How JJ Hornblass built Royal Media, the most successful B2B media company you've never heard of
He started out with a print finance newsletter in the 1990s.
When JJ Hornblass got his first journalism job in the 1990s, his dad made a deal with him: he could spend a few years as a reporter, but he had to eventually make his way over to the revenue side of the media business. It only took JJ a few years to follow through on that deal.
While working as an editor at American Banker, he pitched his bosses on launching a print newsletter covering the mortgage securities market. When those bosses took too long to make a decision, he left his job to launch the newsletter on his own. Flash forward 30 years, and that newsletter has grown into Royal Media, a B2B media company that covers four niche industries.
In a recent interview, JJ explained where he found his initial subscribers for that first newsletter, how he expanded into new verticals, and why he’s so focused now on building and selling access to data platforms.
You can check out our interview over here.
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Transcript
Hey JJ, thanks for joining us.
0:57
Thank you for having me, Simon. It's great to be here. Long-time fan, if I could say that. Am I allowed to?
1:03
You're allowed to. You can praise me all you want during this interview. So you founded this company called Royal Media all the way back in 1995, and it's now this really successful B2B media business that operates several publications. What was your experience in journalism before that? You actually came up through B2B Media, right?
1:26
for sure for sure so um i mean i started in journalism when i was 18 years old uh i had the great fortune of sitting next to sam friedman who is a professor at columbia journalism school and at the time he was a reporter at the new york times
1:47
and so uh he came over to our house for dinner one night i was 18 didn't really have much direction and he kind of took me under his wing. He was like a friend of your dad's or something. He was a friend of my dad's. Yeah. He, he actually, um, his, he was getting married.
2:08
He was engaged to be married and his, uh, future stepmother was like a colleague of my father. My father, who should rest in peace, uh, was a long time judge. in New York state and then a federal judge. And she was a lawyer. And so they were friends professionally as well as personally. He was getting married.
2:32
So he was the fiance that got invited to dinner at our house. And I sat next to him and he started telling me what he was doing. And I got quite taken by him. And I really I to this day, he is still my mentor and I'm still in touch with him.
2:53
And he started me on that journey. So I was I was 18 when I started in journalism. I started he was at The New York Times and he I started writing for actually stringing for The New York Times. I would while you're in college. I hadn't even started college yet.
3:13
Yes, while I was in college, I started stringing for the New York. They used to have a section in the New York Times where they would have short articles from college campuses. I don't know if you know this. So they would have these articles. So I would write from my college campus and then
3:33
pretty soon after i i became a stringer a copy boy and a stringer for the new york times i would go in and work it on the on the news desk uh and i'd work the 7 15 to 2 45 in the morning shift That was my shift at the Times.
3:52
And I did this through college until I basically almost killed myself because I was going to college in the morning in the daytime and working at the Times at night. And at a certain point, I couldn't do it anymore.
4:08
And this was like the shift in case something happened overnight, like a crime or like what was it? Yeah.
4:14
Yeah. You ran through the three editions of the paper. I have no idea how the Times works today, but back then there were three editions of the paper. And so you ran through all three. I think the last edition, if I'm not mistaken, came out at 2.15 in the morning.
4:33
And so there needed to be a copy boy. who would be, you know, run and do whatever errands the news desk wanted, needed. And I would, and I did that. I would work. And so that was my first exposure. It was amazing. Amazing. And then I went to Columbia journalism school and I went,
4:59
I moved to Asia and worked as a reporter there. But before I went to journalism school, I promised my father that I would move to the business side of journalism. He thought being a journalist was going to lead to a life of poverty and was not really enthralled with the idea of me being a journalist.
5:21
So when you say business side, not covering business, but like actually like working on the circulation or advertising side.
5:26
Yes, that was my promise to him. I promised him on the steps of Columbia. And, um, and so that's my background in that's, that's my background. Uh, so I worked at, when I came back from Asia, I worked for American banker and then I started growing.
5:42
So what were you doing? So American banker is like, obviously for wall street, it's like an old institution. What were you doing for them?
5:50
So I was on the mortgage desk. Um, so American banker is really the banker for commercial banking in America. Um, And still is. It's still a great brand. I'm still very fond of it. And so it divided American Banker Did based on facets of the commercial bank. So retail banking, community banking, business banking, small business banking,
6:25
mortgage finance was a big part. So I worked on the mortgage desk. which eventually led me to covering kind of all of consumer credit.
6:34
So you went back on your father's wishes and you went actually back to the reporting side?
6:39
Well, I didn't violate his wishes yet, Simon. I was allowed to be a reporter for a period of time. And I did that until 1995.
6:50
Wait, so the deal was that you had to eventually go over to the business desk? He let me go to Asia.
7:01
He let me work for a few years, but then I made good. There was no deadline. He was a wonderful man. There was no deadline, but I had a promise that I had to upkeep. But I was still working as a reporter, and that's what I did.
7:20
Yeah, so you went to your bosses at American Banker and pitched them on some kind of new publication or something like that, right?
