• Both small (<$5M) and large ($5M+) B2B publishers rely mainly on print advertising for revenues.
• However, when comparing online content, events, data sales, and print content, both large and small publishers said online content and events were the most profitable areas for them (see chart below).
• At the same time, 36% of smaller publishers and 11% of larger publishers reported zero revenue from online content (perhaps they need to start reading Subscription Site Insider?)
• Most publishers across the board plan to invest more heavily in online/e-media content in 2012, with employees being their biggest investment.

Technology Investments

The Folio report also had some interesting data on technology investments for other digital publishers who might be wondering how much they should be spending on technology.

While there was a wide spread in the data (see chart 10 below), it turns out that, among small publishers, 27% spent $10,000-$20,000 on technology, 35% spent less than $10,000, and 22% didn’t invest at all. More interestingly, of these technology investments, 35% invested most in computers, hardware, and software. Only 16% prioritized their websites, and 8% spent the majority of the technology budget on content management systems (Chart 11 below).

Among large publishers, the picture is a little different, with 26% of them spending $100,000 to $249,000 on technology. An additional 18% spent $250,000 to $499,000. They also seemed to diversify their areas of IT investment, with 24% investing most in computers, hardware and software, 18% prioritizing their websites, and 23% spending their tech dollars on content management systems.

$$ Invested in Technology (©Folio:)

Largest Area of Tech Investments (©Folio:)

M&A Outlook

The one other gem of information in the Folio: report was this: Small publishers are luke warm to mergers and acquisitions, with only 7% planning on buying another company and 9% hoping to be bought.

Large publishers, on the other hand, are on the hunt for mergers and acquisitions, with 30% looking to acquire another company. Only 1% expect to be acquired.

This figure, of course, does not account for all of the company’s revenues as LinkedIn has a hybrid subscription-advertising model. Advertising brought in $48 million, accounting for 26% of the company’s total revenues. Yet, the 91% growth in subscriptions noted above is promising, as subscriptions now take up 20% of the revenue pie. Interestingly, the company’s biggest revenue generators are its B2B offerings — Hiring Solutions and Marketing Solutions — which generate 54% and 26% of total revenue in the first quarter, respectively.

The company is also employing some smart subscription benefits to increase retention. After finding that 22% of traffic in March came from mobile devices, LinkedIn introduced an iPad app. CEO Jeff Weiner said, “we believe we can create more value by enabling our paying customers and subscribers to get access to those products and services regardless of where they are.”

Furthermore, the recent acquisition of SlideShare for $119 million indicates that LinkedIn knows it must highlight its online features. While some professional networks would seek to make exporting contacts or printed directories an added benefit or upsell, LinkedIn is strategically planting retention seeds by making its online offerings more engaging and unique to anything offline.

For the full year, LinkedIn forecasts revenue of $880 million to $900 million. Adjusted net income is estimated to range from $170 million to $175 million.

That may be changing as a number of notable academics are calling for an “Academic Spring.” Their gripes are many, but center on the current trend of publishers charging for user-generated content. As The Economist states:

Academics, who live in a culture which values the free and easy movement of information (and who edit and referee papers for nothing) have long been uncomfortable bedfellows with commercial publishing companies, which want to maximise profits by charging for access to that information, and who control many (although not all) of the most prestigious scientific journals.

I suspect the ethics of charging for user-generated content is only going to become a bigger debate, especially with Facebook’s recent IPO and YouTube’s flirtation with charging for subscription channels.

In what seems a poorly-planned defensive move, scientific journals now want to get paid for anytime an article is included in a patent application. While we usually applaud creative revenue streams, this one really does go against the idea of fair use — that is, to disseminate ideas to the public. More importantly, if it becomes  financially prohibitive for anyone to note the ideas in your publication, you will likely cease to be a publication of note. With an mean average of two readers per article (that’s a lifetime score!), academic publications should see citations and references as good word-of-mouth marketing, not a copyright infringement or potential revenue stream.

