For media, the sky may actually be falling

A new report from eMarketer says it in plain English.

The outlook for newspaper publishers is grim. Their business model is broken and advertisers are bailing.

The press release is titled “Numbers Show Newspapers Heading for Demise.” Demise, huh? Wow. The most chilling part of the report looks at online revenue, which was supposed to be the salvation of traditional media.

The future for print media companies is online, as evidenced by the growth in Web readership of sites such as The New York Times. Small and local businesses that once depended on newspapers to get their ads in front of customers now have other more measurable options such as paid search advertising.

Even that strategy is far from a sure thing. The newspaper industry, which is pinning its hopes for the future on following readers online, is in trouble. Online ad revenues are dropping as well. eMarketer estimates online newspaper ad revenues declined by 0.4% in 2008 to $3.15 billion.

eMarketer chart

eMarketer projects online newspaper ad revenues growth to drop in 2009 by 4.7% to $3.01 billion. The recession, the dismal state of the newspaper industry and the quarterly online ad spending trends for 2008 all factor into these projections.

As bad as the outlook is for newspapers, the reality is that all mass media are dealing with wave after wave of disruption, and newspapers are likely the canary in the coal mine. The next big thing coming — mark my words — is the realization among advertisers that they don’t need media properties at all online in order to do commerce in their community. This will be a startling revelation to some, but the handwriting is all over the friggin’ walls. Google is just the beginning.

It’s basic supply and demand stuff. It used to be that the most cost-effective way to reach the mass was through the scarce content of a media company, but that’s a horse that left the barn a long time ago. It’s just a matter of time before disruptive technology trickles down to local businesses, who find they can do rather well by advertising on the Local Web than on any particular site thereof.

Danger, Will Robinson!

Comments

  1. Suzanne Lainson says

    Yes, there is far too much online content chasing advertising to support them all. Each new wave of online content creators discover this, followed by a correction. After enough companies are eliminated and the economy starts to rebound, more websites are funded by investors and they keep going until their money runs out. The one online advertising model that has worked has been Google, and even that company is laying off people.

  2. On line revenue as the Savior is not going to work.
    I think you’ve got it almost just right . But you’re being blind to the value of Print.The problem is advertising, not newspapers. Any media that is based on advertising is going to be in for it. For newspapers that means Print is the revenue producer, online is the way to identify fans. Local ads will continue to work in Print. Once the media brands use the web to identify tribes and especially tribal leaders, they will innovate Print and other products to sell to them.
    More at my blog at:
    http://sellingprint.blogspot.com/2009/01/they-are-still-talking-at-newslessorg.html

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