We have just finished up a season of conferences, summits, and trade shows in the industries we serve – publishing and membership associations. One of the things that sticks out the most for me at these meetings are the stories of how organizations are increasing their revenue. There appears to be no end to the tactics people have employed to multiply revenue by creatively looking for opportunities for repackaging their content, extending their brands, and thinking outside the box about new value propositions. One publisher we know sells design furniture on a website which extends the brand of their design magazine. Now that’s creative thinking. I don’t know many publishers who sell furniture.
Publishers, especially those in the B2B space, have been experts at diversifying their revenue for decades. From selling lists of their subscribers to advertisers, to targeting their editions to certain demographics, to selling back issues of their magazines, or articles, and selling advertising, these publishers have many sources of revenue which helps steer their businesses through the ups and downs which come to us all.
For many publishers, the driver for seeking out new revenue streams has been the decline in print and the relatively slow growth of digital, at least in some sectors. I ran across a statistic the other day which I found remarkable: “publishers who had 80% or more of their revenue from print sold their companies for .5x revenue on average. Companies ‘with more diverse revenue,’ with print accounting for no more than 70%, sold for 1.2x – 1.5x revenue, according to John McGovern, senior associate at W.B Grimes & Co.” (see original article here). This article went on to list 29 revenue streams which a B2B publisher could tap. Not every publisher can tap all 29, but surely there are some potential gems for your business in the list.
The surprising thing to me are the organizations who tell us they are not diversifying. I realize that it is hard work to start up new revenue streams. Some of the efforts will fail, and many people are afraid of failure. But if you can multiple your company value by increasing the sources of revenue, why wouldn’t you give it a go?