7:29
Okay, so I'll tell you the story. And by the way, I'm happy to share this as we're approaching our 30th anniversary. It's nice to sort of get this on record. So at the time on Wall Street, the asset backed securitization market was just developing. This is kind of arcane, Simon, but this is how it was.
7:56
So the asset backed securitization market was just developing and it was each asset class in consumer credit was being turned into securities and sold to like mortgage securities and stuff like that. Exactly. Exactly. So mortgage had been some years before. This is the famous book Liars Poker by Michael Lewis, which I highly recommend.
8:22
That was actually just as a side point. At the time, that was the only required reading that you had in order to be a reporter at American Banker. You were required to read Liar's Poker, which I did. But anyway, so mortgage finance, mortgages had already been turned into securities,
8:42
but other asset classes started to be turned into securities. Auto loans, credit card loans, student loans, et cetera. And this growth This infusion of capital created tremendous growth in these markets. Tremendous. And so I went to the folks at American Banker and I said, you know, these markets are booming and we should make newsletters.
9:16
Back then, you would make newsletters, Simon. You'd make newsletters. Print newsletters. Oh, yeah. The only type. kidding. So they would you would make, you know, I pitched them on making newsletters. The best one of the best B2B companies at the time. It's the brand is still around was Institutional Investor. Institutional Investor
9:44
some of your listeners will recall, had a tremendous portfolio of newsletters. This was like the money engine of institutional investor. So the notion of a large business brand having a stable of newsletters was relatively common. So I went to them and I said, you know, we should do this. This is gonna be good.
10:10
And they said, no, it's a great idea. Great, great. We love it. It's a great idea. We'll let you know if we want to do it in a year. And I was like, in a year? The whole thing is done. There is no way this is going to last a year.
10:29
So because you thought the market would crash or what? Why? Why didn't you think it would last a year?
10:34
The opportunity wasn't there. You would you would know it wasn't going to crash at all. It was like these markets were growing so greatly that somebody was going to build a newsletter for them. They were just.
10:45
They were just... You wanted to be a first mover advantage. So they say, wait a year. You're like, no, that's too long. So you decided to go off and launch your own newsletter focused on these securities.
11:00
Correct.
11:01
That was the strategy. And my father was very pleased.
11:04
Yeah. And so what was the name of this newsletter? this was called home equity news home equity news focused on the at the time that was the largest segment within uh consumer credit outside of mortgage connects outside so home equity loans which included subprime mortgages yeah so what did
11:26
this look like like it was like a was it like a sheet of paper was it several sheets of paper was it stapled together what did this actually was it a pamphlet like what did it look like
11:37
um it well at the beginning it was uh sheets it was uh it was a bifold you know it was uh what was it they did it 11 by 16 and you would fold it um and it was it was i think we ran eight pages every issue um we used to print it over in chelsea uh
12:00
down in manhattan Uh, and, uh, it was mailed and that's, you know, I started this by myself in a room.
12:13
Yeah. So you were you were you were doing the reporting. So you're doing the writing. Was it hard to get sources to talk to you? You know, given that you're nobody knew. I mean, they knew who you were probably because you had like a you know, you had your sources at American Banker.
12:27
But like, what was it like if you were calling up someone new?
12:30
No, no, no, no. This is I mean, I was like. there weren't a lot of people covering these markets at the time, Simon, you know, they were. And so I had a, Mike, I had a teammate on American banker. His name is, I mean, he's still, he works for, he's worked at Reuters for many, many years.
12:51
Now his name is Jim Saft and we were teammates and we killed it. We were like, we were very competitive and, um, We wanted to publish the most stories out of any team. So we were like, we would hustle and we worked super hard. And so I had plenty of sources. I remember this, you'll be interested.
13:20
So I sent out a marketing piece at the time. And I said, I think the list might've had 100 and, maybe 200 names on it. Where did you get the list? I think I had like collected, you know, these are like people who I knew.
13:36
It's just like, I'm starting a newsletter, would you please subscribe that I please? I think I had a 50% response rate. This is that I've never, you know, I'll never get that. I'll never get close to that again. And so, you know, that was it. And then from there, we were kind of off to...
13:56
So you were doing the reporting, you were printing up and folding the newsletter. You were sending out direct mail. I'm guessing back then you had to send invoices to get people to pay for stuff. And you had to like badger them to renew and stuff like that. Like that was all done by hand.
14:12
How much were you charging?
14:13
I think the initial price was $495, if I'm not mistaken.
14:18
So how long did it take you before that was like producing a full-time living?
14:25
I'm just happy that my wife is not on this call because it took a while. It was hard. It was hard work. Like years? So I remember, if I'm not mistaken, I think I was two years in and I still hadn't taken a dime. And my wife said to me,
14:50
I think we already had a kid and my wife was like, this cannot continue. You have to start. And those are, you know, those are moments in entrepreneurism that you, at the time you think that this is terrible, but they're actually, formative moments that really create your company because they force you to operate like a normative enterprise.
15:23
It's non-normative to not take a salary. So I think it was two, three years. And then I started to, you know, I took, started to take a salary and that was, that's kind of when it started to come together, I guess, is the way I would say it.
