Mar
4
Sell the Magazines – NOW!
Filed Under B2B, Big Data, Blog, Cengage, Financial services, Industry Analysis, internet, Publishing, Reed Elsevier, Thomson, Uncategorized, Workflow | 2 Comments
As a Thomson man of the generation of ’67, I was well schooled in the dictum “its not what you buy, but what and when you sell that makes the real difference.”* And having spent almost three decades button-holing anyone who would listen, like some crazed digital ancient mariner, on the importance of building digital presence in B2B publishing and information markets, I should probably be pleased to see headlines in the Financial Times (3 March 2012) heralding the sale of EMAP’s print assets (“Analysts say EMAP faces challenge to move away from print”). But I am not. I know exactly when these print assets should have been sold: in 2002 at the end of the Dotcom Bust. And I cannot persuade myself that a wrong move then will be rectified by a pointless move now, or that value will be added to anything by selling the subscription/advertising print stable at EMAP – or at UBM, or at Haymarket, or Centaur, or Incisive – to someone who is simply going to live on a declining annuity until it expires. There will in any case be few buyers, and those who do appear will not want the stable, but just one or two of the old nags. The analysts who shriek the headline of this piece are simply transaction mongers who have a firmer grip of deal commissions than they do of the current strategic realities of B2B. So lets go back to 2002 and see what has happened after the management of B2B information and publishing and events decided that it was far too early to exit print subscriptions and, like the regional press, the market would come back to them.
By 2005 it was becoming clear that the bits that worked in B2B, outside of events, were information services and solutions. By that year controlled circulation magazines and newsletters, which had proliferated and at times been generated by online at the end of the previous decade began to wilt. Just as in the pre-2005 period we had spoken of VANs and VADs, so we began to talk about “vertical search” (it turned out to be much the same anyway) and started providing tailored information to self-defined users in commerce and industry. We were beginning to experience for the first time what it was going to be like to live in a “networked society/economy”. A small revolution was taking place: managers were beginning to have to find out what their users did for a living and construct solutions around their daily lives. This meant specialization and expertise in particular verticals: managers could no longer be shifted from title to title on the basis that they knew journalists and advertisers and everything else was the same whether you were publishing in machine tools or in ladies fashions.
And then we came to workflow. If we were really entering an information solutions-type world (where Thomson Reuters had already gone in IP and GRC , and Lexis Risk in insurance) then we had to provide our content directly to the desk of the user, sliced so that it modelled his working patterns, and supported by software tools that added value to it and kept us essential to his processes, and thus too important to be lightly discontinued. And how did we plan to earn his trust in this guise? By either inventing a new brand (think Globalspec in engineering) or by using our old print brands to ensure user confidence (think Bankers Almanac at RBI). Never mind that the print which supported those brands had eroded away, since they were there for entirely different reasons.
And now we are laying another layer in digital development on top of all of this. We now talk of Big Data, of using the services we have created for users as a sort of focussing glass so that we can go out from them to the client’s own content and all sorts of other datasets and find linkages through data mining and extraction, squeezing fresh insight all the time into the workflow of users who, wherever they work, have increasingly become, like us, knowledge workers. And our events activities increasingly morph into always-on trading and learning experiences, where we do introduce clients to the range of products and services in the sector, update and inform on new releases to people who have said they want to know, and move increasingly into the training and professional development of the sectors that we have chosen. Do you see where we are going? We are going to be the full service providers to a handful of vertical markets which we feel confident about dominating.
Why are we confident about that domination? Because we have the brands, many of them over a hundred years old in this country, which our verticals were brought up upon. And behind those brands are archival morgues, full of data with residual value in a Big Data sense. We did not sell those brands in 2002 when they were a going concern, so why sell them now when they are a cause for concern. By all means close the print, by all means reconstruct the service values using far less journalists in targeted niche environments online. By all means drive towards areas where you have real data intensity, but on the way remember the community and its existing brand affiliations. You want to take them with you.
Which brings us back round to EMAP. I see no point in hanging on to peripheral services, even data-based services like DeHavilland bought as recently as 2007, if they have no strategic coherence in terms of the markets that give EMAP positions of strength. I take these to be construction, local government, broadcast media and fashion. If strength in automotive cannot be linked to the Guardian’s position in Trader Media, then sell that too. But hold onto brands where they can be used to give community credibility and data where it can give archival searchability. By selling them you get a smaller but more profitable business. And that is also the result of digital network development of the type described here – smaller and more profitable businesses. Just don’t throw away something which is pretty worthless now on its own, but which may be needed on a journey to a much better place.
