GANAHL ON MEDIA: Let Google Fix It

What’s a column on media without media predictions for the upcoming year? Right now everybody is in the prediction business. A Google search for ‘2010 media predictions’ resulted in over 9 million hits in just 0.22 seconds, really! And why be bashful, because who keeps score anyway? Twelve months from now, I’ll be lucky to find this column, much less measure its predictive value! So, here’s my 2010 media predictions.  

1. Make Google Fix It: Yes, you read it right…Make Google Fix It. This year has been abysmal in almost every way for almost every media. Earlier columns document a media industry suffering from its largest-ever advertising revenue decline, unimaginable industry job losses, and stunted collegiate career aspirations. The solution? Make Google Fix It.  

Certainly President Obama and his Treasury Secretary Timothy Geithner are no shrinking violets in the face of economic meltdowns. Look at their treatment of the automobile industry: forced dealership closures, forced bankruptcies, forced management changes, forced changes in union contracts: need I go on? 

Google is best positioned among the media titans for this type of operation: it’s profitable, it’s digital, it’s responsive and it has a corporate jet big enough to round up the industry’s limping moguls and dictate a solution.  

Wish I could be a fly on the wall when Eric, Sergey and Larry dress down Chicago’s Sam Zell, New York’s Aurthur Sulzberger and MySpace’s Rupert Murdoch!  

2. Apple and AP Launch iAP: a digital news app: This seems such a no brainer, I’m almost embarrassed to publish it under my byline! Steve Jobs, a.k.a. M3, or ‘micro-payment-music mogul’ redeemed Shawn Fanning's peer-to-peer music sharing model (yeah Boston’s Northeastern University!), pioneered a business model that distributes digital music files, and brought peace to the music industry’s many competing participants...all for 99 cents a song! Oh, and I almost forgot…iTunes controls almost 70% of the industry’s download business!  

AP, a non-profit news organization owned by its 1,500 daily newspaper members, argues it’s the world’s largest news organization with almost 5,000 journalists. It distributes worldwide multi-platform content through its global news bureaus network to 1,700 newspapers and over 5,000 radio and television stations. AP CEO Thomas Curley was weaned on legacy media having conducted the initial feasibility study for USA Today founder Al Neutharth.  

So what’s the hook? Easy…AP dominates global content creation, and Apple dominates global digital distribution. As an added bonus, Shawn Fanning gets the job as the joint venture’s VP of Technological Innovation!  

3. AP Bets Content Is King And Announces IPO: Nearly 170 years ago, The Associated Press launched as a cooperative news service that merged a network of daring overland riders, high-speed ponies, and telegraph wires to bring news about the Mexican War 700 miles to four New York City newspapers. Today, it boasts of the world’s largest newsroom with almost 5,000 journalists that distribute content across all platforms to 1,700 newspapers and more than 5,000 radio and television stations. 

Impressive enough, but its business model is threatened by the free digital distribution of content through Internet aggregators such as Google, AOL, Yahoo! and millions of other sites. In announcing its IPO, AP CEO Thomas Curley may say, “The market is stabilizing and the Street’s major investment houses seem poised to rebound. We are a content business, like Bloomberg News and The Wall Street Journal. This model works for them, and we think it will work for AP.” Be careful about holding this stock for the long haul. I rate it as a buy and a quick sell!  

4. While Content Is Free It’ll Be Harder To Find: The major content producers cling to, and whine about their outdated business model through 2010. As they watch revenues decline (or stagnate at best) they hide content from search engines or behind pay walls. Murdoch’s threat to with hold content from Google reported in Newsweek offers a hint of what will come. Don’t worry, Wikipedia gets in the daily news business and launches the Wiki Daily!  

5. Michelle Obama Premieres Talk Show On Oprah Channel: In 2010 Michelle grows weary of the ‘White House Mom’ dream. Inspired by Hillary Clinton’s life-after-the-White-House-Mom model, Michelle partners with Oprah on a cable talk show that goes head to head against ABC’s The View. The Clinton’s and the Obama’s battle to re-capture the White House! “If it worked for the Bush pop and son team, it will work for our husband and wife team,” Michelle may challenge.  