15:44
And it was just because you started to take a salary because it finally hit a growth rate to where you were covering your expenses and you could finally afford to pay yourself?
15:52
Yeah. I think also when you start a business, maybe you had this experience, Simon. When you start a business, you're overly concerned about reinvesting in the business. Oh, if I take out $10 out of my business, that's $10 that I can't reinvest and fuel growth or get me to the point where I need to get to.
16:26
And so that becomes an irrational thing. it's not rational, you have to face the reality of your P&L. And this is, it's an important lesson. I was young, I was 25. And it was really hard to know what the right thing to do was. But I think that's really what what ends up happening,
16:56
because once you have a real P&L, you understand what you need to do in order to create a profitable enterprise. Otherwise, it's not real. Does that make sense?
17:10
Yeah, totally. I mean, I'm right there with you. It took me 25 years longer than you to experience. So when did you start diversifying into new publications?
17:24
Pretty soon. Pretty soon after. We started auto finance. So the goal was, remember, the strategy, which... blown out of the water not that long after. But the strategy at the time was to create newsletters that paralleled each asset class in the asset-backed securitization market. So we were starting with the biggest one, the home equity asset class.
17:51
And then we went to auto finance. That was the second biggest. And then we were going to keep on going with that. We sort of got sidetracked. A little bit, but we started in auto finance in year two, 1996.
18:10
So the reason you weren't able to take up salary is because you were spending money on reporters to hire for these different publications.
18:16
Best marketing. Yeah. I mean, I was trying to build it. And, you know, we didn't have – could have been a mistake. You know, we didn't have investors, so we didn't have like a pool of capital. We were bootstrapping everything. So and 1996 was employee number one who still works at the company. Her name is Marcy Bellis.
18:41
And it kind of went from there. But you can't you can't function that way. You have to You gotta, you gotta live. You gotta, you gotta take a salary. Otherwise it's not a business, you know?
18:58
So you started entering the two thousands, the, you know, obviously like starting the web 2.0 age, how did your company eventually start having an online version? Like I'm, I'm guessing it wasn't like, you know, flipping a switch and suddenly it went from print to online. So I'm guessing you introduced the website and then maybe slowly started putting
19:19
your content online in some way. What was that transition like? I mean, this is a whole podcast in and of itself. You shouldn't have waited 30 years to do this interview. You could have unloaded some of this.
19:33
Simon, my apologies deeply. I mean, what am I going to say? Okay. The one thing I want to express to both of you and to your esteemed listeners is that – In this business, it is a business of constant iteration, constant. So as soon as there was an online dynamic, which basically, you know, we started in 95,
20:03
90, was it 98? I believe Yahoo was introduced. As soon as there became an online dynamic, we were already experimenting with it. It was terrible. We were, it was not usable, but we were very early on trying to figure out how to utilize an online dynamic. So the notion of constant iteration was there from the get go.
20:32
It's not the online dynamic that was the first sort of monumental shift for us or major shift for us, I'd say. I'd say there were two other ones. The first was taking advertising, which was at that time was crazy. If you were putting in a $500 newsletter ads, people thought we were nuts.
20:56
And then the second was in 2001, we launched our first industry conference. Those two things were much more impactful or important to the company at that time than the online dynamic. The online dynamic was kind of later than that even. Even though we had an online presence, but it really wasn't, the major shift happened later when
21:28
we ended up ditching print publications entirely and going whole, you know, just really going whole hog into digital media.
21:42
Yeah. So you started selling advertising in the print product. These were like financial firms or something like that that were trying to to talk to talk to investor like potential investors or something.
21:55
Well, you know, it was like so our our our our communities still to this day are really the senior executives in the industry. So there are a lot of service providers. that provide services to those industries so you know back then there were like there was like credit insurance providers and rating agencies and even then already
22:19
there were software companies that were advertising so then they were advertising to the loan providers the lending companies um the fine you know so it wasn't really like an investor uh lender dynamic was more what, you know, what suited the, it was advertising for the lenders.
22:39
And then 2001, famously great year for finance and wall street. Um, what, what was the conference that you, uh, that you launched that year?
22:48
Um, yeah, so we, we launched, uh, the auto finance summit. Um, it was two weeks, two weeks. Two weeks after 9-11? No, within four weeks of 9-11. And that was that was insane. Was it in New York? No, that was that would have been even worse. It was in Arizona. That was again,
23:23
some of your your listeners will recall at that time, you know, to get through security at the airport was like at least three hours in those weeks after 9-11. People were afraid to fly. People were afraid to fly. I mean, I was from New York. I was completely traumatized by 9-11 at the time.
23:47
We had our office on 25th Street and our telecom, our internet ran through Tower 2. So we went completely dark. And it was only because of the great kindness of one of my good friend's father. He let us hang out and work from the training room in his office. So we were displaced for months after that.
24:24
So getting even to Arizona was crazy. But that was the first event. And how did it go? We had no idea what we were doing. None. We came down the first day and we didn't realize that you were supposed to put name tags into the plastic badge sleeves.
