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Bloomberg's Radical Plan for BusinessWeek: Better Editorial New Ownership Looks to Improve Circulation Revenue by Charging More
by Nat Ives Published: October 13, 2009
NEW YORK (AdAge.com) -- Bloomberg is looking at new opportunities to sell ad packages combining BusinessWeek and Bloomberg.com inventory, but the deal announced this evening does not, thankfully, seem to be a "synergy" play first and foremost. Don't look for Bloomberg and BusinessWeek to try to sell deals integrating splashy ads, for example, on Bloomberg terminals.
Instead the new owners have a plan that's basic enough to seem radical these days: It will invest in the editorial product at BusinessWeek, which will probably be renamed Bloomberg BusinessWeek, in the expectation that readers, and advertisers in turn, will follow.
"Ultimately the way we think you get to profitability is by having an improved product, which our resources enable us to help provide, that fundamentally both online and in print is more attractive to readers, viewers and advertisers," said Daniel L. Doctoroff, president of Bloomberg.
"It begins with putting out a great magazine," said Norman Pearlstine, the chief content officer at Bloomberg, who is also becoming chairman of BusinessWeek. "There's a lot of talent at BusinessWeek that can do that. But they have certainly been resource-constrained over the past few years because of the business model they've had." To energize and improve BusinessWeek's editorial product, then, the new owners plan to increase the number of editorial pages in every issue, tapping Bloomberg's 2,200 existing journalists.
"We think that given the global reach and assets available to us at Bloomberg, combined with BusinessWeek, we can just put out a great magazine," Mr. Pearlstine said in an interview this evening. "If we do that, we will be rewarded with consumer demand and advertising will follow."
It's not just advertising, though, in Bloomberg's cross-hairs. It's also eyeing better circulation economics, a priority that too many magazine publishers have thrown overboard in the desperate hunt for ad dollars. "Right now the subscription price is $35 annually," Mr. Doctoroff said. "The Economist is $106. We've got to improve the product and make BusinessWeek a must-have."
That's not to say Bloomberg will ignore the chance to sell ads across its newly combined products facing consumers. "The other opportunity exists online, where between the two sites, Bloomberg.com and BusinessWeek.com, we'll have roughly 8 million unique [visitors], which are more than any other non-portal business and financial site," Mr. Doctoroff said. "Interestingly they have virtually no overlap in terms of advertisers and relatively little overlap in terms of viewers. That is a big opportunity."
The Bloomberg team also said they can save money by moving BusinessWeek into nine floors that currently stand vacant in Bloomberg headquarters. And the corporate overhead charges under Bloomberg will be less than they were under the seller, McGraw-Hill, they said.
There's no timetable to re-enter the black, but BusinessWeek -- make that Bloomberg BusinessWeek, in all likelihood -- will stick around, contrary to rumors during the sale process.
"It's not an overnight project," Mr. Pearlstine said. "We think there is actually a niche for a weekly magazine dedicated to business with global reach. If you get that right, you'll get the kind of circulation you want and the kind of returns you're looking for."
Jim Spanfeller, the longtime Forbes digital chief who recently began his own media consultancy, said the acquisition won't change the game for advertisers, at least right away. "I don't think there's an immediate impact at all for advertisers," he said. "But down the road there could be."