Tuesday, August 6, 2013

Blockbuster week for newspapers: what it means for trade associations



What a week for the media business? 

First came the announcement that the owner of the Boston Red Sox had purchased the Boston Globe from the New York Times (NYT).

Then, came the announcement that Amazon founder Jeff Bezos had purchased the Washington Post for $250 million.

The value of media companies is drastically lower than five years ago. The New York Times purchased Boston Globe for $1.1 Billion 20 years ago. They got only $71 million for selling it this week. (FYI, that means the smart folks at NYT cost shareholders $50.6 million per year in lost market value!)

These are on top of Warren Buffet’s purchases of newspapers around the country.

“A lot of people had written off the (newspaper) industry but we’re seeing more transactions occurring, “ Ariel funds exec told USA Today. “People view them as newspaper companies but they are content providers and we know content is valuable.”

What is going on in the media business. 

And, more importantly what does it tell associations?


Here are four things I see:

  1. As emerging content providers, major publishers (such as the Washington Post) could become competitors to association content. This is especially true for industries or professions large enough to offer an opportunity to provide content at a profit. Owners such as Bezos are likely to expand content opportunities through these established content creators/distributors.(NOTE: associations – through conferences, webinars, newsletters, websites, etc. – are in the content business. Watch what is happening in this arena.)
  2. Industries continue to change ... impacts trade associations representing those industries. Mergers usually don’t result in continued memberships of both companies.
  3. Companies will be looking at how to reduce dues payments in their trade associations. Several years ago I managed a niche trade association of media companies, many of whom were also members of a larger mainline association of magazines. When the economy soured, the big guys pushed to merge their niche trade association into the larger association. Why? It saved them $20,000 to $25,000 a year in member dues.
  4. Finally, the continued changes in mainstream media suggests we are still evolving our communications vehicles. As, association members habits continue changing, need to monitor habits and be prepared to adjust their communications strategies and tools to meet the needs of those members.
Thought this quote from Bezos is appropriate:

  • "The Internet is transforming almost every element of the news business: shortening news cycles, eroding long-reliable revenue sources and enabling new kinds of competition, some of which bear little or no news gathering costs."  

Gosh, that aptly describes the association and nonprofit environment too.

So, what do you think?

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