This past week I attended Outsell's annual "Signature Event" program for those who lead media and information businesses focusing on business and professional markets.  There were about 120 people there, some from very large companies (Thomson Reuters, Bloomberg, Reed-Elsevier, Dow Jones) but most from small and mid-size businesses like ours.  Some were traditional publishers who derive a great deal of their revenue from selling advertising in one form or another, but most were subscription-oriented,  And there were a number who primarily sell software and workflow tools.

I took a lot of notes at the conference and will use my next several blog posts to share what I learned.  Under the rules, I'm not supposed to name names or give exact quotes, but hopefully the ideas themselves will have value.

The first two speakers were an economist and a management consultant, and their job was to define the environment we're going to be operating in over the next year or two.  Last year, a presentation from a similar duo just after Lehman Brother's collapse was incredibly depressing.  This year, somewhat more encouraging.

The good news is that the world economy is beginning to return to growth mode, albeit very slowly.  Projections show 1-3% growth in the US economy for the next few years.  Financial markets are also returning to normal, though there is much concern about the commercial real estate sector and the amount of debt there that needs to be refinanced.  Interest rates are likely to remain low into 2011, which will keep credit flowing to those who need it.  And the housing market, which led us into this recession, will also begin to come back slowly, with housing prices remaining down 30% on average from their peak (worse in some places, better in others).

One interesting note is the amount of cash on the balance sheets of US corporations.  With interest rates low, big corporations have been selling bonds and building up their cash reserves.  That could fuel a surge in M&A activity as those companies look to put their cash to work--and we know that M&A is a big driver of law firm profitability. 

As for the media sector, the recession has been devastating for many companies.  But projections show slow growth returning to the sector, with one forecast showing 2-3% revenue growth from 2010 to 2013.  Within that, print will remain challenged, with much of the growth coming in online advertising and digital information sales.  

At such a slow growth level, media businesses will not be able to count on an expanding marketplace to drive higher revenues.  We're in a market share game now.  Buyers--both of advertising and subscriptions--face tighter budgets and will negotiate harder for deals and discounts.  Hence, for us to add $100 to our revenues, we're going to have to take $100 in sales away from someone else.  Our sales and marketing skills will need to be sharper, and pricing decisions will become critical.

Yet some markets and customer segments are going to grow faster than others, and the consultant urged us to focus on finding and exploiting those pockets of growth.  So, for example, the Chinese economy is projected to grow 8.5% next year and for many years to come.  Similar fast growth rates are projected for India, Brazil and other developing nations.  Media companies and information providers which can sell into those markets will have a greater chance of achieving faster growth rates.  That probably goes for law firms which have opened offices in those developing countries as well.

Success in the slower growth US and European markets will largely depend on a company's ability to do a better job than its competition in meeting user needs.  Investing in truly understanding the customer base and different customer segments will become more important.  And the deployment of new technology will play a role as well--those who are most agile in developing new products and capabilities will have a big advantage over those who are slow out of the gate.  Sobering but true.

The good news is that we appear to be entering a more stable part of the economic cycle.  But competing in slow growth markets, where everyone fights over a flat or even shrinking budget, is not for the faint of heart.  Or, as our friends at Outsell kept reminding us during the conference, "No Guts, No Glory".