It seems that during the depths of the recession in 2008-2009, the company’s information service was most often an “impulse buy” for credit pros who desperately needed to figure out credit-worthiness in a shifting world. But, as the economy stabilized in 2010, CreditRiskMonitor’s subscription sales slowed….

What to do? The company shifted its marketing messaging and retrained its sales reps to promote a benefit better suited for a stabler-but-still-sucky economy — corporate cost control data. After repositioning, subscription sales began to rise again, and are expected to continue rising.

Great lesson: never assume your site’s unique sales proposition (USP) will remain the same over time. As your market shifts, your USP has to shift as well.

Once a month, the ““What’s Your Diagnosis?” challenge email email is sent with a patient presentation of symptoms but will stop short of a diagnosis, instead asking the audience of medical professionals to post their guess at the “What’s Your Diagnosis?” blog. Five winners are randomly chosen from the comments to receive a free copy of the latest issue of Emergency Medicine Practice.

The next week, a follow-up email includes the correct diagnosis and a list of the randomly chosen winners. Ivy says the “What’s Your Diagnosis?” email series is very popular with the EBMedicine audience. This is the kind of email engagement and marketing that almost any subscription site can try even with a simple trivia question that’s answered in the next email.

For this complete Case Study, join Subscription Site Insider now as a 10-day trial Member for just $1.

This is big news for subscription sites who are intent on protecting their copyright and preventing piracy. It is also a warning to businesses that they need to purchase group subscriptions for their employees. (We will be publishing a group sales toolkit at our sister site Subscription Site Insider later this month.)

SIIA pursued the case on behalf of Providence Publications, publisher of the Cal-OSHA Reporter and a member of the Specialized Information Publishers Association (SIPA).  SIPA members may participate in SIIA’s antipiracy program as a complementary benefit of SIPA.

HMH builders admitted to purchasing a single subscription of the Cal-OSHA Reporter—a newsletter about California occupational health and safety— and, without a license, electronically copying and redistributing the newsletter to hundreds of employees over a period of years. The company claimed, though, that fewer than 10 employees read each edition.

“While we respect the good people at HMH Builders, we are happy that the others have been brought to heel,” said Dale Debber, President of Providence Publications. “Many good people simply don’t understand that the effective theft of premium quality specialized content is the same as stealing from a store or a bank.”

• E-media was the fastest growing revenue stream last year (cited by 68 percent of larger publishers and 52 percent of smaller publishers).  This is where you need to put your money. If don’t already have a subscription site, learn how to run a membership site effectively. Repurpose your content into mobile apps; yes, there is a market for b-to-b apps. Keep an eye out for what’s next in the online space.
• 35 percent of larger publishers plan to launch an online publication compared to 20 percent who expect to launch a new print magazine in 2011. Meanwhile, 27 percent of smaller b-to-b publishers plan to launch online, while just 13 percent are planning a magazine startup. A third of publishers are  launching an online startup this year. These days it is usually cheaper and less risky to launch online. My greatest fear in seeing these numbers is that another company might launch my idea before I do. Get out there and do it now and don’t use money as an excuse. Our recent Case Study on NeedATopic proved that a membership site can be launched in less than a week for less than $1,000.
• Larger publishers said the events part of their business was their second-fastest growing revenue stream. No matter the size of your business, if you’re not doing events, you’re leaving business on the table. Start small if you have to with a half-day or full-day conference near your headquarters. Learn from the experience and grow. Don’t forget virtual events like trade shows and education.
• The majority of both larger and smaller publishers  say they expect a double-digit increase in revenues this year. Business is back. Ask yourself, where can you find double digit increases in your revenue streams?

Founder Harry Schuhmacher grows profits by launching paid sister newsletters which he markets to his current customer and prospect base. For example, he launched a very successful paid newsletter just for the craft beer industry.

Key: He picked the topic by watching which Beer Business Daily headlines about niche topics generated the most interest. (News about the fast-growing craft beer segment is in high demand by the newsletter’s subscribers from the beer distribution industry.)

