The Demise of the Industry Standard
Victim of Politics and Greed
Few of us can recite the key details of the Industry Standard's 2001 redesign. Even fewer of us remember the 56-page launch issue published 40 months ago. We will remember the Industry Standard newsweekly as a victim of politics and greed, and nothing less than the Bible of an economy to be forever changed by the Internet.
Like the real Bible, the Industry Standard was, for the better part of its life, a thick book that many referenced but few read. In March 2000 Salon.com presciently observed that "these same magazines that trumpet the ever-accelerating pace of business ask their time-starved audience to spend more and more time pondering it in their pages."
"We really don't want to be a telephone directory or Vogue every week," lamented Industry Standard publisher Steve Thompson in the Salon article. Sadly, Thompson got his wish.
Thompson was one of the Standard's few experienced business professionals. The Industry Standard newsweekly, web site and events business were crafted by CEO John Battelle and editor-in-chief Jonathan Weber, whose talent and charisma built a formidable brand and garnered many an editorial award. When the music stopped, that was not enough.
Irrespective of economic conditions, enduring print properties are built in one of two ways: either they have a large circulation defined by a broad editorial premise, or they have a small circulation defined by a narrow editorial premise.
Few would argue that The Wall Street Journal and Business Week are enduring print properties. They have high circulation and editorial missions broad enough to sustain both business and consumer advertising. Likewise, Advertising Age and Billboard have endured despite their low circ because their edit missions are tightly focused and have served their respective communities well.
The Industry Standard fit neither profile. It had a small circulation with a big, unwieldy editorial premise. That's OK when the sales reps don't have to sell because their phones are ringing off the hook. When the phones stop ringing, then it's not OK.
"The Industry Standard is the 'must read' weekly newsmagazine for senior business managers, financial and service professionals, and technology, media and entertainment executives who need to keep pace with the fast-changing Internet market," Industry Standard president and publisher John Battelle said in a pre-launch press release. "We're filling a hole between the trade magazines, which are quite technical and product-focused in nature, and the general business press."
Take a close look at the "reader" Battelle defines. It's actually six readers: a senior business manager, a financial professional, a service professional, a technology exec, a media exec and an entertainment industry exec. All this in a launch circulation of only 50,000. This circulation strategy was buckshot but narrow, visionary but low-budget. It was hardly a formula for success. It was a formula to capitalize on an historic opportunity. The Standard did that.
Unfortunately for the magazine's many adherents, primary founder Battelle and primary funder IDG didn't get along. Inside.com reported last week (subscription required) that Standard Media International, in which IDG was the primary investor, chose to establish its own financial and human resources departments. Its management craved to be distant from the staid culture of IDG.
SWMS research unearthed this link (scroll down once you click on it) from Computer News Daily, which quoted Industry Standard chairman Battelle (by then no longer CEO) from a 2001 panel in Berkeley, Calif.: "Battelle described how he persuaded International Data Group to fund his magazine — 'I told them what they wanted to hear so I could at least get the money' — and he told of his one regret: 'One word — control. If you're going to get where you want, it's important to have control.'"
Ironically, IDG didn't have control over the Industry Standard, either. It controlled 85 percent of Standard Media International; the other 15 percent belonged to Flatiron Partners, Chase Capital Partners, Morgan Stanley Dean Witter Private Equity, Pearson, J. & W. Seligman, EuropAtWeb and Chase H&Q. IDG was as frustrated as Battelle was.
With three-legged leadership such as this, Plan "A" for the Standard could be nothing but an IPO. Initially there was no Plan "B." Then, one year ago this week, the print mag called "Inside" came along.
According to the official line, "the magazine will be produced under the editorial direction of Inside, with The Standard acting in an advisory capacity. It will be printed and distributed by The Standard. Advertising and marketing will be under the purview of Inside, with ad pages sold by staff from both companies. The two companies are also exploring additional ways to share editorial and marketing expertise."
Just when the Standard should have begun shoring up its own sales efforts, it became distracted with Inside. Perhaps it won't surprise you that some of the Standard's institutional investors also were investors in Inside.com. When subscriptions to the Inside.com web site began to lag, the investors got the big idea to launch a print publication — and asked/told the Standard to help out.
The Industry Standard is gone because it never got around to identifying and serving a unique reader. The excellent journalists who worked there did their jobs. The money people failed them.
And now it is too late.
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