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Business Press Market Report 2009
Key Note Publications Ltd, Aug 2009, Pages: 108
The economic recession has accelerated the decline in advertising print revenues that had been in evidence for some years. Revenue generated from advertising in business magazines exceeded £1bn in 1997 and expenditure remained at this level, with some fluctuation, around the economic downturn in 2001 but, in 2008, it was just £839m. Income from advertising — both display and classified — is a major revenue stream for the business press, which suffered as a result of the shift from traditional to online advertising. To a certain extent, the problem of shrinking revenues from print advertising was reduced as publishers created their own online products to ensure that they received a share of the income from online advertising.
To attract advertisers, publishers needed to ensure high volumes of traffic to their sites, which meant making content available free. However, the rules of the game have changed. As the financial recession has deepened, advertising expenditure has fallen even further and publishers are exploring alternative sources of revenue. Subscriptions are also an important revenue stream, although, while advertising was the prime source of revenue, publishers had a degree of latitude with subscriptions, often giving copies free (known as controlled circulation) to the budget-holding readers that the advertisers most wanted to reach.
However, the decline in advertising has rendered the controlled-circulation model redundant. Instead, publishers are seeking to increase revenues from subscriptions, especially online, and the industry is in the throes of moving from a free-content model to one where content must be paid for. Companies providing the kind of market data that are crucial for customers — financial data, sales data, competitor analysis and so on — have been able to embed their systems into their customers' workflows, which makes revenues earned from providing business intelligence in this way more secure.
The Netherlands-based business publisher VNU decided this was the way forward in 2006, when it divested its publishing arm and focused on the data side of its business, following its acquisition of Nielsen. VNU, once one of the largest global business publishers, is no more, having been rebranded as The Nielsen Company and having sold its business-to-business (B2B) publications to Incisive Media.
Reed Elsevier attempted to follow suit by divesting its B2B publications division, Reed Business Information, but the economic downturn has precluded a suitable buyer coming forward. Therefore, Reed Elsevier continues to manage Reed Business Information, but any financial investment is focused on the business intelligence services provided by LexisNexis.
Emap's B2B business, having been bought by Guardian Media Group and Incisive Media's investor Axis, remains strong, but had it not been for the current economic situation, it is likely that Reed Elsevier's sale of Reed Business Information would have gone ahead and that there would have been a merger between Incisive Media and Emap.
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