6. Comcast Partners With Philadelphia’s Tierney In Newspaper Venture: Still pumped from his NBC purchase, tri-athlete and Comcast CEO Michael Roberts grows weary and suspicious of the New York media elite (after all he’s a Philadelphia cheese steak kind of guy!). Enamored by media impresario and Philadelphia Inquirer publisher Brian Tierney’s plea to ‘keep it at home,’ Roberts buys 52% of the Inquirer. “After all, I love the PI’s sports section,” Roberts may claim.  

7. !!GABANG!! Challenges Social Media Giants: Fearing irrelevance, Bill Gates, Steve Ballmer and Jerry Yang launch !!GABANG!!, a social media site for angst-ridden Baby Boomers. “Hey we believe in this thing,” Ballmer may yell, “that’s why we have four…count them…four exclamation marks! Our names are riding on this!’ !!GABANG!! cleverly (!) uses two letters from each of the founder’s last name. It’s rumored Microsoft founder Paul Allen is composing !!GABANG!!’s musical jingle.  

8. Twitter, Facebook and YouTube Share Nobel Peace Prize: Sweden’s Nobel Foundation awarded this year’s Nobel Peace to Twitter, Facebook, and YouTube for their contributions to Iran’s regime change. The Nobel Foundation praised the social media sites for their work in mobilization and communication. “We’re sorry Mr. Mahmoud Ahmadinejad has cancelled his personal accounts with the sites,” a foundation spokesperson may explain, “but in the long run he’ll renew, he was an avid Twitterer!”  

9. Dreamers Rule and Innovation Rocks The Next Decade: Dream-driven young people have fueled this media revolution. Berners-Lee, Gates, Allen, Jobs, Wozniak, Case, Dell, Waitt, Andreesen, Bezos, Omidyar, Fanning, Brin, Page, Anderson, DeWolf, Zuckerberg, Hughes, Hurley, Chen, Karim and thousands of others rocked our status quo. Armed with, and bound by nothing these dreamers changed our world. The Next Decade belongs to them and those like them. Dreamers Rule!

Photo Credits: Official White House Portrait of Michelle Obama; Bill Gates and Paul Allen by
Doug Wilson/Corbis

GANAHL ON MEDIA: State of News Media

OK, I admit it: I’m an addict…a stat-addict. To be sure, I’m not alone, there are many stat-addicts: sport-stats, market-stats, caloric-stats, you name it. Me, I’m a media-stat addict, and I can’t get enough stats about circulation, advertising or site traffic. Lucky for me I found the mother lode of all media stats, the Pew Research Center’s The State of the News Media: An Annual Report on American Journalism. The series of reports are the work of the center’s Project for Excellence in Journalism (PEJ).

The 2009 report is the 6th in a 6-year series beginning in 2003. It analyzes 9 major media sectors across 5 areas: audience, economics, newsroom investment, ownership and digital journalism. Its analysis is based on ‘aggregating as much publicly available data as possible,” and PEJ’s own extensive content analyses. At 180,000 words, or 700 plus printed pages, and dozens of charts it is mammoth. Go figure: that’s over one million words during the 6-year project! The online edition allows us true stat-addicts to sift the data and create our own multi-variable charts. Cool, huh?

So…what is the ‘state of the news media?’ PEJ concludes that the 6th annual report “is also the bleakest.” While equal numbers of news seekers still seem to value the practices and values of traditional journalism, they are increasingly abandoning legacy media as sources of traditional news, and migrating to ‘on demand,’ online platforms. These online platforms deliver news when audiences want it, in formats they want. These formats include wi-fi, mobile, social networking sites, blogs, video, microblogs, RSS and e-mails. News audiences now “hunt and gather what they want when they want it.” Additionally, many of these news seekers then share, or repurpose the content through the very same platforms they initially hunted.

Thus, the crisis is less about audience size, and more about audience migration, and the resulting shifts in platform revenue from legacy media to online media. The gains in online platform revenue are nowhere equal to the losses in legacy media revenue. PEJ describes it is as the “decoupling …of advertising from news.” Add to this today’s economic collapse, which has “at least doubled the revenue losses”, caused by the migration of audiences from legacy media and you start to appreciate the depth of the crisis.

So what are the media habits of these online news hunters and gatherers that are precipitating such change? PEJ concludes that while those that use the Internet has remained relatively constant for the last several years at 70% to 75% of the country’s population, they increasingly ‘hunt and gather’ for news more frequently and for longer periods of time.

