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Business Information in the UK Market Review
Key Note Publications Ltd, Jan 1998
Key Note estimates that the UK business information market was worth £3.89bn in 1997, having grown by 11.1% in the year. Since 1993, the market has increased by 74.9%. Improved economic conditions have contributed significantly to this increase.
In constant price terms, the market rose by 8.4% in 1997 and by 59.2% between 1993 and 1997.
The largest sector of the UK business information market is market data. This includes items like trade magazines and newspapers, and accounts for 59.7% of the total. Financial data is the next largest, taking 24.9% of the market, with company data the smallest sector, accounting for 15.4% of the total.
An important point determining usage of business information is the frequency with which data is updated. In terms of availability, most business information is either long-term (needs to be updated infrequently) or periodic (needs to be updated regularly, with frequency of update generally seen as a significant competitive advantage). Periodic and long-lived data accounts for 81% of all data sold in the UK. The major other type of data, ephemeral data, is restricted to real-time financial information, usually money market, securities and commodities data used by the financial markets.
In 1997, Key Note estimates that in revenue terms, non-electronic methods of delivery still accounts for 63.5% of the UK business information market. Electronic methods - principally online databases - take 36.5%. Since 1995, electronic sources have made slower progress in taking share of the market than was the case previously. There are three main reasons for this:
The early days of the Internet have seen an increase in free content offered by suppliers to attract new users.
The rapid growth in the management consultancy market which has boosted non-electronic revenues (if consultancy revenues are excluded, then electronic sources have gained share of the market).
The relative reduction in cost of electronic access as the Internet has grown in importance, and as end users and small businesses have been targeted by electronic hosts.
TheMajor Players
The electronic online hosts are major operators in the business information market, followed by the market research companies and then management consultancies. Management consultancies make up the fastest growing sector in this market, reflecting a growing desire on the part of major information buyers for customised and highly-specific information, combined with implementation and application advice.
The Financial Times is rated by major business information users as the most important UK business information provider, well ahead of the company ranked second, Dun and Bradstreet. The former Knight Ridder (now part of The Dialog Corporation) is the third highest ranked provider.
Current Issues Facing TheIndustry
Changing Information World
The information world is in a state of flux. The 1990s can be considered to be a watershed in the industry's development. In the 1980s and previous decades, the market was far less sophisticated. Hard-copy products dominated the market, with most information available being of a general nature and not necessarily aimed at specific audiences.
Compared with the 1980s, today's industry is seeing increasing fragmentation, both in terms of the media used to deliver information and in the user base itself.
Changing Structure of the Market
The business information market is experiencing a subtle change in structure. Much of this change has been driven by advances in technology. The relative cost of powerful databases and widely compatable electronic delivery channels has plummeted in real terms, reducing barriers to entry for new and developing suppliers. This is leading to more mergers and acquisitions, and the development of a wider range of strategic partnerships. The result is a convergence in the information industry, resulting from two forces:
The information delivery companies are seeking either to acquire content or provide unique services that add value to the content they already provide.
The content providers are working to acquire or secure delivery mechanisms, both directly and through new distribution partnerships.
Traditionally, merger and acquisition activity in the business information industry has revolved around traditional print publishers acquiring desirable content. Today, however, traditional print publishers have acquired, merged or formed strategic partnerships with software developers and delivery companies, highlighting new trends which are changing the face of the business information publishing industry.
These advances in technology are also having a marked effect on the profile of the information purchaser. Direct access by the end user is broadening the potential market and introducing the need for more intelligent and intuitive packaging of information supplied.
There are four main forces driving the changing structure:
increasingly, content need not be divorced from delivery
the need to address the non-expert user
new technologies are reshaping industry pricing structures, i.e. the rise of micro-payment and macro-payment systems
new delivery mechanisms are opening new sources of revenue.
Industry Convergence and Expansion
The major publishers in the business information market have often seen themselves as distinct from the mainstream media market. This distinction is, however, being eroded. Many of the new media developments impacting on the large consumer print publishers have major potential within the business information market.
