear that the major growth in the world economy is likely to come from the developing rather than the developed world. What is your company doing to benefit from these markets? What operations or partnerships do you have in the BRIC countries (Brazil, Russia, India, China) and other growth economies?

5) What are we doing to move up the value chain of information in our chosen markets?

In all but the most specialist markets, news is becoming commoditised. Businesses that in the past have relied on charging for news are rapidly finding that their business models no longer work. If you want to stay in these market sectors what are you doing to move your content and services up the value chain? Where are you able to add data and analysis to your content mix? What about the development of workflow solutions and software products? It’s not easy and is no quick fix but a drive towards higher value and renewable revenue streams should obviously be a goal for all business media companies.

6) Is my business structured for the past or the future?

In the UBM presentation it was interesting to hear Levin talk about a significant re-engineering of management teams in the past year. Whilst modern media businesses clearly still need a lot of the skill sets they always have – content development,  relationship building and talent management – increasingly technology is playing a much bigger role. Do you have the right people in place? Are there bottle-necks in your structures? Are there people in charge of business units who are responsible for making decisions on areas in which they have little experience?

7) Can I explain my company strategy clearly, simply and believably?

A couple of the CEO’s who presented their results recently gave me very little confidence in their company’s future strategy. While you don’t have to be a great presenter to run a great business; you do have to be able to give confidence to your customers, investors and staff that you have a plan about where you are going and why.  After the recent turmoil in many media markets I’m not convinced that some companies have made up their minds.

Here are 7 questions.

Any others that you’d like to contribute? Please put in the comments below.

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Thomson Reuters results

More results today – this time from Thomson Reuters.

On the surface they are fairly similar in trends to those of Reed Elsevier that I covered last week – pressure on headline revenues, significant cost cutting and highlighting the ‘late cycle’ nature of the business. However, when I listened to the results presentation this afternoon I came away with a very different perception of the business.

Whilst it is obviously a much larger business that Reed Elsevier, Tom Glocer and his team gave a very measured performance on their call. Their message was similar with the same period last year. There was stability and a consistent strategy of product investment for growth in the medium term.

Some of the things they highlighted were:

  • WestLawNext – Tom said that results were coming through well and that WestLaw had achieved it’s best sales in the last quarter since Q4 2007. He said that in a period of market difficulties that it was great for sales teams to have something new to sell. Since it launched earlier this year he claimed that 400 new sales had been secured in the first month and that he was confident of a significant uplift in market share.
  • Transition from print to online – In what sounded like a bit of dig at the competition Tom said that they had been slower than organisations like LexisNexis in transitioning products from print to online. He inferred that LexisNexis had made a mistake in abandoning print aggressively and early. He said that Thomson Reuters had ‘managed the transition without the chasms of profit drop out’ and that there were elements of their portfolio that remained better suited to print.
  • Utah – Thomson Reuters’ new standardised desktop platform was another example of the company’s investment. It was running a bit behind schedule but currently ‘in alpha’.

Overall, I took away  a lot more confidence in Thomson Reuters’ strategy than I did from the Reed Elsevier call last week. They obviously still have a lot of market pressures on various parts of their business but the positioning of the company for growth in 2011,2012 and beyond sounded believable and robust.

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Thoughts on the Reed Elsevier results presentation today

It’s results season again and one of the biggest business information companies have just announced their results this morning. Reed Elsevier are an organisation that have really gone through the mill over the past couple of years. Let’s remind ourselves of what has happened in this venerable company:

  • 3 Chief Executives – Sir Crispin Davis left this time last year to be replaced by a non-media man, Ian Smith. Ian lasted just 9 months and was replaced by Erik Engstrom the head of the Elsevier division.
  • 1 huge acquisition – Choicepoint at a relative high point in the market
  • 1 failed disposal – the Reed Business Information business was publicly put up for sale, then withdrawn from sale and now seems to be being sold off piecemeal
  • 1 major notes issue – to reduce debt after the acquisition of Choicepoint and failed sale of RBI

Torrid times for any company – even one with a solid range of defensive subscription income.

On the surface of things the results that they announced today seemed not too bad but having listened to their presentation webcast this morning it is easy to see why they have under-performed the sector by 30% since the start of the global downturn.

It is clear that the changing strategy in relation to RBI has been hugely damaging. A business that was already in severe structural decline was left rudderless during the prospective sale. It has then had to radically cut costs in the face of a collapse in revenues (18% down on the year). I would imagine that it has been a brutal time to work there and the continuing uncertainty of headcount reductions, closures and sales cannot be providing a great environment.

Even worse than the performance of RBI has been the downturn in the Reed Exhibitions markets. Here revenue is 22% down on the year which is not really surprising given that a lot of exhibiting companies would have been making re-booking decisions during the high-points of market uncertainty. Erik was keen to emphasise that the problems in exhibitions were cyclical rather than structural. This is partly true but once large companies have taken a decision to drop from major industry shows it is often hard to get them back.

Whilst the poor performance of RBI and RE had been flagged up and was expected, the real underlying concern I picked up from the presentation was the longer term worry about LexisNexis. It wasn’t stated but there seemed to be a general feeling from the Q&A that there were severe competitive pressures on the LexisNexis platform as a result of the Thomson Reuters investment in WestlawNext.  I suspect that this is causing them a lot more concern than they were letting on.

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Thomson Reuters results – singing from the same hymn sheet

Another day; another set of results. This time the Q4 results from Thomson Reuters which seem to be pretty robust.

You can listen to Tom Glocer on his investor call here but I wanted to highlight a couple of very similar comments to those heard in the Reed Elsevier call the other day (not direct quotes).

  • Thomson Reuters strategy remains to provide must have content and services on a subscription basis
  • Information that fits into the workflow of our customers is not a discretionary purchase
  • While renewals conversations with financial services customers can be difficult at the moment our sales teams have lots of tools in our toolchest that allow the end users to reduce costs and automate processes allowing lower headcounts in those organisations
  • We continue to invest at a time when others are cutting back – the new Westlaw platform is described on the call as a ‘game changer’ for legal information

Worth a listen.

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