The impact of digital on the media continues as a main theme in the news and blogs. My excerpts from the Guardian certainly attracted attention. But I missed an equally important piece later in the GuardianMedia section about how IDG, one of many B2B companies changing its business model.
In 2007 it had revenues of more than £3bn, it publishes more than 300 magazines and 450 websites globally (including Computerworld and InfoWorld), employs more than 13,000, and encompasses the huge global analyst organisation IDC.
Newspaper and magazine publishers are beginning to conceive of a future without print – but in the B2B sector, the digital future is already here. IDG has axed print editions of around half a dozen of its most popular magazines and Pat McGovern, the company’s founder and now chairman, says he believes virtually all B2B publishing will move online in the next 10-12 years.
But axing print editions of popular magazines is a bold move and McGovern acknowledges this was a risky strategy – InfoWorld was distributing 180,000 copies in the US every week when it decided to ditch print, retaining online and events. “Many said without print people wouldn’t be reminded every week of our brand and 40% of our revenue would disappear overnight,” he recalls.
One year later McGovern, who still privately owns IDG, says InfoWorld’s online revenues had trebled, the magazine’s overall revenues were up 10%, and without the costs of print, paper and postage, profit margins went from -3% to 37%.
But ditching print operations isn’t a global strategy: the pace of migration to the web varies by country, according to McGovern. IDG doesn’t have print titles in Korea, and has axed most of them in Japan, for instance, but in India, where internet penetration is less than 3% of the population, he believes print will be the primary platform for some time to come.
It is, however, much cheaper to test the waters in new territories online. “To launch a whole new website costs maybe $20,000 [£10,000], versus $400,000 for a new magazine,” McGovern says.
In the UK, where IDG’s B2B division is less than a decade old, titles such as Computerworld have been web-only from the outset, with 60% of the content on the company’s B2B sites created by users. “It’s nice to have more than double your content without any cost,” says McGovern.