Nielsen's ranking of the top 10 news sites

Moreover, online platforms seem to be more popular sources of news when compared to most traditional news sources. According to a Pew Research Center survey (August 2008) 37% of the total Internet users go online for news at least 3 times a week, compared to the 29% that watch network nightly news and the 22% that watch network morning shows. Another PRC survey (December 2008) found 40% relied on online sources for national and international news compared to 35% that relied on newspapers. Where do they seek their online news? PEJ reports the top 5 most popular news sites in 2008 according to Nielsen Online are MSNBC, Yahoo! News, CNN, AOL News and The New York Times.

As to the future of legacy media, PEJ concludes, “There are growing doubts…about whether the generation in charge has the vision and boldness to reinvent the industry.” I agree. The skills necessary for traditional journalism don’t readily translate into online entrepreneurship. The future of legacy media is tied to their ability to forge increased collaborations with innovative online partners. And that…means more excitement for us stat addicts! Stay tuned.

GANAHL ON MEDIA: How Dire Is It?

Today more people rely on the Internet than newspapers for national and international news. For those involved in traditional media, the question of the moment is survival. How threatened are traditional media? How deep is this crisis, and when will it get better?

In a word…the crisis is dire. Hopefully it will get better, but this may take a very long time.

Consider total reported advertising revenues for the first half of 2009. Advertising Age reports that overall ad revenues measured by Nielsen are down almost 16% during the first 6 months 0f 2009 when compared with the same period in 2008.

The only two media categories among the 19 measured categories reporting increases during the first half of 2009 are Cable TV with a 1.5% increase and Spanish Language Cable TV with a 0.6% increase. Internet ad spending is down 1% during this period. Please see the table titled Year-to-Year Change in Ad Spend, by Media published September 2, 2009 in Advertising Age.

The media most impacted by this crisis are newspapers. Richard Pe’rez-Pena reports in The New York Times that newspaper revenues fell almost 29% during the first half of 2009 according to the Newspaper Association of America. Also, the NAA reports that the current rate of decline in newspaper ad revenues is accelerating from the 2007 decline of 16.7%, and the 2006 decline 7.9%.

More over, the current precipitous decline represents long-term erosion in newspaper ad revenues. Ryan Chittum concludes in the Columbia Journalism Review that “(the 2009 decline) understates just how awful the numbers are…You have to go back to 1965 to find a year with revenue lower in 2009 dollars than what this year is projected to be.” Do the math…newspapers are an industry with revenues little improved for almost 45 years ago!

Declines in newspaper circulation mirror its revenue declines. The NAA reports paid circulation for daily newspapers totals 48.497 million in 2008. This translates to a 41.8% penetration level of the total 116 million US households in 2008. The last time paid circulation for daily newspapers totaled 48 million was in 1945! Paid circulation for daily newspapers peaked at 63.34 million in 1984.

There are several websites devoted to chronicling newspapers’ traumas. One of the most interesting is Paul Gillin’s Newspaper Death Watch. The NDW tracks those forces that Gillin thinks will “ultimately destroy 95% of American major metropolitan newspapers.” These forces include newspapers’ high fixed costs such as equipment, paper and labor.

Gillin calls himself an optimist and thinks “this painful decline will give birth to a new model of journalism built upon aggregation and reader-generated content." His site lists 12 metropolitan dailies including the Rocky Mountain News and the Baltimore Sun that have closed since the site’s beginning in March 2007. It also lists 8 dailies including the Seattle Post-Intelligencer and the Ann Arbor News that have ‘adopted hybrid online/print or online-only models.’

Another site, paper cuts uses mapping software to depict ‘layoffs and buyouts at U.S. newspapers.’ St. Louis designer, journalist and site creator Erica Smith reports almost 32,000 newspaper jobs have been lost, and 31 daily and weekly newspapers have closed since June 2007. The site also reports salary and benefit reductions at various newspapers.

Of course other media are also severely impacted. Jason Fells reports in FOLIO that according to the Publishers Information Bureau consumer magazine ad pages fell almost 30% in the 2nd quarter of 2009 compared to the same 2008 time period. This compares to the 11.7% ad page decrease in 2008 when compared to 2007.

And, what about media’s future? How guarded are the predictions? Pe’rez-Pena reports in the NYT that while the rate of decline in advertising revenue seems to be slowing, many analysts think it will be 2010 before we see any substantial improvement.