The Online-Only Transition
Publishers have dropped print brands while keeping the Web site running for years. But by 2006 it was as if a switch was flipped. Seven major titles made the transition to an online-only brand. And in the first quarter of 2007, there are already four.
But what needs to happen behind the scenes? What financial benchmarks need to be in place to make this a viable decision? And what's the cultural impact?
The trend could be traced back to CMP's Byte, which shut down its print operation in 1998 in favor of the Web site. It's fitting that a tech publisher made the plunge. In "modern" terms, both CMP and IDG have decided that they're no longer print-centric operations. Ziff Davis has also made far-reaching changes, in its corporate strategies in this regard [click here for their story]. And consumer publishers Hachette Filipacchi and Time Inc., among others, are dropping print brand components at an increasing rate as well.
IDG has been particularly vocal about its intent to veer away from print as the center of its revenue model, and the closure of InfoWorld in March was the latest sign of that strategy. "This has been a part of our dialog internally for some time," says Bob Ostrow, CEO of InfoWorld Media Group. "And we believed the market was absolutely ready to hear it now. A few years ago in any market, but certainly in technology, when brands left print to go live online it was the family equivalent of saying the dog has gone to live on the farm."
Ostrow adds that his audience has been flocking to online content. InfoWorld's ratebase was 185,000 while the site has 1.2 million unique visitors each month. In February, the site's traffic was up 85 percent year over year. And marketers have been close behind. "Microsoft has messaged that they intend to be largely out of print advertising by 2010," says Ostrow. "In January of this year, the enterprise market as we track it in print was down about 18 percent overall, and down 14 percent again in February. So the timing seemed right."
Tony Uphoff, president of CMP's business technology group, boils the decision down to brand and marketshare. "We look at this as we've radically redefined the company to have a digital media services and live events hub in the middle and hanging best-in-class print from that. But if we don't have a defensible number-one position in print in the markets we operate in, and have not redefined the print value proposition to a much more networked model with online and event components, then it's probably time to look at converting it to an online-only brand," he says.
Intelligent Enterprise went through this examination and Uphoff determined the print brand had become niched to death, but the Web site had a vibrant community. "We transitioned it to online only and traffic is up about 40 percent and online revenue is up dramatically," he says.
The Cultural Foundation
Both CMP and IDG have been shifting their cultures toward online- and event-focused business models for several years. "Everything that we were doing was for the Web first, and our efforts were focused on what we were doing on the Internet. You can't make this jump if you haven't done that," says Ostrow, who adds that from a revenue standpoint IDG wants to be less than 50 percent dependent on print. "InfoWorld is already there, so we had a business that could stand on its own two feet as an online and events business. I can argue print had really become a distraction."
Uphoff notes that without a major cultural shift, the transitions are less likely to stick. "It's hard as a company if you just do this as a one-off because your culture doesn't reward it, doesn't support it. If you're not fundamentally changing the company, it's going to be a challenge."
A stark reminder of this is the contrast between IDG and Meredith. A culturally adjusted IDG lost only 10 positions when it shut down InfoWorld. Meredith, when it closed Child, eliminated 60 positions and took a $3 million severance-related charge.