24:44
And so the attendees were like, oh, we'll help you do that because we need to have name badges. How did it go? It was very hard, but we held it for a good reason. We held it because there was no industry event that was actually truly expressing true market dynamics.
25:09
There were these trade shows that people would sort of just like talk around issues. And we really tried to create something meaningful. And that event is still being held today. It still takes place every fall.
25:23
So, but it started recurring from then forward, like you had it again in 2022? Yeah. 2002. 2002. So was it like a three-day conference? Like it was a full-on conference, not just like a summit or anything like that? And I guess just putting the cart before the horse, but how many conferences do you run now?
25:51
We hold eight annual conferences. Three of them are international conferences. um in in the auto finance sector we hold two annually still the one we we held in 2021 2001 excuse me and and we also now have one in the spring in may so you're
26:16
you're like a full like it's not just a side thing for you you're like you're basically putting on conferences like planning them around the year basically we
26:24
are you know i think that that's the thing that that is you know, I would reflect on in all these years is that, you know, there's a basic question of like, what exactly is a business media company today? I mean, what we look like today is nothing like we looked like in 1995.
26:48
We are as much an event company as we are a news company. We're as much a data company as we are an event company. And so the notion of change and evolution is like, Yeah, we put on good events too. They're good.
27:11
We'll talk through some of the data stuff in a bit. So when did that transfer happen from print to online and what was that like?
27:22
So that was really precipitate. I think the big, a real precipitator of that was the credit crisis in the late, 2000 aughts, I guess, where we were forced into a circumstance where we had to cut our expenses, be more efficient. I mean, that was a traumatic experience for us. We were in...
27:52
financial services at the time, you know, solely. We weren't in any other sector. And so we got smoked. We got smoked by the credit crisis. So it was like that was where we launched our first digital only brand at the time for the first time right then. And that really created a process whereby we We re-eliminated print.
28:18
It was very difficult and it remains difficult. It remains a difficult business, the digital media side of things, to figure out how you should position your paywall, to figure out, you know, to understand what your pricing should be, how to present your content, all these things we had to work out in kind of real time.
28:47
I would say that the real decisor though, that has made digital media a viable and frankly enjoyable part of the media landscape is really the ARB, the automated renewal. that dynamic that you now have. This is like a godsend for all those old timers out there who used to send out print renewal notices.
29:20
The notion that you can just auto renew somebody on a subscription is like, I can't express how how significant this is, but once the times really mastered or really got on top of the paywall dynamic, whatever year that, you would know what year that is better than I, whenever that happened, that really freed at least for us,
29:52
this is my experience, that really changed how we looked at subscriptions and really allowed us to say, you know, the value of that subscription is real, that digital subscription. We're going to charge for it. We're going to charge you for it every year. And people really start.
30:14
And that's been an evolutionary process since then and until now where i think most most business consumers expect uh to pay for subscriptions they expect not to get every single aspect of of content for free as it was in those years like
30:34
you know after you know as as the internet kind of boomed where things were all you
30:40
know was just free yeah i think younger people listening probably don't completely understand what the internet was like prior to the new york times launching its paywall um because there was this theory that nobody would pay for digital news and once the new york times launched the like and there were lots of people predicting it was
31:00
going to fail but like once it proved that people would pay for the new york times and i think it gave a lot of publishers permission to you know, oh, this won't be a complete disaster. Like it's not an easy business, but it can be done. 110%.
31:15
I really, I think that that's true. And I think the part that is important to recognize is that they deployed the paywall while still generating positive ad revenue. They were able to do that. And it was also the growth rate of their subscriptions was also significant.
31:42
So like you saw like adoption being pretty high and it was almost like the tighter the paywall, the greater the revenue, you know, the better they did. And to be to be. know to give credit where credit is due they still have an exceptional um paid digital media business i mean they're they're really it's really exceptional but
32:08
you you see it in other brands time and you know it's not it there are other brands that do great uh the ft wall street journal the atlantic new yorker yeah oh these they're they're you know but they but With all due respect, I would suggest that a lot of that roots out of the times.
32:32
I mean, I think that that's, you know, they really, they built it. They built technology at the time. There wasn't really like a really great paywall. And that was one of the problems. It didn't really work well.
32:48
You had to build it yourself for the most part. When you launched the website, or I mean, you already had a website at that point, but like the digital pay product, was it still like a package newsletter or were you like atomizing everything into individual articles with paywalls onto it?
33:07
If I remember correctly, at the beginning, you could get both. You had the option. And we would, you know, you would kind of push people to the digital product because that would cut your, you know, your capital expenditures, you know, your cost of goods sold. So you would push them to the digital subscription.
33:36
So I think we played with it. At some point it was an add-on, it was not. I mean, the permutations that we went through through the years are that and any number of other dynamics. You really didn't know what to do. And it wasn't until, I wish I knew the exact years and I'm sorry,
34:03
I don't have them for you, but it wasn't until like you really, really tightened around the ARB dynamic, that automated renewal dynamic that you were, it allowed you to say, sorry, you're not going to get the print publication anymore. You're renewing digitally and that's what you're going to get.
