Who Reads Print, Anyway?

A couple of years ago, I sat in IGN’s board room in Brisbane, California.  CEO Mark Jung and his lieutenant Richard Jalichandra were telling my President and I - leading online publishers in the men’s lifestyle space - that it was a matter of time before most if not all of print would go digital.  “Women only read magazines,” we were told. 

Technolgoy and video games (what IGN focused in) would first see that outcome, but over time, all print would become digital.  Over time, I realized, they were right, but not the first to say that.  Rupert Murdoch, who went on to buy IGN eventually for $650M, had told his lieutenant back in the 1980s that all news would be digital.

Media Moguls Know Best?

And most media moguls have seen the writing on the wall, and those who adapted are thriving; those who did not are now paying the price.

Look Up, Literally

Canada is usually behind the curve, in many ways.  But if you take a look at two of the media moguls that have stood tall at one point or another, Canada has offered some good lessons to media ownership groups.

In the 1990s, Thomson - one of the largest media groups in the consumer space - completed what they had started in the 1980s, by almost completely getting out of the print newspaper consumer space and embracing digital.  You can see this some more in this interactive timeline of Thomson.

Today, no matter what magazine or newspaper you read, if there is any underlying data from the worlds of legal, health or business, there is a very good chance that the source credits Thomson.  When Ken Thomson died a few years ago, he was Canada’s richest man with a net worth over $20 billion.  His company was handed off to his son David Thomson (Ken himself took it over from his father) and is today generating north of $8 billion in annual revenue.

Ken Thomson, that’s David’s father, was known to be stingy.  When he sold most of his assets to a lad named Conrad Black, many people wondered what value Black would wring out of them if Thomson could not.  The word was, that while Thomson’s management style was stingy, Black’s was brutal (as Lord Conrad Black’s trial is going on in Chicago, any day now I’ll be publishing a long profile on the man who at one point boasted one of the largest media companies in the world with over $2B in annual revenues in 1999 and 2000).

But even Black realized by 2000 that newspaper companies’ valuations had peaked, and he began to unload his assets, one by one.

Today we see many newspaper companies scrambling to survive, Infoworld is following in the footsteps and doing digital and events.  It’s a matter of time now before more and more consumer and trade publications follow suit.

Silver Lining: Buy Low, Sell High

However, the space holds a lot of value, and as we showed in the valuation comparison between 2003 and 2007, a lot of the negativity surrounding print has to do with market sentiment. 

A wise investor might consider buying up and rolling up assets in print - be it newspapers or magazines - restructure them, slash costs, leverage resources and reposition them as digital news and information organizations that offer a unique yet tremendous global and local reach to advertisers.  There’s plenty of value there.  Maybe it’s because I already operate online, but if I had a $5 billion warchest, and I had to go out and look for value, I would probably go lookout for assets in print and take them online. 

That’s the problem of the print literati, they are so attached to their past that they never learned to appreciate and value their potential future. 

What’s that saying?  “The first generation creates a business, the second makes the fortune and the third destroys it.”  If you rank every single family running a newspaper empire, I sure do wonder which fall under which.

But then again, I am not on the inside, and maybe therein lies my willingness to shatter the model and build it back up again, reflecting the realities of a 21st century in the post digital revolution landscape.