1- making information pay 2009 -- healy, leigh watson (outsell, inc.)

© 2009 Outsell, Inc. All rights reserved.

Book Industry Study Group

Making Information Pay 2009

May 7, 2009

Leigh Watson Healy

Chief Analyst

lhealy@outsellinc.com

A Time of Great Change: Insights from top publishing executives on the future of our business

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About Outsell

• Global team of 50+ professionals• Tracks information sectors in the US, Europe, and Asia • Fact-based analysis of markets, companies, trends,

technology• Actionable advice to private and public institutions• Subscription, membership, and custom consulting services

The only worldwide syndicated research and advisory firm serving the media and information industry.

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Insights from Industry Leaders

•How is the industry faring?•What is good performance in 2009?•What are publishing leaders doing?

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What’s Going On Out There

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Meltdown

• Industries get wake-up calls• Ego-driven, unhealthy vs.

transparent, accountable•Mass markets vs. long-tail• Industrial age vs. knowledge age•Recession accelerating structural

change•Not on the other side yet

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Signs Appearing

In•Conservation•Barter & saving• Transparency• Shared voices• Small• Living in moment

Out• Consumption• Spending & credit• Secrecy• Authoritative• Big• Living in future

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Longer Term

•World is global for knowledge•National & local for physical goods• Sustainability & citizenship are in• “Trust is the new greed”• “Flat is the new up”• Change always takes longer

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What Is Good Performance in 2009?

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Segment Performance, 2009

• BISG data confirms flat is the new up• Book publishing revenues flat in 2009• Adult & juvenile trade – flat to slight growth• Professional, scholarly – slight growth• Elhi and college – single-digit decline

follows 2008 growth• Religious – decline less steep in 2009

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Companies Doing Well

•Market share/brand leaders• Innovators and boutiques•Real-time data/work-flow solutions• Tactical support or lead generation•Digital DNA•Cash positive and building

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Benchmarks & Innovation Metrics

•Revenues on par or better than segment growth• 55%+ gross margins• 10%+ net income• $215K+ revenue per employee• 13% revenue from new products•New product cycles – 2 to 9 months • Price increases 5% or less

Respondent Base: 62

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What Publishing Leaders Are Doing

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Leader Sentiment

• Expect return to growth by Q2 2010• Staying head-count neutral•Salary freezes & reductions•Exiting poor performers

• 3 budget scenarios•Recession as opportunity

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Top Planned Investments

• Sales & marketing•New product development• Technology – digital tipping point• Staffing (editorial, IT)• Process & infrastructure redesign•Global expansion

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Innovation: Remains Essential

Source: CartoonStock

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“We’re moving from a physical war fought with weapons to an economic war fought with information. We must restructure our business to fight this

war and challenge our business models, cost models, etc.

It is all shifting.”

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Five Key Themes for 2009

•Content/platform & experience execution•Business model focus & execution• Social media/community execution• Strategic marketing & product

marketing execution•Operational execution

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No Guts, No Glory

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