34:24
And you know, there were a lot of people who were not happy and they're still probably not happy. And there are still aspects of it that I have some, I don't know, not regrets, but I mean, there's value to print publications that I appreciate.
34:47
It's just when you're in markets like ours, you can't afford to print them anymore. And that's just the reality.
34:55
So So it was kind of like an act of desperation. The market was falling out. How long did it take once you launched a digital paywall to where you were like, okay, this is working?
35:10
Oh, if I remember correctly, it was probably three or four years to that point. And I do want to point out to you, we're in 2025 now. it's still an iterative process still uh we have a brand that does not have a
35:29
paywall on it um you know like that's not good uh we want to have a paywall on the brand and we're constantly thinking about how how to kind of bridge that gap right how to get over that
35:48
I mean, that's what being a media...
35:50
I mean, I'll tell you, I'm not as far in the journey as you are, but I'm like five years in and I'm just like, I'm still testing out new things. I'm still not... You're never satisfied. Maybe someone at the New York Times and the New Yorker and the Atlantic is satisfied, but I'm not satisfied.
36:06
that i've figured i still don't feel like i've figured key things out you're constantly just experimenting and iterating and being like okay this sort of works and then let's keep on going down this path and then suddenly that's that the roi on that is not working anymore and so i'm going to pivot slightly and go this way
36:23
like it really is just kind of like stumbling around in the dark i don't know if that's something unique to media businesses or that's every business but it's certainly i i know what you're talking about
36:33
Well, the first thing I would say is, is that I don't really know any other business at this point, so I have no idea. But but I will I will you know, I started this this conversation by complimenting you and I would compliment you again because this that is exactly the attitude or the approach that that people
36:53
need in media, which is you stumble around in the dark and you constantly are in a state of exploration. This is what makes the industry amazing. What makes the industry amazing. How much innovation or iteration do they do? I don't know, at gas stations or something like that. They're delivering the same gas. In our business,
37:19
in this business, you must be in a constant state, constant, constant state of iteration, exploration, failure, failure, is is something that you have to get used to i have failed so many times over the years so many times i can't even tell you um and that's it that's how it is it's
37:45
just like a part of you know like a salesperson needs to get used to rejection i would argue that you're never going to sell to 100% of your prospects. So you need to be comfortable being rejected. In media, we have to be comfortable being uncomfortable all the time. And that's just how it is.
38:08
There's no alternative to it, in my opinion. And like what I've seen over the last three years, whatever, since the pandemic, holy cow. It's unbelievable, you know, like what has gone on. You take the event business. The event business has gone completely upside down. The registration cycles that you see now, it's unbelievable.
38:43
You're getting 50% of your registrations within two weeks of the event. That was crazy. That's crazy. Back then. It's stressful. It's stressful, right? It's stressful. And, you know, these kinds of things are, they're more significant than we realize. Like, then, you know, Simon, you have to realize that these changes to somebody outside, they'd be like, holy,
39:13
the sales cycle has completely turned upside down. That's a big difference. deal but you know what are you going to do this is our business we got to take we got to take the lumps and we have to just deal with the circumstances so this
39:27
notion of you know like just fumbling around in the dark this is i could tell you i'm sorry to tell you this after 30 years
39:41
I am still fumbling around in the dark. So what's the starter pack for launching a new publication? How do you identify an industry that is worth investing in? Because it sounds like you're still bootstrapped or it's not like you're taking on millions of dollars of VC regardless.
40:00
What's kind of the way of identifying an industry and what's the bare minimum that you need to get that publication off the ground?
40:09
So... you have you the circumstances that you have today are such that to create a new media brand is remarkably different difficult excuse me remarkably I don't I think it's there it is not easy to find vertical segments to explore and um The reality is, and this is sort of,
40:47
probably not what you wanna hear is that I'm very pessimistic about that. I don't think that it's easy to find new avenues to explore. What we've done more in the last several years is really more like more fully mine the segments that we're in, the sectors that we're in.
41:09
I mean, you take a segment like the air cargo industry, We bought that business in 2010. So that's a long time ago now. But that business was that brand has been around since 1978. And it is very difficult to build a new brand today. I don't know that I have a real easy methodology for it.
41:40
It's really gonna have to be a confluence of factors that will allow you to explore a segment. So it could be, because the notion that you're gonna find a segment that is de novo, de novo, that nobody is focused on, know this is very difficult to expect uh really difficult but you don't have like a
42:07
rule that like each new publication has a minimum of two editors or two reporters or whatever and that's like kind of what you need in order to get the volume of reporting or like what's the what's the kind of startup like structure so if you
42:21
were to start you're saying if you're going to so so if you're going to start So I would say today, if you were requiring me to do this, I would say today it's two things, okay? You have to be able to produce content that is truly unique and prescient.
42:40
So that certainly two reporters is a minimum to that. I mean, we have a great editing team, so it's really not two reporters, but two reporters on the ground is certainly a minimum. But I would also argue to you that you must be able to produce some sort of unique data for that segment.
