The closure of 23 trade magazines at Reed Business Information in the US seems to have shocked industry commentators.
The closure of titles like Construction Equipment and Modern Materials Handling is part of Reed Elsevier’s long-running plan to winnow down trade magazine publishing to a highly profitable core (or exit the business altogether).
Presumably, RBI’s UK operation in Sutton is next in line for a batch of closures. Over the past three years, despite a change of chief executive, Reed Elsevier’s desire to get out of trade publishing has proved unwavering. What used to be a £1bn-turnover business with operations in Asia, Europe and the US, is rapidly getting smaller.
Yet this doesn’t necessarily mean that trade journalism is doomed. On the contrary, I suspect that new opportunities are opening up on the periphery of markets. At Folio, columnist Ted Bahr pinpoints a persistent problem experienced by large companies running huge trade magazine portfolios. He quotes Bill Ziff, the late guru of special interest computer publishing:
‘It used to be that our business was run by enthusiastic eccentrics–people who worked and lived day in and day out in their markets and hardly even realized that they were running a ‘business,’ in the classical sense, at all.”
The big conglomerates reaped economies of scale by buying and merging these small entrepreneurial single-market publishing operations during the 1980s and 1990s.
But there was a downside. Over time, the best sales people became publishers and then publishing directors. As Bahr argues, they were ‘promoted away from their markets, from their customers, from their street-level expertise”.
These ‘professional managers’ended up ‘spending their days in budget and forecast meetings and battling other execs. . . for investment and acquisition dollars”.
Bahr himself worked as a publisher at Miller Freeman. He recalls his ‘acute embarrassment’at being ‘paraded around as a high level executive at the key trade shows for these different markets when I barely had a clue what was going on. . . “
This, I reckon, will ring a few bells for many trade publishers. Falling out of touch has always been the big risk inherent in conglomerate-style publishing (likewise, it’s a risk that confronts those who would like to consolidate local newspaper ownership even further).
The negative effects of centralization work their way through the system in different ways. Recently, I talked with a PR who works in IT, the same market in which Bill Ziff made his millions and Ted Bahr plied his trade. He bemoans the way in which a sharply-reduced number of trade titles has become obsessed with the Goliath-sized US multinationals that have consolidated the IT industry.
At some titles, he suggested, there’s no space for stories about start-ups. Senior writers who used to track new technology now confine themselves to writing about the top ten hardware and software companies.
The reason for this is obvious. As editorial teams become smaller, this is the core area of coverage that editors cannot abandon. The industry’s biggest players, after all, still buy advertising and sponsor events.
Yet within this retreat to the centre, a couple of traps await editors. Most of the giant technology companies seed the web with content designed to render redundant the trade journalist who interprets industry dynamics.
A vision of the future persists in which corporations speak directly unto corporate buyers. Cash that used to be funnelled into trade advertising is being re-directed to PR and social media. Under these circumstances, on mainstream trade titles, the endless rewriting of press releases emitted by the industry’s big players becomes utterly self-defeating.
In addition, of course, innovation frequently occurs first at the periphery of markets. If trade publications aren’t patrolling that periphery, they risk being on the back foot when the dynamics of their industries change.
Yet look down the list of the titles earmarked for closure at RBI in the US. One thing emerges clearly. Most of the doomed publications are niche titles serving markets (engineering, construction, catering) that have been deeply disrupted by recession.
This tells us that the old trade publishing model of a big cash cow surrounded by niche titles has been rendered unworkable in some markets. In others, as UBM observed when it unveiled its full year results in March, sufficient demand exists to maintain ‘one or two leading titles, a position which each market will reach by means of a ‘last man standing’ process”.
In other words, the big publishers will circle their wagons in an ever-tighter defensive cordon. They will try and fail to make ‘one or two leading titles’cover vast stretches of vertical market activity.
Thankfully, the results, for everyone else, should include plenty of opportunity.
It’s time for the talent that got sucked into the centre of companies like RBI to move out to niches on the periphery. Here, the carpet-bombing tactics of PR departments lose their effectiveness and the editors of big titles dare not venture. If you can build a business that mixes authoritative insight with data-driven services in places like these, so much the better.
I’m not sure that large companies can manage this trick. (They’ve always been better at buying than building.) But for enthusiastic eccentrics like the late Bill Ziff who are prepared to work and live in their markets on a daily basis, niches, more than ever, represent the future.