May 09
18
Why Old Media Is Dying
The statistics tell a different story. But they also show that there is a trend toward newer media:
- Blogs are now used by 24% of Internet users, up from 13% in 2006
- Social networks are now used by 26% of Internet users, up from 17% in 2006
- Videocasts are now used by 11% of Internet users, up from 6% in 2006
Slower growers include:
- RSS feeds: growing from 5 to 7 percent
- Podcasts: growing from 5 to 7 percent
- Business news sites: flat at 8 percent
They say that old media (TV, anyway) is alive and well and still has the highest numbers of users. Well, that isn't surprising, frankly. Let's face it, it has a lot of momentum, some great shows along with the crap, and there is also something really pleasant about having a lean back experience where you don't have to engage with a keyboard to get anything meaningful out of a box with a screen.
However, what the numbers don't tell you are the really interesting numbers – the debt being carried by the corporations that control TV – and other forms of media too.
In Australia the significant media brands: Channels Nine and Ten and Fairfax are all carrying mountains of debt. In some cases, such as Network Ten, the parent (Can West) is trying to sell the asset. The wolves would have already pounced if it wasn't for the dire condition of the markets and the general feeling that media is going to do worse before it does better.
And the thing that we tend to forget when consuming these household brands day after day and night after night, is that they are rushing headlong toward a precipice: The cost of content acquisition continues to rise – regardless of whether the shows that are purchased come from Hollywood or are reality shows from Endemol – the costs keep going up for the good ones. Meanwhile advertisers are sharpening their pencils because they are seeing consumer spending collapsing and when you do your advertising budget you need to be considering what percentage of gross margin you are going to give up to get your product in front of the customer. That kind of leads people to think about Google and how to leverage the growth of the other screens.
So looking forward a couple of years, you have to think that for TV to survive, which I also believe will happen, it will have to be a substantially different kind of beast – just as newspapers will have to change too…
Some people, like Rupert Murdoch, believe that you can charge people for every page they view. Maybe he is right. I tend to think that the model is going to be a bit more complex than that. I think that what is going to happen is that the pendulum will swing back away from globalism and will see us becoming ultra local in our thinking about many things. I believe we are going to see a rise in nationalism, and in a lot of other isms too – and some of them wont be good….
But old media: it may not be dead yet, but it certainly on life support.