43:01
You are not going to be able to make an impact in a marketplace if you don't also produce some unique data. So the media brand today or a venture today must include, in my opinion, this is how I look at it. My opinion must include a data component. The reason for this is is because the
43:28
the notion that news in and of itself is valuable enough is I think a questionable one. I don't know that you can produce news in and of itself that has enough value to merit a subscription price, a paywall. It's just, it's so ubiquitous information today. And I'm sorry if this is not what your readers, your listeners,
43:56
excuse me, wanna hear, but it's so ubiquitous today that you have to find a a a portfolio of unique information that is that separates you and provides value
44:11
so did you build data products that are like manipulative like things that you can manipulate like a bloomberg terminal or is it more that the reporters are just collecting data and making charts and including them in their reports or something
44:24
like that no no no so we're i mean we have we've really We've really made a significant transition over the last, call it a year or so, to build true, meaningful data products. These are indices, forecasts, aggregation of huge amounts of data in a marketplace. We're trying to build data that has, I would say,
44:59
the mark of a data set that has real value is when it gets included into a financial model. If you have data that is going into a model or is going into some sort of algorithm or analysis, on the part of of your audience and folks in your audience. That's that's serious.
45:17
That's that's what we're and that's what we're aiming for. So when we create like we have something called the auto finance composite index, you could look at this index and it basically is a real, you know, relatively real time measure of activity in the auto finance sector at any time. it's a significant thing to build.
45:38
I mean, we spent a long time on this. And so it's not just about adding data into articles. It's also about creating unique data sets that can be used, analyzed, used, and can be manipulated on the part of your users, of your audience, to tell their own stories. Because increasingly, people want
46:06
Don't tell me what you think, right? They don't want that from journalists. Don't tell me what you think. Give me the tools to make my own conclusions. That's sort of our goal and that's how I look at it.
46:21
And are you licensing data or do you have like, are you doing like by hand data entry? Where's this data coming from?
46:27
Yeah, so we're not really licensing the data right now. What we're really doing now is selling subscriptions to it. which I guess is sort of similar. I look at licensing data as like a different type of agreement because you have a usage dynamic to it where you're kind of creating pricing that is contingent on how
46:51
it's used or significant. So we're not really doing that. I think that that's a different, you know, I would hope we get there, but that's a more substantial, significant relationship Right now, we charge subscriptions at various price points for the data and allow for its usage. We don't really police the usage,
47:20
but we don't necessarily say we're not gauging the pricing based on the usage.
47:27
No, but where's the data coming from that's being pulled into your product?
47:32
I mean, it depends. It really depends. Some of it we are aggregating from the web. Some of it we're taking publicly available data and creating indices and or derivatives off that data forecast and so on. So like, like, for example, so the Federal Reserve publishes data on credit availability,
47:59
meaning like how there's a there's like how much how much loans are available in the in in the country at any given time or the volume of credit available. So we've built a forecast on top of that, that takes into account other data data sets that determines like where that availability will be. Right. So
48:23
We definitely are using publicly available data, but almost everything that we're producing right now is either we've collected whether it's by the teams collecting it, by algorithm, or we're manipulating it in some way based on our own formulas.
48:47
And then are you charging your journalists with doing reporting that's based on stuff they're pulling from that data product? How do you train... an audience to use a data product because like it's all well and good to say you have access to this data product but they don't make a habit out if they don't know
49:05
how to use it if they aren't seen if they aren't being showed ways of like how to use it like a lot of people use google trends today and i actually was doing consulting for google i was working for a marketing agency and like our entire job is just to find narratives in google trends
49:21
write them up in blog posts on the Google Trends blogs and then pitch them to journalists. And then those trends would go viral. And then it basically kind of like slowly trained the product of different ways they could think about using Google Trends. Like how do you train your audience to use your data products?
49:38
I would say that that is the most important question in the data industry today, or at least the media tinged data industry today, because it's very difficult. It's very difficult to do. So the first thing that we would that I would say is, is certainly you need to have your team, your editors using the data.
50:04
You have got to utilize the data because if if you're not setting an example and creating copy around that data, like why should anyone else? So you have to get your team. And so we do that. We do that. And we're happy to do it because all the data. I mean,
50:26
I wouldn't say we write about every data set that we produce because there's a lot of data. But the data that we're writing about is ours and unique. So we're happy to do it. In some cases, we do own a consultancy in one of our sectors.
50:46
So we've utilized that team to evangelize the data, but that's a very unique circumstance. And we've talked a lot about this internally, like we kind of need to be able to communicate to our communities, like how are you supposed to use this data? It's not easy and it's not intuitive.
51:11
I would say the other journey that we're on is really trying to talk to our communities and say, ask them, What do you think of this data? How are you using data? How can we change it so that it is more valuable to you?
51:29
I don't know that there's another magic way to do this than other than like kind of what I would call like hand to hand combat, because the problem with data is, is that it's like a there's no wow to it. So you release a data set and you're you're essentially releasing like a whole like
51:51
it's it's a long it's a long data set. Right. You know, you're not you can't just you're not releasing just, you know, February 19. You're releasing a data set that goes back to 2010. So when somebody looks at it, they're like, it's like a it's got a lot of history to it. It's just this.
