Five very interesting, very different and very scary news items just crawled across the wire (or Google Reader - depending on how "with it" you are). Independently, they are worrying, when placed against one another, they create an even bigger question mark about the present and future of media and advertising.
- From The Wall Street Journal: New York Times Loss Widens as Ads Shrink. The gist of it: "The company, which publishes the Boston Globe as well as the New York Times, reported a 27% slide in advertising revenue and said it is exploring alternative business models for its Web site as the decline in print revenue outpaces efforts to slash expenses. Times Co. showed a loss of $74.5 million, or 52 cents a share, for the quarter."
- From MediaWeek: Does Print Drive Online Readership? The gist of it: "The Seattle Post-Intelligencer, which published its last edition on March 17, was knocked off the list of top 30 newspaper Web sites in March, according to the latest figures form Nielsen Online. Seattlepi.com fell to No. 32 with 1.4 million unique users, down 23 percent compared to March 2008. In February, the site was ahead of its then-joint operating agreement sister The Seattle Times. Seattlepi.com had 1.8 million uniques, while the Seattle Times had 1.5 million in February."
- From Reuters: Yahoo to cut 5 percent of jobs. The gist of it: "The Internet company said economic conditions remained challenging, as revenue from advertising on Yahoo websites and its partner websites declined during the first quarter... But the company appeared to be making progress controlling costs, offsetting the decline in revenues." Along with the additional news that first-quarter profits fell 78% compared with the same period last year.
- From BtoB: IDC predicts online advertising will decline 6% this year. The gist of it: "IDC's Ad Report Model predicts that U.S. online advertising will decline by as much as 9% in the first quarter and by 6% for full-year 2009. The report was issued following the release of first-quarter earnings by Yahoo on April 21."
- From AdWeek: Twitter Use Soars. The gist of it: "While there were approximately 6 million Twitter users in the U.S. in 2008 - or 3.8 percent of all Internet users - eMarketer estimates that number will jump to 18.1 million in 2010, representing 10.8 percent of Internet users."
Media, advertising and even the digital channels are all facing significant and real challenges. They're not just financial either (it's beyond the economy). The development of new and emerging business models is not keeping pace with the changes and the shifts in the advertising dollars.
If you followed the stories above, some of the most respected and trusted traditional news sources are struggling with issues of debt load (even though they like to blame the digitization of the news), while they push towards some new business models in the digital space. At the same time, some of those traditional mass media outlets that have shifted to digital-only platforms are not seeing the results that they had hoped for (granted, it's still early days). From there, the more established online portals that control a ton of traffic and advertising dollars online are struggling due to the economy (or, more specifically, because the marketers are seeing their ad budgets chopped) which is leading to an overall decline in online advertising (while it's still not as bad as some other channels, it is worrisome). Then, to top it all off, newer digital platforms (like Twitter) are seeing huge growth and usage spikes, but nothing really relevant in the form of monetization or revenue.
If this is a time of creative destruction (and it does feel that way), we're all going to have figure out what's going to get us out of this mess, and how we're going to define and validate these newer business models and advertising platforms - sooner rather than later.