The Media Landscape: What to Watch While I'm Away

Ad spending has seen its low. The print playing field will shrink. The mightiest won't fall. Expect a slow recovery

This will be my last column before I take several months off to travel and check out life and media in other corners of the globe. During my absence from these pages, of course, the world of media and marketing will stop revolving and remain utterly rooted in place waiting patiently for my return.


Many trendlines that will play out over the next several months are evident right now. Media companies foolish enough to have taken on massive debt to buy declining businesses between 2005 and 2007 will continue struggling to digest it, as radio giants Citadel Broadcasting and Clear Channel Communications are doing.

The economy will continue wheezing its way back into the "new normal" we keep hearing so much about. The brutality of the advertising market in the first half of this year—with its 15.4% drop in U.S. ad spending, per Nielsen, worse than many expected—will prove to be the market nadir, but its effects nonetheless will continue to ripple. What will the next several months bring?

The ongoing remaking of weaker media sectors. There will be fewer magazines. (This one likely will be owned by another company, but that's another story.) What happened to city newspapers—the gaggle winnowed down to one survivor—will start happening in 2010 at a regional level. Look for the strongest player to outlast weaker rivals in towns and small cities near one another.

Surprising stability among the biggest players. For all the ills ascribed to big multimedia conglomerates CBS (CBS), News Corp. (NWS), Time Warner (TWX), NBC Universal, Viacom (VIA), and Disney (DIS), for their slow-motion shifts and ill-timed investments, none are in as grim shape as the overly indebted and now bankrupt Tribune Co. Whatever results from this latest ad drought, the tallest trees won't be the ones that fall. But note that Disney, the company least dependent on ad dollars, and one that had recently avoided deals that the Street might wrinkle its nose at, pulled off the biggest and most interesting move of the year: a $4 billion acquisition of Marvel Entertainment. Expect the next big deal to come from Viacom—whose cable TV assets are among the least-bad traditional businesses going. Or from a soon-to-be-post-AOL Time Warner, assuming its CEO, Jeff Bewkes, isn't rendered gun-shy by the bad reaction to his overpriced purchase of social network Bebo in March 2008.

Which is closely related to how a bright line divides media haves from have-nots. You can find it by posing a simple question: Do you have something people will pay meaningful sums for? If you're in terrestrial radio, newspapers, or magazines, generally the answer is no. They're free online, or almost insultingly cheap to subscribe to. (There are some exceptions: The New York Times (NYT) and The Wall Street Journal—which also charges people to read articles online—are relatively pricey subscriptions, as are rare magazines such as The Economist or People).

If you have movies, data, theme parks, TV programming, or cable properties, the answer is yes. (Note here that virtually all of the biggest conglomerates do not have big print operations, save for News Corp. and Time Warner.) The players on the wrong side of this line are eager, if not desperate, to switch sides. This is why so many publishers are intrigued with two new startups—Journalism Online and ViewPass—that are pitching different means to charge users for online content. A year from now, we will know which players, if any, will be able to hop over this property line.

The sleeper deal to keep an eye on is Screenvision, the in-cinema ad firm currently being shopped. I've said it before, but this is one ad-supported business poised to grow even in this parched landscape: You have big screens, big speakers, a captive audience, and networks linking many screens together. Screenvision trails U.S. category leader National CineMedia (NCMI), but a new and motivated owner could heat up the space significantly.

See you in the springtime.

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