The 2009 unprecedented economic recession will leave a great scar in the information industry. At year end, Outsell is predicting that our industry will have shed 8.4% of its total revenue, dropping from $399 billion to $366 billion. In this market climate, many rules, metrics, and gauges for determining success have to be altered from our earlier perceptions.
Table 1 shows the total revenue and segment growth rate for each of the 11 information industry segments Outsell defines and tracks.
No segment has been immune to the effects of the recession. When comparing 2008 growth rates to the 2009 rates, the pullback is general and spread across all segments. Three segments have a double-digit decline in growth: B2B Trade Publishing; HR Information; and News Providers & Publishers.
An additional five segments have experienced single-digit declines: Company Information; Credit & Financial Information; Legal, Tax & Regulatory; Market & IT Research; and Yellow Pages & Directories. Only three segments managed positive growth: Education & Training, which is less sensitive to the recession given the influence of government money; Scientific, Technical & Medical Information; and Search, Aggregation & Syndication, with a growth rate that experienced an astonishing 15 point loss between 2008 and 2009, but still managed to grow some.
The Impact of Currency Conversion
Currency exchange rates have had various effects on revenue reported in US dollars:
While the euro was boosting revenue reported in US dollars in 2008, the trend was reversed in 2009, impacting results reported in US dollars by -5.2%.
- The British pound has most negatively affected revenue reported in US dollars. After negatively impacting revenue by -7.3% in 2008, the British pound lost an additional 15.6% of its value against the US dollar in 2009. Overall, the pound has lost 21.8% of its value over the last two years, thus dramatically affecting results when converted to US dollars.
- Contrarily to the British pound, the Japanese yen value boosted US dollar converted revenue by 14.1% in 2008 and an additional 10.3% in 2009, thus clearly embellishing revenue reported in US dollars.
These currency fluctuations are very extreme. Assuming no organic growth in 2008 and 2009, a British company that had reported revenue (in US dollars) of $100 million in 2007 would now only report $78 million in US dollars, whereas a Japanese company that also had $100 million of revenue in US dollars in 2007 would now report $126 million. The difference of $48 million would be entirely attributable to currency fluctuations rather than true performance.
Naturally, international companies also receive revenue from all parts of the world. In this case, British companies would receive an exchange rate boost from their US dollar revenue reported in British pounds, while a Japanese company would be penalized.
As an advisory firm, we provide industry sizing and forecasts that require us to choose a common currency. In this report and others, we have used the US dollar, however, we indicate both growth in US dollars and reporting currency to help our readers distinguish between true growth and currency exchange effects.
About Outsell Inc.
Outsell is the only research and advisory firm focused on advancing the publishing and information industries. Our international team provides independent, fact-based analysis and actionable advice about competitors, markets, operational benchmarks, and best practices, so our clients thrive and grow in today’s fast-changing digital and global environment.
This information was provided by Outsell, Inc., a Co-founder of BIIA www.outsellinc.com
Source: Outsell’s Report, “Information Industry Market Size and Share Rankings: Preliminary 2009 Results”