52:08
So I'm not like wowed by it, as it were. And so you have to kind of like inculcate this data into the mechanism of the industry to get them to use it. And it's not easy. I mean, we've had a data set, like one of the data sets that we've been producing since 1999.
52:32
And we're actually talking about this today. And I was talking about this with somebody internally today. And I mean, we were like, you know, it's always amazing why people use this data set, because we produce it and we think, oh, you're going to use it for analysis. You know what they use it for? Sales. They use it.
52:54
They look at the ranking and they say, oh, this is the number one company in America. And I'm going to sell them my software. This is number two. Does that mean that the data is less valuable than we think? No, I wouldn't say that. I wouldn't say it's less valuable.
53:12
It's just that after all these years, it does actually have a use case, at least. And that's important because it takes a very long time to get people to change how they work. We started we were saying how In our space, we're constantly in a state of evolution and change. Not so in other industries.
53:35
They, you know, especially when you're dealing, let's say, for example, in financial services, In financial services, if they have a risk management practice that they undergo to change that is a big deal. They don't because they're not just changing it for themselves. They're also changing it with their regulators. Now, there's been a whole, you know,
53:54
since the new administration came in, there's a whole kerfuffle around financial regulators and who knows where that'll go. that'll play out. But the bottom line is, is there still going to be a regulatory regime. And if you're still a financial institution, you still have to abide by some regulatory regime.
54:10
And so if you want to change what you do, that's a big deal. That's a big deal. So data has to be you want your data to be a part of that change. And it takes time. It's hard. And we're working on it. What can I tell you? We're working on it all the time.
54:31
What synergies can you drive between your publications? What is centralized in your company? What services are centralized?
54:37
Copy. The editorial management is centralized. So we have a team of editors that... you know, look at all copy. That's a centralized dynamic. Marketing is centralized. Event production is centralized. I mean, basically everything is centralized other than the content dynamic. Even our data team now is really working on all the brands. They're not. And so that's hard.
55:08
They're kind of dealing with all these, you know, very divergent brands. And because we're so deep into these segments they become very specific even though you know on the surface you might think that let's say like the auto finance sector and the equipment finance sector are kind of like relative they seem like they're how different can
55:28
they be well at our level they're like crazy different they're like they might as well be on completely different planets because you know we're very very tuned in to have the the nuances but we still have a centralized data data operation. So a lot of it is centralized.
55:49
Are you mostly selling subscriptions at the enterprise level or are individual or is a big part just individual?
55:56
Mostly individual. I think enterprise subscriptions is something that we haven't like completely figured out. We certainly have enterprise subscriptions. It's hard to figure out how to sell that. because when you're dealing with a large corporation and a large number of people, you probably need a salesperson to do that. But the economics of that are very difficult.
56:23
So you end up being in a catch 22 on enterprise. That's at least our experience. Maybe other your other listeners have had better experiences with it. So, you know, I would I I don't have this number off the top of my head, but my guess is enterprise is maybe 20% of our, uh, our total subscription revenue. Um,
56:46
and otherwise it's really individual, which, uh, you know, that's, we're really built that way. And we really focus that way.
56:55
How many sectors are you in now? Four. And how many publications are you running total? four oh so it's just four okay i thought there were some sub publications in those okay so you closed down some publications right we did we did we did we closed down
57:11
two publications um one and they're worth discussing and i'm happy to discuss it so uh one of our sectors is the air cargo sector which uh we're very fond of um There were two brands that we acquired. These were post credit crisis acquisitions when we wanted to diversify out of financial services.
57:35
So we have there were two main brands that we had. One was called Cargo Facts. The other was called Air Cargo World. These are really they were great brands. One. Air Cargo World is one of the first trade was one of the first trade brands in America.
57:54
It was launched in 1941 and really had a very rich tradition. Cargo Facts, exceptional content. And so each dealt with a different side of the market. Cargo Facts dealt with the aircraft. Air Cargo World dealt with the business of aircraft. They had different audiences to some degree.
58:22
First of all, those audiences have kind of like gotten closer and closer together. It used to be very, very disparate. Those audiences have come close together, but running two brands is work and it's hard. And so we combined those into cargo facts. We merged air cargo
58:43
world into cargo facts so that's that's one dynamic to try to simplify our operation the other the other brand that we we we unfortunately closed is called connectivity business news and it focused on telecom satellites um and that turned that was a learning experience we acquired that business a few years ago and it just didn't really have
59:10
a large enough audience coupled with the fact that Elon Musk's Starlink has basically taken over that entire segment. So there were there were things happening in that marketplace that didn't allow us to continue. But overall, I think the lesson for us is that simplicity has its benefits. And when you start,
59:39
like for you or other folks who are starting in the space, you think, I need to have a lot of brands. I need to be big. I need to have a lot. How can I reach more people? I want to have more audience and so on. And I don't know, I've learned that
59:58
more is not always necessarily better. And it's probably better for your team, for your operation, from an operational standpoint, for your team's sanity to just have kind of like a simplistic, more simplistic portfolio and be able to put all their effort into like one brand
1:00:18
as opposed to their effort into two different brands that are pulling them in kind of slightly different directions.
