The meeting made it clear that the future—with all its good (increasing revenue opportunities on the Internet) and all its bad (escalating postal costs)—continues to rush headlong at business media executives. It also made clear that the key concern of these executives is preparing properly for this future.
In his keynote address Tuesday on the topic of monetizing electronic brands, L. Gordon Crovitz, president of Dow Jones Electronic Publishing, outlined the oft-chronicled rise of wsj.com and its successful adherence to a paid subscription model.
Currently, the online Journal has 764,000 subscribers, making it the fifth-largest U.S. newspaper in terms of circulation, trailing only USA Today, The Wall Street Journal print edition, The New York Times and Los Angeles Times.
Although the Journal’s initial decision to charge for its online product is seen as prescient, Crovitz said the decision was not a revolutionary one. “Radical strategies and Dow Jones do not go together,” he said. It just made sense, he said, to not charge for content in one medium that you charged for in another.
The media as a whole have “devalued brand and content by giving it away on the Internet,” Crovitz said. Reversing this trend online poses challenges for b-to-b publishers, many of which operate with a controlled circulation model. Crovitz acknowledged that b-to-b publishers may “have the greatest challenge in the new world.”
He pointed out that b-to-b publishers need not attempt to charge for all content, just a portion of it, to create a subscription revenue stream. “Simply, only asking someone to pay for something is a wonderful way to tell them that it has value,” he said.
Earlier on Tuesday, David Straus, a partner at law firm Thompson Coburn and ABM’s postal counsel, warned about rising postal costs on the horizon. In addition to the 5.4% rate hike expected to go into effect in early January, Straus
said he expected the U.S. Postal Service to submit a proposal for a more significant rate hike to the Postal Rate Commission next spring.
Straus said he expected this rate hike, which would likely go into effect in 2007, would approach a double-digit increase. However, this increase would likely be applied differently to different publishers, he said. Those that have adapted to co-mailing, co-palletizing and other similar opportunities would likely see lower increases. Those that mail the “old way,” Straus warned, could see steeper increases—perhaps in the 20%-to-30% range.
The opportunities provided by the Internet and postal rate hikes are not mutually exclusive. As Ned Borowsky, president of North American Publishing Co., pointed out during his segment of the “Building Your E-Media Infrastructure” panel discussion, publishers can save postal and other circulation-oriented costs by investing in digital replicas of print magazines.
The titles of other presentations at the Top Management Meeting reflect the event’s preoccupation with change and the future: “Blogs: Extraneous or Integral?” “Vertical Search: Is This the Next Big Revenue Opportunity?” and “Developing Your Rich Data Model.”