Who Is Buying WestlawNext?

As we all know WestlawNext was launched in February 2010. Every quarterly report by TRI since then has reported WLN sales and beginning with 3Q 2010 WLN sales as a percent of Westlaw revenue. See below (Note: customer numbers are sometimes characterized as "approximately" or "over".):

Quarter	Customers	WLN as % of Westlaw Revenue Base
2010 1Q	2,300	Not published
2010 2Q	5,700	Not published
2010 3Q	9,000	18%
2010 4Q	15,000	31%
2011 1Q	18,500	34%
2011 2Q	24,000	41%

In its Jan. 31, 2011 press release, WestlawNext, One Year Later, TR Legal reports that "over 15,000 law firms; corporate law departments; and law departments in federal, state and local government organizations have upgraded to WestlawNext." Andy Martens, senior vice president of New Product Development, Thomson Reuters, Legal, adds “We’re seeing more than 1,000 new law firms, as well as over 100 new corporate law departments, upgrade each month.”

Clearly the adoption rate Martens refers to is continuing but the use of the "upgrade" word implies that "new" refers to Classic Westlaw customers, not "new" as in customers who were not already Classic Westlaw subscribers to begin with. The revenue figures are certainly important. In this context they show that as of 2011 2Q, those Classic Westlaw customers who make up 59% of the Westlaw revenue base have not added WLN yet. How many customers? Don't know but if I was an investor in TRI stock, particularly an institutional investor, I would want to know. By now, I think we can assume that just about all Classic Westlaw customers have received the WLN pitch.

If I were an institutional holder of TRI stock. I would also want to know the number of new customers who have added or switched from Lexis to Classic Westlaw with the WLN premium priced upgrade addition. Who knows what the substitution rate is?  If the substitution ratio was greater than 1:1 you would think the marketing mavens would be making a point about this.

More generally, if I was an institutional holder of TRI stock, I would want to know how much revenue is being generated by the WLN premium as a standalone financial reporting datum. It is certainly a smaller fraction of the precentage of Westlaw's revenue base reported. Of course, then there are the Westlaw subscribers who were offered WLN free, not as a trial period, but as a no cost add-on to Classic Westlaw licenses during the duration of current or new licensing agreements as a means to expose users to WLN for the purpose of charging for WLN when licenses are up for renegotiation down the road.

What the heck, even we mere institutional buyers would be interested in knowing all this. All I can say is that at a well attended Philly 2011 session on WestlawNext -- I say well attended because it was scheduled during the last late afternoon slot of the last day of the annual meeting -- an audience head count indicated that something like close to half of the audience who have Classic Westlaw haven't yet added WLN. My sense was most of those law librarians worked in law firms. [JH]