A post by Scott Aughtmon, “5 Content Domination Lessons From A Furniture Maker Turned Publisher”, builds on the history of BusinessWeek to help content marketers improve their effectiveness. The BusinessWeek story also offers a sobering lesson for traditional publishers: reader satisfaction matters more than any business model.
Writing for the Content Marketing Institute, Aughtmon explains how BusinessWeek began as an in-house publication for a furniture maker, A.W. Shaw, who saw an opportunity to sell the magazine to people outside the company.
After proving the concept, Shaw sold the rights to McGraw-Hill, which owned BusinessWeek until 2009. The success story inspired Aughtmon to remind content marketers of what made the magazine work:
- It included top-quality content. Shaw’s content benchmark: make it so good that people will pay for it.
- Even though he was a furniture maker, Shaw thought like a publisher. Specifically, he understood his target audience and its immediate and longer-term needs, creating content that helped them address those needs.
- Shaw focused on niches. He didn’t try to serve everyone; he picked the markets where he was able to deliver a superior solution.
- There is value in developing your own style, a unique voice that stands out.
- Audiences expect a clear point of view.
McGraw-Hill bought the furniture maker’s publication in 1929, and Aughtmon is on solid ground when he talks about its success over the next seven decades.
In the early 2000s, though, BusinessWeek faltered. Ad revenues declined, as did revenues from circulation. When it was bought by Bloomberg in 2009, the publication was thought to be losing as much as $30 million a year, and it had suffered through several years of staff cuts and under-investment.
BusinessWeek blamed its precipitous decline on a weak ad market, particularly in the years following the Great Recession. The ad market did worsen for most magazines, with revenues falling by a third or more in a three-year span.
But that’s not what led McGraw-Hill to sell BusinessWeek. The decline in ad revenue was merely a proximate cause, the most immediate and visible change. It’s a common refrain among publishers: “We were making money before ad revenues declined, and now we are not. The problem must be ad revenue.”
The real problem? BusinessWeek had come to rely on ad revenue to remain profitable. In the last years of McGraw-Hill ‘s ownership the average price paid for circulation fell well below the cost of producing and delivering the magazine to its readers.
The magazine that was once “so good that people would pay for it” had stopped delivering on its promise. The erosion was slow and largely invisible. People valued the magazine less, and they paid less for it.
Some stopped subscribing altogether. Dependent on advertising, BusinessWeek needed to maintain its guaranteed rate base. That meant it had to offer even lower prices to prospective subscribers. As ad revenues continued to fall, the deficits grew.
Rebuilding reader confidence takes time. More than four years after Bloomberg acquired BusinessWeek, readers were paying about $39.76 a year – $0.74 an issue. By comparison, an average subscription to the Economist, a magazine that focuses on readers first, sold for $106.42 – $2.09 an issue.
The differences add up: the Economist claims 757,000 paid subscribers, so the extra $1.35 a copy represents more than $52 million a year. Consider that the premium earned for delivering on a promise.
Scott Aughtmon uses the history of BusinessWeek to offer content marketers five lessons on how to improve their effectiveness. The BusinessWeek story also reminds traditional publishers of an important lesson of their own: reader satisfaction matters more than any business model.