The advent of the Internet, satellite television and digital television are driving merger and acquisition activity across three increasingly related industries:
information technology (IT)
the media (including the traditional business information market)
communications industries.
Business Information Supergroups
The past 5 years have also seen the establishment of a number of global business information supergroups. These groups are principally media companies, who have acquired major interests in the business information market. These groups are leading the changing structure of the industry, and include:
Reed-Elsevier
Reuters
Pearson
United News and Media
Primark
WPP
Taylor Nelson
The Dialog Corporation
Emap.
Knowledge Management
Knowledge management seeks to improve and manage a company's ability to utilise the available information resources effectively and in a timely manner to a company's benefit or advantage. Knowledge management first requires the establishment of a purpose behind a company's acquisition of information (i.e. it has to have an ultimate goal) and the formulation of a strategy to specify requirements and determine sources. A process must then be established to integrate internal and external information, turning it into valuable knowledge that delivers business advantage to the company's employees.
In recent years, more and more organisations are:
seeking ways to use information more effectively
seeking to use technology more effectively.
The result is that companies are employing techniques, information sources and technologies that offer more opportunities for the integration of information. They are increasingly seeking improved service in terms of the range of information available from major business information suppliers and how to use it.
Information Overload
Recent studies have shown that an excess of information is causing problems for companies around the world. A combination of globalisation and increased competition is driving the need for more information at the same time as the sources of information are multiplying. The result can be counter-productive, with companies trying to distil ever more information into something that actually delivers value to the organisation. As a result, companies are looking more closely at their information needs and thus turning to techniques and products offering improvements to knowledge management.
The Return of the Information Professional
Despite repeated warnings of the demise of the information professional, he/she is still an important hub for information access in most major companies. This is despite the introduction of easy-to-use online systems, Cd-roms, the Internet and push services. In many organisations, the role has been redefined and now encompasses a more strategic focus. Information managers are still required to deliver the traditional help and advice, but are increasingly involved in the formation of global business information strategies. These departments are expected to harness the opportunities presented by increasing access to valuable information and by managing the process to deliver real value.
The professional will often be required to:
develop and implement a corporate-wide business information strategy
oversee new systems to cross reference external and internal information sources
help end users cope with information overload.
Push technologies and online systems are still largely generic in nature, and the professional is still needed to customise information.
The information professional can often `discover' information by sophisticated multilevel searching, which by-passes the end user.
Business information is more important to companies today than in the past. Companies need information professionals who can tackle their information needs from a strategic point of view.
TheFuture
Key Trends in the Next 5 Years
Content will remain king. However, knowledge will command a premium. Skills at interpreting data will grow in importance, while those presenting raw data will decline in importance.
New media shakeout - new electronic media will consolidate.
Information delivery will cease to be an issue, i.e. content will be available across all formats.
Customised services will rise in importance.
Five elements will be essential for future success in the information market:
the ability to offer value-added data
the ability to supply information across a range of delivery media
the ability to present data attractively and in user-friendly ways
the ability to package information to meet the needs of specific functional or vertical market segments of end users
global solutions.
Recommendations for Information Suppliers
exploit new media opportunities through partnerships and joint ventures
build maximum flexibility into new media operations
increase the added-value element of products
exploit new media advertising opportunities
see the Internet as an opportunity not a threat
focus on emerging market segments and tailor products accordingly
adopt a business strategy which encourages scoping of the external environment to identify and rapidly exploit emerging opportunities.
Forecasts
Between 1998 and 2002, Key Note expects the business information market to grow by around 48.3% at current prices, or by 34.5% at constant 1993 prices. Growth in the market will slow compared with the past 5 years, given the expected slowdown in the UK economy, the growth of lower cost forms of information delivery (e.g. the Internet), and the increase in lower unit priced information cuts - targeted at small office/home office (SoHo) and small and medium enterprises (SMEs).
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