Growth even in adversity
Jinfo Blog

24th September 2008

By Tim Buckley Owen

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Events have moved fast since Outsell signed off on its latest Information Industry Market Size, Share & Forecast Report. Predicting a 4.5% compound annual growth rate (CAGR) for the industry to 2011, Outsell believes http://digbig.com/4xnjr that the market will hold steady in 2009 and beyond, despite the challenging economy. But has it had to rethink its conclusions in the light of the latest upheavals? ‘Partly, but not completely,’ says the report’s co-author Kate Worlock. Lengthy subscription agreements may shield financial information providers from the worst of the crisis for some time to come – but subs that are based on headcount will inevitably suffer if many jobs are lost. ‘Also, during an economic downturn there’s an increased demand for good quality, trustworthy financial and credit information.’ Kate continues.  ‘Credit companies in particular tend to do quite well in these periods.’ That’s assuming, of course that people still believe them. We’ve mused previously on the credit ratings agencies’ woes http://www.vivavip.com/go/e8839 and now it seems customers are punishing them for their earlier failings. Credit & financial information services rate only an 8.5% annual growth forecast from Outsell, compared with 15.6% for search, aggregation & syndication. ‘Players like the ratings organisations make up a large part of the segment, and these are really having problems,’ Kate reports, with both Fitch’s and Moody’s revenues down 10%, and Standard & Poor’s down a whopping 25% in the first half of 2008 compared with the same period in 2007. Perhaps not surprisingly, the other sickly patient is news services. If news were taken out of the equation, Outsell’s projected CAGR for the industry in total would be 8.4% instead of 4.5%. ‘Newspapers haven’t worked out a way to replace their print revenues quickly enough,’ Kate comments.  ‘They’ve been overtaken by online players and are struggling there at the same time as their print revenues are falling off a cliff.’ Some newspapers are moving into other areas, she continues – Guardian Professional for example – but that doesn’t seem to be where most of them are going as yet. Nevertheless, a recent report by US advertising consultant Borrell Associates, What’s a Web Site Worth? Valuation Metrics for Local Web Sites http://digbig.com/4xnjt (free summary available) suggests that some local sites – including those spun off from newspapers – may be worth $300-$450 million. And a forthcoming executive forum organised by news publishing specialist IFRA http://digbig.com/4xnjw promises a raft of business models, strategies and tactics for remaining relevant to the customer of the future. How do intermediaries do the same? Acknowledging that it’s not her area, Kate Worlock does offer one piece of advice for infopros facing the almost inevitable cutbacks: ‘Positioning yourself as the model of the next generation information professional might help.’

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