More bad news for traditional media...but no surprise

 
by Don Keith

It's no surprise...and especially to regular followers of this blog...that the revenue news from traditional media continues to decline in the face of rapid technological change. That change, of course, has radically affected how people consume media and how advertisers attempt to get their messages in front of those consumers.

Here's a recent blurb from MediaPost, which follows buying and selling of advertising, concerning yet another dip in the New York Times Company's revenue for the most recent quarter:

It’s worth noting that [circulation] revenues now make up 59.7% of NYTCO’s total, up from 41.3% in the third quarter of 2010. The proportion derived from advertising has fallen from 51.8% to 34.3% over the same period.

Share of print media income from circulation has not been so high in, I'd guess, decades. Advertising was the primary generator of revenue by far. And classified ads were a huge portion of that. Have you who still read newspapers noticed the size of your classified section? Were it not for legal ads, mandated by governmental entities, most newspapers' "want ads" would be a page or two on a good day. And note that this change in percentage of revenue does NOT mean people are paying more to subscribe. It means advertising revenue is dropping like an anvil.

But let's not just pick on the doomed newspaper biz. An interesting observation from research guru and blogger Mark Ramsey:

In TV, meanwhile, it’s well established that everything you see on your cable box (assuming you use a cable box) is being paid carriage fees by the cable operator. In other words, that’s not ad revenue, it’s subscription revenue, and you are paying for it directly through the middleman of Time Warner or DirecTV or U-Verse or Cox.

In 2015, for example, Disney’s media networks derived 51% of their overall revenue from affiliate fees (a.k.a., you and me) and only 37% from advertising.

And that begs the question: How do traditional radio and TV charge customers for content as their revenue from ads goes down, down, down?

Yes, TV gets some money from cable systems and satellite companies in return for their signals being re-broadcast. But it will soon not be enough to off-set ad revenue declines. That and the time will come when cable and sats will be more than willing to drop local signals--where legal--when TV stations ask too much for carriage fees. You see the threats all the time now.

Radio? Assuming there was a way to charge listeners for the pleasure of getting "Rock 107, the Best of the '80s, '90s, Double Zeroes and Today!" how much would you be willing to cough up?  None, you say?  "I can get music streamed to me anytime anywhere, usually without commercials...even in my car and for free!"

That means traditional media will have to come up with other ways to make money off their brands besides ads in newspapers in driveways or commercials interrupting "We begin 13 Action Team News at 7 with breaking news, but first this word from the legal firm of..."

Web sites? It's been a struggle so far. But radio's and TV's survival depends on creative thinking and content worth seeking out. Content that is even worth paying for.

Sorry but I'm not optimistic.