It’s Getting (Really) Ugly Out There

picture-31I’m hopeful that a new administration taking some dramatic action can accelerate the development of a recovery, because it’s getting really ugly out there. Consider the following:

Yellow pages:

Idearc was delisted and RHD faces the same fate potentially. YP print revenues are off in ways that may make that Borrell prediction of a $5 billion industry loss over five years a potential reality. I hope not.


The US’s largest newspaper, Gannett, announced a significant set of layoffs — though nothing like the financial industry. And E&P runs a piece on a Fitch Ratings report that argues several newspapers will default next year and simply go out of business, leaving some US cities with no local daily print publication. Going online only like the Christian Science Monitor can’t generate enough revenue to support a full newsroom.


We’ve seen several US magazine failures or closings recently, with many more to come as consumers cut back on subscriptions according to a Forrester survey reported by MediaWeek:

With heavier readers, the planned cuts go deeper. Among those subscribing to three or four titles, 22 percent plan some cancellations; and of those getting five or more subscriptions, 24 percent plan to scale back.

Newspapers and work-related magazines are less vulnerable to the downturn, according to the survey. Among newspaper subscribers (58 percent of those surveyed), 88 percent said they planned no change in their subscriptions in the coming year, while 10 percent said they planned to cut back. Two percent planned an increase.

Radio: BIA (buyer of the Kelsey Group) predicts negative growth and continuing losses for the industry.

Local TV is under severe pressure as well.

General weakness in the ad market, fragmentation of audiences or dramatic erosion in audiences (in some cases) and consumer spending retrenchment are all conspiring to put unprecedented pressure on almost all media.


6 Responses to “It’s Getting (Really) Ugly Out There”

  1. Phil Geraghty Says:

    Doom and Gloom indeed! any indication of how IYP are doing in this climate compared with their offline cousins?

  2. Greg Says:

    Well . . . they’re doing okay and deliver value and leads to their advertisers but they’re not generating tons of revenue for their traditional publisher operators on a relative basis. They come in around 8% (if my memory serves me) of total revenues now on average.

    It’s about what the online versions of newspapers are contributing to the bottom line in the US.

  3. David Mihm Says:

    I’ve been reading a lot of Tom Friedman and David Brooks recently. Both highlight Schumpeter’s principle of creative destruction as one of the keys to a strong economy in the capitalist era — namely. businesses with bad business models fail and businesses with better models rise.

    If local news and print papers fail and “leave some US cities with no local daily print publication,” there will be plenty of independent bloggers, podcasters, and videographers (probably including many former employees of these publications) stepping up into the void. They may not be able to command the same kind of advertising price point but they’re not going to have anywhere near the overhead, either.

    A “media network” that wants to succeed is going to have to take these kinds of neo-journalists into account to be successful. The ones who stick with the current model are going to be SOL.

    Just my .02.

  4. Greg Sterling Says:

    Agree in general; but capitalism is not foolproof or even entirely rational.

  5. David Mihm Says:

    I wasn’t making the argument that it was either foolproof OR rational. Merely saying that it is the system that has evolved, and the system we are stuck with. If we as a country do not let our bad businesses fail, we risk losing ground to more innovative companies abroad whose governments are funneling money to new industries rather than old.

    Sorry, all the bailout discussion has just riled me up to my boiling point where I felt like I had to rant. I know you weren’t necessarily suggesting we bail these companies out; you were merely stating facts–and facts largely based on a real, not theoretical, decrease in consumer (and B2B) spending. 🙂

  6. Greg Sterling Says:

    I’m having the same trouble with the auto industry bailout. These guys were greedy and made bad choices.

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