1:00:25
How big is your staff now?
1:00:27
So we're about 35 people.
1:00:29
Okay. And like what's the – is it like half editorial or what's the kind of breakdown?
1:00:35
So it's a little less than half editorial. So it's probably around – slightly less than half is editorial. The rest is business.
1:00:47
And so when you look going forward, like you're investing in these data products, you're becoming more and more of an events company. How do you hope to be different or bigger or expanded three years from now versus now? Would you want just each of your publications to just have more subscribers and more revenue?
1:01:06
Or do you eventually want to expand again into new verticals? How are you thinking about, you know, where you want to
1:01:13
Yeah, so I don't see us expanding into new verticals without an acquisition. I think it's just way too difficult to build a brand today. Any new vertical that we go into would be through acquisition. I look, I look, I'm constantly looking, I'm constantly talking and seeing what's out there.
1:01:36
So we're in a constant state of exploration for acquisitions. In terms of growth, I think that the two markets, the two aspects of the business where we can gain the most growth is through data. The price point on our data products is by a multiple higher than our news subscription.
1:02:02
Oh, you're selling two different subscriptions. It's not one big bundle.
1:02:06
That's right. That's right. That's right. And so we're we're not in every case, not in every case, Simon. But in most cases, we are doing that. So that price point is much higher because the utility is is frankly higher. So so that price point is higher. So I think we want to push on that.
1:02:26
And then I do think, though, you know, the event space is very crowded. on some levels, but there's still opportunities there. It's a big world out there and people really still need to come together and talk about business. So we're really pushing on those two levers. I think from a kind of a new subscription standpoint,
1:02:53
that's in an organic state of kind of steady growth. whether it be through price or as well as through audience. And we're moving that along. We're having a really good year on the subscription side, but it's not, you can't get like a, boom in it, in my opinion.
1:03:16
It's in a data product where the price point is so high you can't, but it's going to be slow and steady on new subscription products in my estimation for the foreseeable future. What's kind of the range of prices you're charging for your data products? So the highest price is close to $6,000 a year.
1:03:36
And the lowest price on a data product is in the $2,000 a year framework. Um, our subscription prices are, you know, still around the same as when around the same general vicinity as when I, when we started back all those years ago, you know, 500, 550, something along those lines up down,
1:04:05
even some of them are even less expensive to the, you know, the $400 range on an annual basis.
1:04:13
and like obviously bloomberg is the most successful information company of all time and has built like such a great moat with the bloomberg terminal do you feel like you're building moats with these data these data products like it's kind of like like such a level of differentiation that it's like it just kind of gets stronger
1:04:31
over time damn well hope so yeah i i think it's only been like a year since you've been launching these right
1:04:40
Yeah, I think that back in the day, if I can bring us back all the way back in the day, the moat that you had was that the market was so specific and so idiosyncratic and so unique that your coverage was far and away more important than anybody else. So, you know, like back then,
1:05:07
We crushed Bloomberg in our segments because, I mean, Bloomberg is amazing. I'm a huge fan, huge. I mean, they're amazing. They weren't covering auto finance like we were covering auto finance because it was a very contained market, as an example. That advantage, I think, is gone. I don't think you can recreate that.
1:05:34
you can now recreate a dynamic whereby your algorithms and your your the data that you're producing does have uniqueness so can you go to bloomberg and get an auto finance composite index no as far as i'm aware i certainly hope not i i don't think
1:05:56
that you can do that and so but but that and so that that formulation of a forecast of global freighter capacity, which we have, or an index, excuse me, of global freighter capacity. This is unique to us. And that becomes a differentiator that I don't think that Bloomberg can overcome. I mean, they're doing great
1:06:24
I'm not worried about Bloomberg. For us, we can still create the same sort of general uniqueness of content through data today that back in the day we used to have through reporting. And I do want to say we're still doing awesome content and we work really hard. to produce really insightful and meaningful content.
1:06:56
So I don't want you to think that we're giving up on it. But as we've said, you can't just sit around in media. You can't just assume that what you did yesterday is suitable for tomorrow. And so we're constantly looking for something that will give us that moat of defense against um, gen AI, uh, the social networks,
1:07:27
the, the major media companies, we have to continue to like seek out ways to protect ourselves and, and create growth. And that's, that's kind of like, that's the ultimate goal. And we're, we, we still are, sometimes it works, sometimes it doesn't. So what can I tell you?
1:07:45
Okay, JJ, those are all the questions I had for you. Where can people find you online?
1:07:50
They could go to royalmedia.com. And from there, you can find all our brands. And I'm pretty active on LinkedIn. I love to connect with people on LinkedIn. So they could certainly check me out there. All right. Well, this is a lot of fun. Thanks for joining me. Simon, it was a pleasure. I really appreciate it.
1:08:06
I'm very grateful to you. Thank you.