By paulgillin | March 24, 2009 - 7:49 am - Posted in Business News, BusinessModel, NewMedia, Newspapers

If you want an excellent summary of how bad it is in medialand, read Bob Garfield’s excellent overview on Advertising Age before it goes behind the subscription wall (If you’re too late, click here). The sky is falling, folks, and it’s not just for newspapers.

chaos_scenarioGarfield is the author of the forthcoming book, Chaos Scenario (right), and he’s obviously been doing his homework. Some stats from the story:

  • In 2008, magazine newsstand sales fell 12%. They’ve dropped another 22% this year off of that awful base.
  • TV Guide, the erstwhile 17 million-circulation goldmine, was sold in October to OpenGate Capital for $1, or $2 less than a copy at the supermarket checkout.
  • “Bernstein Research predicts a 20% to 30% drop in 2009 TV station ad revenue.”
  • “For the last reporting period, Nielsen Media Research said, CBS’s prime-time audience was down 2.9%, ABC’s down 9.7%, Fox down 17.5% and NBC down 14.3%.”
  • “According to Media Dynamics, the average price of reaching 1,000 households with a 30-second spot in prime time, has jumped from $8.28 in 1986 to $22.65 in 2008 — but effectively more like $32, because between 150 and 200 of those 1000 households use DVRs to skip past the ads.”
  • NBC Universal CEO Jeff Zucker recently admitted that he’s considering making NBC a cable channel. A CBS executive said much the same thing.

And why is this all happening? Quoting again:

“Today the average 14-year-old can create a global television network with applications that are built into her laptop…you have the ability to create virtually unlimited supply against what has been historically relatively stable demand.”

Economic Shift

And that’s the problem. Also the opportunity. The ad-supported revenue model presumed that advertising space was limited, but today it’s abundant and growing faster than the supply of people to consume it.

If your business is to sell expensive advertising on the theory that you control a narrow channel to the consumer, and then your business is being vaporized by information abundance.  This is the problem for mainstream media in general and it is the one that demands the most creative solutions.

Garfield quotes Philadelphia Newspapers LLC’s Brian Tierney ruing the failure of the free Internet model: “If you build it, they will come — I don’t think is working for media like ours. … I think we’re going to have to start to find a way to charge for it and not just rely on advertising.”

Advertising was a great business for many years when media was scarce and power was concentrated.  The mass democratization of media is sinking all businesses that rely upon that inefficiency.  The solution is not to continue doing more of what we’ve been doing but to deconstruct the centralized media model into something that looks more like the shape of this much flatter market.  The goal should not be to preserve newspapers or television networks or magazines or whatever.  It should be to preserve and enhance the quality of what they have long provided while finding a sustainable business model.

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This entry was posted on Tuesday, March 24th, 2009 at 7:49 am and is filed under Business News, BusinessModel, NewMedia, Newspapers. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

7 Comments

  1. March 24, 2009 @ 10:51 am



    “Advertising was a great business for many years when media was scarce and power was concentrated.”

    No its was an EXPENSIVE inefffective business that created huge wealth and power for some and not much else, from W. R. Hearst to W. Gates (who made his money on unconnected, separate machines.)

    But we all had NO choice…

    The advertisers hated paying out all of that money for the returns they actually got.

    The readership/audience gated the constant interruptions, but used it to go to the bathroom.

    The publishers/broadcasters hated having to interrupt the constant flow of income with content that they had to pay for.

    Now we do have a choice.

    An experiment in scalable packetized communications by the US military in the ‘fifties has led to the separation of the medium from the message, and the entire uneconomical economy of “doing it the old way” is all in a tizzy.

    Claude Shannon, Bolt Beranek and Newman, Sir Timothy John Berners-Lee, and Marc Andreessen happened along and destroyed the old telephone exchanges with their point-to-point routing. and the rest is history.

    Might as well lament the passing of the rotary electr0-mechanical switch.

    We have to find a new better, cheaper, more focused way of doing our work.

    We create messages, content, and between the WWWeb, Google and the unfortunate propensity to give it away for free, we have to find a way to withhold some of it so we can get paid.

    The post offices are international organizations which we subsidize to deliver our messages, (mostly consisting of a dwindling amount of junk mail, which paid for the remaining bills and bad news.)

    But they’re suffering from the same internet effect of messages being free (as in “libre”,) to be digitized, packetized and delivered over some fixed-cost infrastructure (wired or wireless.)

    By partnering with the post offices to deliver our messages electronically over the net via RSS for money and to pay US as well, we can make this a mutually beneficial arrangement.

    Posted by msbpodcast
  2. March 24, 2009 @ 11:45 am



    I reread the comment by “NBC Universal CEO Jeff Zucker recently admitted that he’s considering making NBC a cable channel. A CBS executive said much the same thing.”

    It figures.

    I knew in my heart of hearts that terrestrial TV wouldn’t survive the switch to digital.

    But the death blow is coming from the broadcasters, who see much better opportunities in a world without the need for an FCC.

    Posted by msbpodcast
  3. March 24, 2009 @ 11:51 am



    As bad as print advertising might be, at least it’s there for a while in a newspaper. For the life of me, I can’t understand why any business would buy ads on TV and, even worse, radio. When I commercial hits the radio, I instantly switch stations. For TV, same thing, or fast-forward through them on tape or DVR. Who is actually listening to radio commercials? The biggest waste of money I see.

    Posted by Newspaper Fan
  4. March 24, 2009 @ 1:34 pm



    I don’t see any use for newspaper and magazine ads either “Newspaper Fan.”

    They’re even easier to skip over in a newspaper or magazine by just hopping your attention over the ads on a page and not even seeing them.

    At least, you have to actively option them out of the media. (There is nothing dumber that sitting through any ad the third time.)

    Television ads don’t need to be watched to be effective after seeing them the first time.

    Posted by msbpodcast
  5. March 25, 2009 @ 10:35 am



    […] Media Apocalypse Foretold, NewspaperDeathWatch […]

  6. March 25, 2009 @ 1:11 pm



    […] you, then look at the data points which Bob Garfield illustrates in his recent byline for AdAge (Via Paul Gillin at Newspaper Deathwatch) as part of his research of the media landscape for his forthcoming book – The Chaos […]

  7. June 25, 2009 @ 4:58 am



    […] against what has been historically relatively stable demand.” […] Read the whole article at newspaperdeathwatch.com Comments (1) Leave a […]