* Note that the companies that Thomson SOLD in the mid-1980s in the UK form the majority of EMAP and Trinity Mirror today, as well as large chunks of Springer and Infinitas, and elsewhere and afterwards the bulk of Cengage and a big portion of the US regional press. Were they right or not?
Oct
20
Learning, management and leadership
Filed Under Blog, Cengage, Education, eLearning, Industry Analysis, internet, mobile content, Pearson, Publishing, Uncategorized | 1 Comment
There is nothing more certain in the information industry than that, once past a certain point, the big only get bigger. Thus I see no logical end to the steady growth of Pearson, over the past decade, as the leading force in education systems and services. Indeed. I predict another decade of such growth, driving national education champions to despair and frustrating would-be competitors who lack the global outreach. They now have the size to balance slower running developed world markets against fast-flowing BRICs educational economies. While their competitors want to play them on a pitch named Textbooks or Blended Learning, they have the scope to introduce just the right amount of technology, curriculum control and assessment into the mix to satisfy a Brazilian state, an American city school board or a consortium of vocational training panels. Their custom business will build over time. And so will their approach to individualized learning.
In short, over the next decade they will become recognized for what they now are: the behemoth of education with every growth option at their disposal. As a company that early recognized that the enterprise systems of schools were one of the keys to digital education they can be systems and solution suppliers of turnkey environments with the content in place. They can get to grips with the assessment engines of the world, using their experience of owning the major US solution supplier as well as a major UK examination board to drive national systems globally. While we have been saying for 20 years that education is different because of national and cultural distinctions, they have got on with identifying the things that education has in common – from sorting out timetabling, communicating with parents, marking exams and providing administrators with performance reporting – and have made a business of this alongside schoolbook supply. Does any other player in their competitive sector have a strategic alliance with Oracle?
Pearson has always been able to change. A nineteenth century builders merchant from Yorkshire, UK, became, in the hands of Weedon Pearson, a successful oil wildcatter in Venezuela and finally the collector of great tradeable brands in mid-twentieth century Britain. Some of those brands remain in terms of Penguin and the Financial Times, but as we saw with IDC, having a few brands around to toss into the investment fire is a great way of fueling the next stages of growth, just as the last realization from the last sale is now lighting acquisition fires in China, Brazil and India. So we should be asking what next at this point. And we should be interested in the parts of the education scene where Pearson currently has little scale or penetration.
I once had the enjoyable consultancy task of introducing a major hardware player to “the largest educational publisher in the world”. Dreams of strategic alliance were in the air. My hardware client was frankly disappointed: “we get more revenue from printer cartridges sold to education than they do from textbooks”. Now the roles are reversed. My hardware friends are buying search software to stay alive and Pearson are powering on, following a strategy which will undoubtedly see them emerge as a major owner of schools and universities in a number of countries, the owner of distance learning institutions with global outreach (including degree awarding and exam setting bodies in countries like the UK), a partner of governments in delivering national solutions and a leadership role in the flight from content into an individualized learning environment. And they are the only player in the sector big enough to do the whole education value chain.
They have invested and played around experimentally in some sectors for years, however, without coming up with a real strategy. Learning management is one. Working with Blackboard was one phase, buying Fronter was another. Yet their latest announcement, last week, that they will now enter a partnership with Google to develop OpenClass as a free generic LMS available globally on the Web is something else again. Here is a well-tenanted marketplace, with Blackboard and open source Moodle occupying some 80 per cent between them. Pearson seemingly have no real axe to grind here – except pure disruption (and they have teamed up with the arch-disruptor to do that). At the moment huge amounts of Pearson content must sit on Moodle or Blackboard installations. But I suspect that Pearson think this is a temporary world, that the future of learning management may have mobile and Cloud attached to them, and that they need to be somewhere fairly unique, where even larger competitors like Cengage could not follow. OpenClass could be a place like that.
Finally, as Pearson puts further distance between itself and its rivals, it is interesting to see how it now feels that it is important to build viewpoints and concensus in education as well as develop systems and solutions. The work of the Pearson Foundation was highlighted recently in Media Taylor (www.mediataylor.com) I am not sure that I take such a sinister view as this blogger, but, especially in countries like India, it will be important to prepare the ground and widen the options. Major players like Pearson have an interest in this – but also a duty of care. Since there are such plentiful national educational interests that Pearson will not face competition issues in most of its markets for some years. In the meanwhile informing and educating educational buyers could be a critical part of that.
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