We’ve been writing a lot lately about the increasingly blurry lines between platform and publisher, a world in which new-media entities like Twitter and Facebook and Medium — and even brands like Red Bull or Coca-Cola — are competing with traditional outlets for the attention of readers. Now LinkedIn, which was already a significant competitor for many existing publications with its “Influencers” program, is opening up its platform.
As my colleague Lauren Hockenson notes in her post, LinkedIn is now allowing any user to publish posts or articles on the site, and also to follow writers even if the author isn’t already in their network. Previously, writers appeared on the platform by invitation only, typically celebrities like Richard Branson.
There are a host of issues involved with becoming a hybrid of platform and publisher, as Jonathan Glick of Sulia discussed in a recent post about what he called “platishers,” and as I commented in my own post on the topic. But the latest announcement from LinkedIn highlights one thing that makes the company a significant competitor — namely, the fact that it already has an existing business that is more than paying the bills and can subsidize its publishing arm.
A competitor who doesn’t rely on advertising
In other words, LinkedIn doesn’t have to rely solely on advertising revenue that is derived from driving traffic to its publishing business, the way many traditional newspaper and magazine publishers do. It has annual revenues of about $1.5 billion, and virtually none of that has anything to do with its publishing operations. Compare that to a company like Forbes, which — despite its aggressive moves into digital publishing, and becoming a kind of open-blogging platform for brands — is still a fairly traditional publishing business, in the sense that it depends primarily on advertising revenue.
Forbes, which is reportedly being shopped around with a price tag of about $400 million, has revenues of around $135 million, according to offering documents that media consultant Ken Doctor wrote about recently. More than 70 percent of that comes from ads, and despite the magazine’s Brand Voice program and other initiatives, its online revenue has not been growing very rapidly, and certainly not enough to offset the decline in print advertising.
In fact, LinkedIn — a business that barely existed 10 years ago — could buy Forbes for cash if it wanted to, since it has more than $2 billion on its books. Whether it would want to or not is a different question, although it does seem to fit with the publishing strategy behind Influencers and LinkedIn Today.
Existing publishers closing at the worst time
In the past, many publishers had unrelated businesses that helped to pay the bills when the media game couldn’t: the Washington Post, for example, used to be able to count on revenue from Kaplan Inc., a chain of for-profit colleges also owned by the Graham family. Then Kaplan also started to decline, and the Grahams eventually had to sell to Amazon CEO Jeff Bezos.
Now, many newspapers and magazines are relying on paywalls of one kind or another to supplement their declining revenue base — but they are doing so just as competitors like LinkedIn and Medium and even brand-driven publishing entities are opening up, which is a very risky strategy.
Are there going to be quality issues and other struggles for new publishing platforms like LinkedIn, as there have been for Medium and the Huffington Post? Of course there are. But particularly for LinkedIn, the benefit of having a completely separate business that is generating significant amounts of revenue will give the company a lot more firepower than most of its competitors. Just another thing to keep traditional media awake at night.