Monthly Archive for November, 2009

New Data: Subscription & Membership Site Publishers Bullish on Launches & Acquisitions for 2010

Category: R&D + New Site Launches and Subscription Site M&As

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According to this new data from SubscriptionSiteInsider.com’s own annual survey of subscription and membership site executives, the industry is looking at expansion for 2010.   302 publishers and other executives responded to these questions — a record for industry studies.   They included b2b content sites as well as subscription sites selling content access to consumers. All of the executives were actively involved in a paid content subscription site (we surveyed other online and offline publishers separately.)

Some analysis:<ul>

<li> Although mobile publishing is hot in the media, these executives are apparently far more interested in expanding in the platform they know is proven to work for them — subscription sites.</li>

<li> Experienced site publishers are interested in developing sites based on offline brands… but not so much that they’ll go out and look for the deals aggressively.  This is an opportunity for offline brands, ranging from branded instruction books and TV shows, to celebrities worthy of membership-based online fan clubs, to reach out to publishers who already know what they’re doing in the space.  We’ll definitely be covering the hows of this type of deal in 2010.</li>

<li> Folks are also interested in acquisitions, but again mainly in a passive manner.  I actually suspect this is because there are very few information sources currently for subscription site acquisitions… we’ll be launching an M&A center fairly soon to fill that gap, so contact me if you want to be listed as  a buyer, seller or advisor!

<li> Although execs are not that interested in trying to turn free content into a paid site (a tactic that has worked well in the past and we’re building the Case Study Library to prove it), I suspect paid ebook properties will provoke a different answer.

<li> Launches, launches, launches.  Well, your first site is always the hardest.  Once you’ve got the tech, content, and marketing nuts cracked to your satisfaction, why not cookie cutter your systems and processes out over additional sites?  It’s a very normal business model for offline subscription newsletter publishers.   So I expect to see a lot more of that too, with typical site publishers owning multiple titles.

What’s your take?  Let me know below….
Posted on: 11/27/2009
By: Anne Holland
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M&As in New Media: Avoiding the Tire-kickers & Romeos

Category: Subscription Site M&As

As revealed today in The Wrap’s WaxWord column , that media investor Jimmy Finkelstein who made his fortune in part by founding and selling off the National Law Journal,  is playing his court-them-and-dump-them game again.  In the past he came close to acquiring  New York magazine and Thompson Educational Publishing (in fact news stories in 2004 reported the Thompson acquisition as a done deal) but then backed off.  His newest dumpee is the blog iwantmedia.com whose publisher Patrick Phillips revealed Finkelstein spent months and months in 2008 wining him, dining him, discussed a price and signed an NDA, only to bail unexpectedly when The Hollywood Reporter came up for sale.

In my experience having both bought and sold media properties, and worked for a company that was a heavy grow-by-acquisition player,  in a genuine M&A process the length of courtship is generally decided far more by the seller, than the buyer.    When a seller is truly ready to sell, they sell.  Sometimes it’s prompted by bucketloads of money, but if the seller is also the founder, usually money isn’t the main motivator.  They’re just ready to sell, that’s all.   It’s like a guy hitting that moment when he’s ready to get married, he wasn’t before and now, bang he is.  Once he is, the wedding happens pretty quickly, even if he hadn’t been dating anyone shortly before, or even if the current girl isn’t as great as  a past one had been.

On the media company buyer’s side, sincere courtship can take a much longer time.  You’re schmoozing the properties you want to buy in hopes that someday when they hit that “want to sell NOW” wall, you’ll be on the shortlist of people they call first.  You may even be able to seal a deal before it hits the open market and the price possibly goes up.  I’ve known  media company buyers who spent literally decades  making friends with the people whose companies they wanted to buy, keeping in touch every quarter with a call, a note, and perhaps an annual lunch.

But the key is the word “sincere”.  You don’t waste your time schmoozing a property you’d not really interested in.  If you’re not ready to act,  why bloat your calendar with all those lunches and dinners?  Unless perhaps you’re a professional Romeo and who loves the pursuit but not the marriage.

If a buyer is sincere, they’ll be ready to act fairly quickly, and sign an initial offer letter within a matter of weeks.  The due diligence may take longer, often dictated by what shape your records are in (and for smaller publishers, usually they’re in somewhat bad shape.)  But even due diligence should not take longer than three-six months max.   If a dealmaker is dragging his or feet longer than that, either their access to cash isn’t as easy as they made out, or they’re enjoying the courtship far too much.  Get out of the relationship.  If you’re ready to get married, don’t waste your time and emotional energy by sticking with a guy who really only wants to date you.
Posted on: 11/24/2009
By: Anne Holland
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34% of Subscription & Membership Site Benchmark Reports Are Sold Outside the USA

Category: R&D + New Site Launches Tags: , .

Normally, I’d expect anywhere from 7-17% of sales for a paid content b2b product to be made to customers outside the US.  That’s based on a bazillion years of real-life experience.  (OK, not a bazillion, I’m still in my 40s, but you get the picture.)

However, so far 34% of the customers for our new Subscription & Membership Site Benchmark are international.  It’s a clean split between Canadians and Europeans.  What does that mean for the site launch horizon?  Murdoch’s just as famous (or possibly more) elsewhere than he is in the US, and he’s been bombasting a lot this year about subscriptions.  Plus the Guardian bought paidContent.org a couple of years back.   Not to mention the fact that SubHub.com – one of the do-it-yourself subscription site platforms — is based in the UK.  (Strangely, the programmers for SubHub’s most direct competitor, US-headquartered Membergate, are also UK nationals.)   And there’s – old but presumably somewhat good-  data showing that Europeans using online dating sites view 44% more pages (that’s 310 pages each per month) than their American counterparts do.  Lastly, Europeans are far more accustomed to using their phones for paid mobile apps (for example, in Belgrade you pay for city parking with your cell phone, not change in a meter), so the likelyhood paid content on phone will be profitable easier and faster in Europe is , well, very likely.

We’ll be tracking launches on the main part of the site when it’s launched in January 2010… so there’s something to look forward to.  I guess I’ll place a personal bet now that European and Canadian sites will be, oh, let’s say 34% just for the heck of it.
Posted on: 11/23/2009
By: Anne Holland
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