Wednesday, July 15, 2009

Not BusinessWeek as usual

The newsweekly model is so badly frayed that operating BusinessWeek as usual probably won’t be possible for whoever coughs up the putative $1 it will take to acquire the magazine.

Assuming a buyer materializes, an extreme makeover will be required to steer BusinessWeek toward profitability at a time when diminishing readership, slumping revenues and shrinking relevance are perhaps more severe for newsweeklies than they are for newspapers.

One way to pump new life into BusinessWeek may be to augment, or perhaps altogether supplant, its conventional publishing model by turning the franchise into a comprehensive and authoritative destination for independently produced business, economic and securities analysis.

This admittedly radical strategy suggests a number of new and badly needed revenue ideas, as discussed in a moment. But radical ideas appear to be in order for the battered newsweekly business.

In a world where news changes literally at the speed of light – and an abundance of information is free for the taking – the idea is quaint indeed that a magazine would come out once a week to tell us what happened in the prior seven days.

As forward-looking as BusinessWeek and the other newsweeklies profess to be, the genre remains rather hopelessly anachronistic in the minds of most consumers and advertisers.

BusinessWeek faces the same problems as the general-interest newsweeklies, which in recent years have pared their rate bases, cut their staffs and repeatedly redesigned themselves in desperate efforts to reinvigorate their brands. Their actions might have bought a bit more time but certainly produced no game-changing turnarounds.

BusinessWeek might have been expected to fare better than the general-interest books, because it reached a highly desirable audience of business-oriented readers who presumably out-earned and outspent the average person paging through Time or Newsweek at the dentist’s office.

For a while, indeed, BusinessWeek seemed immune. When the global economy plunged into the blackest hole since World War II, however, business and financial advertising were sucked right in. By all appearances, the category will continue to suck for some time to come.

The New York Post reports that BusinessWeek, which ran profits as high as $100 million a year during the Internet boom, lost more than $45 million last year and may lose up to $75 million in 2009.

The buyer who plunks down a buck for BusinessWeek will have to be prepared to creatively deconstruct the advertiser-supported business model that has been the mainstay of most print publications for as long as any of us can remember.

Hence, the radical idea of turning BusinessWeek into the definitive portal for crowd-sourced business news.

The initiative would generate a wealth of original and sophisticated content at zero cost to BusinessWeek, while producing fresh revenues at the same time.

Although crowdsourcing admittedly hasn’t proven to be a particularly reliable replacement for the coverage provided by the professional press, plenty of highly competent business analysts, academics and other qualified parties are itching to tell the world what they think.

This is particularly true at a time when thousands of un- and under-employed professionals would leap at the chance to gain the visibility a publication like BusinessWeek can provide.

BusinessWeek could capitalize on this opportunity by tasking its editors to identify and recruit ongoing contributions from the best authors of market research, economic analysis, investment ideas and other business insights.

The invited contributions would be featured on the BusinessWeek website and the best of them would graduate to the print product, assuming the economics are sufficient to support one.

In addition to traditional advertising and print subscription sales, the BusinessWeek portal could make money in the following ways:

:: After providing readers with free abstracts of premium articles, research, newsletters and blogs, the site could sell access to the full product and split the proceeds with the authors.

As but one example, BusinessWeek might offer subscriptions through its portal to Grant’s Interest Rate Observer, which costs $850 per year or $65 per individual issue. Although author James Grant, an old Barron’s hand, is well known in certain circles, he might be pleased to offer his wares to a larger audience than he can command on his own.

:: BusinessWeek could sell copies of individual research reports via call-to-action buttons embedded in web articles , as well as tear-out postcards stitched into the print product.

To get a sense of the potential market for lead-generation advertising, take a look here at the dozens of reports – a few ranging to $199 and beyond – available for Wal-Mart. Morningstar sells a portfolio management tool for $178 a year. Masters-O-Equity offers an options trading system for $599. And so it goes.

:: Depending on consumer demand, niche web, print and video products could be created on topics ranging from retirement planning to how to start a business. Revenues would come from subscriptions, advertising and lead-generation advertising. That essentially is what U.S. News and World Report has done with its college and auto-buying guides.

:: Conferences and other live events, as discussed previously here, could be another important revenue source.

Where does this leave the high-priced professionally produced journalism we know and love? That will depend on how well the magazine is able to capitalize on the various new revenue streams.

But one thing seems sure: BusinessWeek won’t be capable of producing any journalism if it continues losing tens of millions of dollars a year.

Even at a cost of $1 for the whole shebang, the magazine will be no bargain without a realistic path to profitability.

8 Comments:

Blogger Matt said...

I'll put in 34 cents. All we need is a Blogger and a Salesperson to come up with the other 66 cents between them and we are in business.

5:24 AM  
Blogger Michael Eisenberg said...

Hi - I think it is a great idea. So great it has been done already. It is called Seeking Alpha. check out www.seekingalpha.com where i am an investor and board member.

Your two ideas of crowd-sourcing financial and business content and finding new revenue models like you suggest is spot on.

5:59 AM  
Blogger tom said...

Writing all this w/out mentioning Seeking Alpha strikes me as a major oversight.

The big However: how many people does Seeking Alpha employ in an editorial capacity -- a dozen perhaps? It wouldn't be that hard to steal their best writing talent, all you'd have to do is pay them better. Oh, wait.....

6:41 AM  
Blogger Newsosaur said...

In re the above comments, I will happily and freely acknowledge some similarities between my idea and Seeking Alpha.

But there will be more than one way to skin the "business crowd-sourcing" cat and I think the concept and execution discussed in the post stand on their own.

7:06 AM  
Blogger Ron said...

BusinessWeek already has developed and launched (in beta) a crowd-sourced, business news aggregator called Business Exchange. Take a look at http://bx.businessweek.com

Disclosure: I'm Dir. of User Participation for BusinessWeek Digital

7:39 AM  
Blogger Michael said...

I subscribed to Business Week in the late 1980s and early 1990s when the magazine regularly offered long form journalism and a healthy dose of critical thinking.

Then CNBC and cult of personality entered the scene. Business Week stopped publishing articles longer than three pages, and told us how great fill in the blank merger and/or CEO was. I stopped subscribing because the product became terrible.

Once Portfolio switched from being a gossip rag of Hampton residents to critical analysis and long form journalism, I subscribed. Too bad no magazine cares to offer such a compelling product.

BTW, Seeking Alpha is not a very good replacement for what Business Week was in the late 1980s and early 1990s.

9:00 AM  
Blogger Steve Ross said...

SeekingAlpha.com is a great service for traders, but that's hardly all that BW seeks to do. Sadly, BW used to do the non-trading stuff better than it does now, but it's still a great resource.

9:12 PM  
Blogger Erik Sherman said...

I remember being in a discussion with George Gendron, founder of Inc, and a number of freelance writers years ago. He said that the business magazines, with their large organizations and infrastructure, were effectively paying Vanity Fair rates for every single story they published. That may work when there is some glamor involved, but much of what appears in these publications falls into the mundane.

3:45 AM  

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