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Advertising-based publications are in turmoil, newsletters said to be in much better position.

News and trade journal publishers--the largest segment of the overall $141 billion information content industry--suffered a 5.4 percent drop in revenue in 2001, according to a briefing from the research and advisory firm Outsell (

The biggest losers in the segment were newspaper publishers, trade journal publishers, newswires, and news services. More dependent on advertising revenue than publishers of other types of b-to-b content--such as newsletters--these publishers face challenges in finding new business models and in adapting content to the internet, the study argues.

"News and trade information vendors are reeling after the dot corn crash," said Outsell director and lead analyst Janet Cleary.

And Al Goodloe's Publisher's Multinational Direct reported last month that "magazine circulation departments are in turmoil as the advertising drought continues.

"The prolonged downturn in advertising revenues is leading to deep cuts in circulation department budgets and staff downsizing in a number of publishing companies. This disturbing trend is underscored by the loss of their jobs by five professionals who spoke at the March PMD Conference.

"These professionals were highly experienced in direct marketing. When cuts like these are made in senior circulation staff, one can only surmise that the publishers involved are pessimistic about the outlook for any early recovery of the advertising market."

Goodloe continues: "One of the problems for publishers is the over-reliance on advertising revenues. PMD notes that the newsletter side of publishing is surviving the recession much better than the magazine side. (None of the speakers at the PMD Conference who have lost their jobs were from the newsletter industry.)"

Goodloe said, "Newsletter publishers rely on subscription income as the key to survival. But there is much more. Newsletter publishers start more newsletters and cross-sell them to exis-ting subscribers at good profit margins. Then the publishers add all sorts of ancillaries: books, special reports, conferences, yearbooks, diaries, directories, and more. And finally, newsletters enjoy high renewal rates, because they are more targeted. We think magazine publishers could improve renewal rates with more focused efforts."

PMD, 1501 Third Ave., New York, NY 10028, 212-861-4188, fax 212-628-5070,
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Copyright 2002, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Publication:The Newsletter on Newsletters
Date:Oct 31, 2002
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