While he continued to cover large craft breweries in Beer Business Daily, the new publication went much deeper and expanded coverage to thousands of smaller craft breweries, so readers had to buy a second subscription if they were passionate about the topic. So his customer-base is overlapping — but the content is not.

(If you’d like the entire Case Study, including details on how the company turned free email opt-ins into paying subscribers, here’s the link.)

That’s one of the big lessons from this week’s exclusive Subscription Site Insider Case Study on BuildingGreen.com, which offers a suite of subscription products for architects and designers in the sustainable building industry. (You can read the BuildingGreen.com Case Study, and any other in our Case Study Library, by signing up for a 10-day Free Trial before Friday, March 25)

BuildingGreen President Nadav Malin told us that site licenses account for 30% of the company’s subscription revenues, with 40% of the top-10 architecture firms in the United States paying up to $15,000 annually for firm-wide access to the company’s websites.

Most of those site licenses were sold thanks to long-standing relationships with individuals within those firms who rose to positions of prominence as the sustainable-building trend has taken off.

It’s a great example of a classic site-license marketing strategy: Look for an internal “champion” at your prospect companies who can make the case about the value of your products to his or her bosses.

In response to the growing movement toward energy-efficient and sustainable building practices, many architecture firms have added an executive-level position, such as a “Director of Sustainability,” to develop their firm’s expertise in that discipline. These individuals had the most experience in the area — and were also likely to be longtime subscribers to BuildingGreen’s flagship newsletter, Environmental Building News.

Malin says that conversations with those individuals, either through specific outreach to them or by the individual proactively calling BuildingGreen to ask about firm-wide access, led to most of their site-license deals. So if you want to expand your own site-license sales, look for your own “champions” within organizations.

Start by making a list of high-value target accounts for site licenses and check your existing subscriber database for individuals at those companies who are current subscribers.

Also study your industry to see if there’s a particular title or job description that’s likely to make decisions on subscription resources to help the company do its job better. Depending on your product, this could be a director of research, an HR executive, or a high-level marketing or operations specialist.

Then, develop an outreach approach to promote site-license options first to these individuals. You can start with email or telemarketing outreach just to let individual subscribers know what options are available to expand access throughout their companies.

If there’s real interest, you can offer resources that help them make the case internally — such as educational whitepapers, video demos, even a PowerPoint deck that the champion can customize for their own internal presentation about the benefits and value of your site-license option.

Finding an internal champion can make your site-license selling process a lot easier — but in turn you need to make it as easy as possible for that champion to make the case on your behalf.

(Non-members can read the BVR Case Study, or any others in our Case Study Library, by signing up for a Free Trial).

One of the secrets of BVR’s growth strategy: Licensing other people’s content. 

Foster explained that licensed content now accounts for 35% of annual revenues. Although he was initially wary of content licensing, he’s come to see the practice as a low-cost, low-risk way to diversify your product mix and grow an online publishing company.

BVR looks for content providers who can complement their mix of proprietary online databases, ebooks, webinars and other resources related to the business valuation process. For example, they partner with FactSet and BizMiner to resell subscriptions to those companies’ online databases directly from the BVR site.

But they also use their online publishing expertise to find partners who need help bringing new content to market. For example, BVR works with academics to publish new textbooks on business valuation topics.

They then sell those books in their online store, but also pull out chapters that can be combined with other BVR content to create entirely new products — maximizing the revenue from all content to which they hold the rights.

To create good licensing partnerships, Foster recommends being generous with your terms. BVR typically gives the content creator 50% of the subscription fee or product sale price. And both companies receive buyers’ names and contact information for future marketing outreach.

So take a closer look around your own industry – and related niches – for potential content licensing partners. You might find a similar avenue to low-cost, low-risk growth. (Remember, you can check out this week’s Case Study on Business Valuation Resources by signing up for our 10-Day Free Trial.)