Many years ago when I had the good fortune to work for Ziff-Davis, I read a quote from Bill Ziff about how publishing had changed. I’ve lost the quote but it went something like this:
“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.”
I brought this idea up speaking to a roomful of publishers at the Niche Magazine Conference in April – that the future may be linked to the past and that the magazines of tomorrow need to be published by independent entrepreneurs and smaller, dedicated companies.
Like Inc. Magazine, which was purchased a few years ago by Morningstar founder Joe Mansueto, Business Week under Michael Bloomberg can hopefully enjoy a life beyond the super strict demands of a publicly-held company like McGraw-Hill.
Essentially, Michael Bloomberg and Joe Mansueto can afford to ride the economic ups and downs over time and frankly, can also afford to publish at a loss. Even though someone buys a professional sports team telling themselves that they can make it profitable, we all know the real reason is that they are a fan.
If the long-term future of magazines, the short-term will still be wrenching. All the private equity-held companies are reviewing terms with their lenders realizing that these much smaller businesses cannot support the debt. And the industry sea change toward an online world continues to claim many casualties. Yesterday’s shuttering of the former Commercial Property News by Nielsen brought another shudder: at Miller Freeman this David Nussbaum-created title was one of the biggest revenue producers and year-after-year the #1 most profitable title in a field of 60 in the 1990s.
It looks like time to bring on the enthusiastic eccentrics.
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Love the notion of enthusiastic eccentrics Ted, and completely agree that the financial players like the PE guys have had horrible impact on specialized publishing/media, but have to disagree with the comparison to sports team owners.
ReplyDeleteUnless you think there should be a revenue sharing structure like MLB?
Keep up the fight!
I don't know...depending on enthusiastic eccentrics who are able to run losing businesses because they're fans doesn't sound to me like a hopeful vision for our industry.
ReplyDeleteCygnus, Questex, Conde Nast, Nielson, Penton? That's just the last 5 news days.
ReplyDeleteTell me where to find the hope and I'll load up on it. We're doing well ourselves, but probably feeding on carcasses right now...
The idea was that privately held businesses may be able to ride out the storms, focus on the longer-term view etc....than publicly held or PE-debt-laden roll-ups.
That said, I'm as blind to what the future holds as anyone else.
:)
Perhaps instead of thinking of running losing businesses, one should think of them as cyclic businesses that are currently in the "down" part of the cycle.
ReplyDeleteAn enthusiastic eccentric can support a cyclic business (like a beloved magazine) during "down" parts of the cycle because he/she believes that the business has a larger importance than its financials represent. The enthusiast has a big-picture viewpoint -- maybe the glasses have a rosy tint, but the view is far.
By contrast, the managers of a public company or a holding company must "serve shareholder value" by looking at the balance sheet, the whole balance sheet, and nothing but the balance sheet. The view is quarter by quarter, with little value assigned to the social or emotional value of the media property.
yeah - like he said. Hey, you want to start an enthusiastic eccentric business together?
ReplyDeleteSure! (But this time, let's write a business plan!)
ReplyDelete