News broke this week that the Times Publishing Company is putting my former employer, Congressional Quarterly, up for sale. This immediately prompted a small Twitter storm from current and former CQ staff about the need to protect and preserve … faithfully … the company’s mission.
It also prompted a small Twitter storm among online news gadflies about the future of the non-profit business model for news.
For me, the news was a reminder that the genius of CQ is that it has been able to turn a low-value commodity and resell it as a high-value service. To grow the business, its next owner will need to understand that and look for ways to evolve CQ from a service to an experience.
CQ has always fascinated me, even before I worked there. Somehow it had been able to make a business model out of selling commodity information. It took content that was mostly publicly available — much of it even posted publicly online — and found a way to charge subscribers thousands of dollars for this.
The secret to their success, I think, can be found in the book The Experience Economy, in which B. Joseph Pine II and James H. Gilmore outline how companies make money by moving up the evolutionary chain from extracting commodities from the land, to turning those commodities in to goods, to selling services around those goods and — in the future — selling experiences that transform the customer. I picked up that book while wondering why Starbucks had been able to sell a commodity for $3 a cup while news organizations had reduced the value of commodity information to consumption to near zero.
Clearly CQ has long found a way to turn commodity in to a good. All news organizations do this. CQ extracts information and re-aggregates it in various publications. Cool. Send me a copy.
But when that commodity information become cheaper to extract, largely because of advances in transparent government enabled by the Internet, CQ smartly found a way to add value by selling itself as a service. Subscribers to CQ don’t pay for the good — mostly in the form of access to various databases on CQ.com these days — they pay for the service in the form of a whole sales support staff that is dedicated to helping them find the information they need at the moment they need it. Can’t find what you’re looking for in the vast trove of data on CQ.com? Call them up, send your sales rep an email. It will be found for you, sent to you via a link in a personalized email to your Blackberry. Sometimes, you might even get your sales rep to call someone on the editorial staff with a request to change the play of various stories on the homepage of the site. (I’m sad to report that this really did happen. Rarely, but often enough that it made my Spidey Senses tingle.)
To me, this is the ultimate lesson that news organizations can learn from CQ. How can they collect commodity information and move it farther up the value chain to sell it as a service of just-in-time knowledge? Someone should fund and do a case study of CQ with recommendations for local news organizations.
I continue to ponder how news can be made in to an experience and whether this is something CQ could do. The down side of buying CQ is that I suspect it’s saturated its market. There isn’t a single lobbyist, government agency or legislative office that doesn’t have a subscription. There are more than three dozen databases that can be sold to extract more income from those clients. The question for CQ for about the last 10 years, how do we expand our market beyond the Beltway.
CQ hired me to help them find the answer to that. Mike Mills and others architected a “front porch” strategy that would begin to distribute some CQ content to a general audience as a way to tease more folks in to the deeper content. In 2006, I helped launch CQPolitics.com as a way to sell advertising around a heightened interest in electoral politics. But I guess the idea that you could start a new Web site dedicated to politics and expect to gain a national audience was crazy.
So how do you make such a wonkish site in to an “experience”? Can you? Should you?
Amy Gahran at Poynter had one idea: “I’d love to see CQ do more with online communities and social media.”
In many ways, I see CQ and Everyblock facing similar challenges in their growth. I think both can be overcome if they get the right suitor. If you’ll allow me some idle speculation…
- Best Suitor
- Worst Suitor
- Best Realistic Suitor