The Australian media business continues to shrink. News Limited announced yesterday it will buy Australian Independent Business Media and its two major publications Business Spectator and Eureka Report in a $30 million deal.
For shareholders, including Alan Kohler, investors John Wylie and Mark Carnegie, veteran journalists Stephen Bartholomeusz and Robert Gottliebsen, along with media veteran Eric Beecher (chairman of Private Media), the sale represents a nice windfall for just a few years of work.
But although this buy is concentrated in the media sector, there are plenty of lessons other SMEs and entrepreneurs can take away.
Here are five quick lessons to take on board from the AIBM purchase:
1. Create a name for yourself
Traditionally, the personality of a media organisation has been contained in the name. Certain mastheads attract more attention than others. But online it’s a different game altogether – you have to personalise everything.
Alan Kohler has been able to create a name for himself through decades of business journalism, his work on the ABC and online as well. The Eureka Report is “Alan Kohler’s” Eureka Report, while on Business Spectator, Kohler teams up with Robert Gottliebsen and Steve Bartholomeusz for regular KGB interviews – complete with photoshopped pictures of the trio together.
It’s simple stuff, but it’s necessary when operating online. If all you provide is content, then you open yourself up to competition. But when you put your face and name on something, then you’re providing something no one else can touch – if you’re good enough.
This isn’t new, either. People have been putting their faces alongside business forever, and they’re still doing it – Ruslan Kogan may hate on Gerry Harvey, but they both share the skill of personalising their businesses.
Create a personality for your company, especially online. You may not have to plaster your face over everything, but add a few touches of your “personal brand” and you’ll be on the right track.
2. Watch the industry’s movements
It’s easier said than done, but reading the signs of where any industry is heading is critical. There are plenty of entrepreneurs who are too focused on what’s happening in their own business and they don’t take time out to see what’s happening elsewhere.
Eureka Report started seven years ago, and Business Spectator was built towards the end of 2007. That’s well before any of the other major media companies in Australia realised the importance of consistently updated, fresh content online.
Business Spectator not only saw that a consistently updated website was the future, but Eureka Report realised customers would be willing to pay for online content as long as it offered something valuable.
As we’ve seen this week, Fairfax and News Limited are paying the price for not reading the signs. Business Spectator is reaping the rewards of looking ahead.
3. Develop multiple revenue streams
Diversification of revenue is an important tool in any business. Too many times SmartCompany readers have told us horror stories of putting all the eggs in one basket.
Business Spectator and Eureka Report have been able to grow so well because of this dual-revenue structure. On the one hand, you have all the advertising revenue gained from Business Spectator, while Eureka Report brings in subscription funds.
And these subscription funds are the most interesting. The publication has proved that if you deliver good, valuable content online, then people will pay for it. Eureka Report tapped that well before several major media companies.
Look at ways you can diversify revenue in your own business. Can you create a new product and start charging for it, alongside your existing product range? Think about ways you can tap into dual-revenue streams and diversify your risk.
4. Don’t forget to reward your staff
Acquisitions are a troubling time for any business, and no more so for the staff. It’s confusing, and with so much uncertainty employees can be excused for fearing the worst for their jobs.
So pay them. Pay them well. Business Spectator is using $200,000 from the acquisition to pay bonuses to staff based on length of tenure.
Money can’t solve everything, but this is a good reminder why it’s important to reward staff for their hard work, especially during a buy-out. Give your staff what they deserve, and they’ll reward you with loyalty.
5. Offer some security to sweeten the deal
When attracting a buyer, you want to give some security. They’re buying an asset and don’t want it ruined the second cash changes hands.
Alan Kohler, along with Robert Gottliebsen, Steve Bartholomeusz, James Kirby, Nicholas Gray and James Leplaw, have all signed long-term contracts with News Limited.
When you’re in acquisition negotiations, give the buyer some confidence you’ll stick around. Commit to a contract, if need be. Giving that extra little bit of security goes a long way.