I am always looking for a silver lining. To a fault, some say. And I’ll confess, it’s been hard to find anything “good” about the current economic conditions and the widespread carnage in the media industry. Revenues are down for virtually every company, print or electronic–and layoffs continue (The New York Times announced last week that one hundred more people will lose their jobs at the Gray Lady this quarter. Similar stories are coming from Conde Nast and Time Inc and most broadcasters.)
But here’s the silver lining: The Great Recession accelerated and intensified a secular problem in our industry and it’s forcing everyone to face up to it and, at least, try to address it. That secular problem is fragmentation and the related irritant of over-reliance on advertising revenue. Or–to put it another way–over-relying on the free-to-the-user, sponsored content business model.
Audiences for traditional media outlets have been declining for years. And there has been an ominous churn on Madison Avenue for some time too. But really, it was easier to “go with the flow” and keep floating down the river of Inertia than to sit up and really address the challenges at hand, so little or nothing was done to deal with the impending iceberg.
But now, the shriveled economy is putting a huge dent in ad dollars invested, which has accelerated the secular downturn and forced all of us to come to grips with the effects of fragmentation. And with the growing awareness of a “new normal” media execs realize they have to take action or they’ll wake up bankrupt and empty-handed. Hence, Fox says Hulu will start charging users in 2010; the WSJ continues to expand its product lines of paid subscriptions; Newsday announces that it will charge non-cable/non-print subscribers a few to read its news on line; Comcast says it will debut cable shows online this quarter for Comcast cable customers only; and the former executive editor of The Washington Post says the government should now subsidize journalism because free enterprise business models cannot.
Thanks for the push–we needed it.
Erik Sorenson is chief executive officer of Vault.com, Inc. He oversees the strategic direction of the global, New York-based media company, including ShopTalk & TVSPY. If you would like to comment on Remote Control, or want to reach Erik, email remotecontrol@tvspy.