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End of the line for CCH and ICAEW publishing deal

9th Nov 2011
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AccountingWEB founder and “Prudent Surfer” Ben Heald this week published a blog examining the major shifts taking place in accountancy publishing. This is an extract of his thoughts.

The latest developments in the accountancy publishing industry are rather intriguing.

Ten years ago in 2002 the ICAEW sold its publishing wing ABG Professional Information and monthy members magazine ‘Accountancy’ to CCH, the UK software and services subsidiary of Wolters Kluwer.

At the time Wolters Kluwer estimated the deal to be worth €64m over 10 years, but the numbers don’t actually matter; in return, the ICAEW paid CCH to publish ‘Accountancy’. During the first half of the contract it was sent to the members who subscribed, but since 2006 it has been sent free to all 130,000 ICAEW members.

When the contract came up for renewal this year CCH lost out to Progressive Customer Publishing.  But CCH still owns ‘Accountancy’ outright. This month’s (November) issue reveals what will happen to the institute’s former house magazine from February 2012:

  1. Instead of being free to all ICAEW members, Accountancy will be £79.20 per annum (£99 to non-members)
  2. The previously free website alongside the magazine will now only be available for an annual subscription of £239, with some extra CCH training products thrown in as an incentive
  3. The website address has switched from www.accountancymagazine.com to www.accountancylive.com.

Here are some other key details:

  • In February, the ICAEW will launch a new official institute magazine that will be sent free to all members
  • AccountingWEB - now in its 15th year - has an acknowledged lead online and is the only accountancy site with a genuine community.  We’ll keep on doing what we’ve been doing
  • Even though Incisive Media withdrew its weekly print title ‘Accountancy Age’ this summer, the Age is still very much in the game in its online incarnation, www.accountancyage.com.

Using Alexa’s UK traffic rankings for the sites in question, AccountingWEB is rated at 2,373, compared to ICAEW (5,457), Accountancy Age (6,413), AccountancyLive (190,348) and Accountancy Magazine (198,595). NB: a lower rating is better than a higher one.

CCH remains a long-term player in the accountancy market, but it is hard to see how a £79.20 magazine is going to beat a free magazine, particularly when the latter is the official institute title. It’s unrealistic to expect a site with little traffic and no community to outcompete the free web competitors with a £239 annual price tag attached; especially given their significantly higher levels of traffic and engagement.

Sensible people at CCH/Wolters Kluwer must be able to see that. My guess is that CCH has adopted this strategy to encourage the ICAEW to buy back the Accountancy brand. As an ICAEW member, I’d urge the institute to call CCH’s bluff and press on with its new members’ mag.

I speculate that fewer than 10,000 of the 150,000 or so current subscribers will pay for the new title - an unsustainable number. And they’ll do well to get 1,000 sign-ups for AccountancyLive.

Full disclosure: Kelvin Ladbroke, the outgoing boss of ABG, offered me a job in 1999. After four large white wines on an empty stomach one afternoon in the Olympia Hilton I was sick in the toilets and haven’t seen him since!

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By David R Johnston
09th Nov 2011 11:46

Even fuller disclosure

This deal was the straw on the camels back that made me resign my non-executive role in WKUK (having been a 'lifer' there in Croner and CCH since the '80s).  In one deal the then CFO Peter Diggles and Kelvin managed to negate 7 years of my painstaking (and productive) M&A work (FDS, Proacc, Kestrian, IRPC, ESS, PPC, Reward, LPMS, Empire...) for the group. The ICAEW deal never made sense, and frankly buried the fortunes of the WK UK team for a decade - I had nothing to do with it - probably because the CFO knew I would have laughed it out of court. They then had no option post deal but to squeeze cost saving after cost saving out of the group to make sense of figures which were, frankly never going to make sense even 2 years after Dotcom.

Neither CCH nor Kluwer brands frankly needed the profile of a magazine then or now. We may never know the real reasons behind the deal, but frankly that is now ancient history. In reality, accountants are uniquely cynical about brand reinforcement anyway and buy on much tighter metrics than that - so having the ICAEW's brands didn't help CCH and losing it won't hurt. For me the deal just never made sense in the first place. 

In stark contrast to Thomson Reuters (Digita and Abacus, now) and Lexis (Butterworths, Simons etc), Wolters Kluwer has been in the doldrums for a decade and shows little sign of coming out of it. A succession of good (and some not so good) people were landed with an impossible management task - largely driven by this deal.

If all the legacy products are finally gone, it should at last be time for WKUK's incumbent team to put this albatross to bed and finally get on with what the CCH team are good at.  WK should never have been meddling with advertising revenues - and having now even let Mercia run their face to face training it seems they are focused hard on the core assets. They need to get their ducks in a row to see if they can land Aderant at a decent price when it comes back on the market, for example - meddling with Incisive and others should not be high on their list.

I've always been a fan of Sift's efforts and this really shouldn't help or hinder you too much. But this may not be altogether good news for some others - this debacle meant some had a 10 year holiday with CCH embroiled in difficulties it didn't need - it may now start to get back in the saddle properly. And then again...

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Replying to Knight Rider:
By bheald
21st Nov 2011 09:03

Institute relationships

Fascinating David - and it reminded me of another incredible deal we signed at the time.  In August 2000 Sift agreed a relationship with the ACCA that guaranteed them £100k a year for the opportunity to monetise a 'CareerZone' on the ACCA site.

We did generate some revenues, but needless to say, this was very much a deal of the times, with no risk to the ACCA.  Fortunately only a single year deal though!

 

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By David R Johnston
21st Nov 2011 09:42

God is not on the side of the Big battalions

Thanks Ben

It gave me no pleasure to see Croner and CCH brands so abused back then, but as I said there are good people trying to get on with it now. Kelvin's deal wasn't even in the Dotcom boom - but during the recession after it - unbelievable.

You'll be glad to know that since 2002 Sift group has grown more than the whole of WKUK. We're nearing the completion of a detailed analysis of the legal (and tax) information services market(s) and it is good to see you doing so well.  The accountancy information market has always been small compared to the voracious lawyers one, but sadly it is also getting smaller in proportional terms. Lawyers still want to pay more for information while for accountants it is getting commoditised out of the picture.

In a  £1.2bn UK market Sift improving relative market share compared to the likes of CCH is impressive. Keep it up. Like Voltaire said - God is on the side of the best shots...

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