The lingering death of print media — newspapers, magazines and books — is a lesson to every business about coping with change. New markets and new media have fundamentally altered the industry - and if anyone thinks it’s the economic downturn that’s driving media companies to the wall, they’re missing valuable pointers to their own business survival.
True, this recession has claimed some high-profile companies in some pretty big industries. The British government has bailed out a succession of banks; global giants like Honda and Vauxhall have put workers on short time. But these industries face very specific problems related to economic contraction. And within five years, we’ll be back to buying cars and investing money. These sectors will bounce back.
For the print media industry, this recession is far more serious. It’s exposed and exacerbated a much longer-term decline. For many publications, five months looks an optimistic run, let alone five years.
Like so much about this downturn, the evidence is most obvious in the US. Just this week, the New York Times Company announced it would be closing the venerable Boston Globe, which is said to have lost $85m in the past year. It joins other large-scale regionals in the recycling bin, such as the Seattle Post Intelligencer and the San Francisco Chronicle.
The fact that Condé Nast’s indulgent and mistimed business magazine Portfolio closed down last week after just a couple of years on the news-stand surprised few people. But the real danger of losing one of the triumvirate of “classic” US business mags — Fortune, Forbes and BusinessWeek — shows how bad things have got.
The problem is high costs, falling readerships and plummeting ad revenues. They’re issues the UK print industry faces, too. Bizarrely, however, most publishers seem to have little idea about how to cope with the fact that the readers and the revenues have moved online. (Web ad spend in the UK exceeded that for newspaper in 2006.) Pre-recession, most titles were holding on. The fall in ad revenues across the world meant print media’s declining share got suddenly smaller in absolute terms, too.
In the US, the closure of print titles has sparked a Senate Committee Hearing. There’s talk of newspapers’ demise creating a democratic deficit.
All of which is whistling in the wind. If people don’t consume news and features in print, advertisers don’t need to buy space there. Online ads are more easily targeted than print ones and their effectiveness can be properly evaluated. Information wants to be free, but the media companies, editors and journalists are wedded to what is a fundamentally 19th century way of distibuting it. No wonder they’re in trouble.
So where are the lessons for other businesses? How can you tell whether your company is going through a recession-induced sticky patch, or if your whole industry is facing a major upheaval? And what can you do about it?
I’ll look at how the smarter minds in the print media are coping — and what their decisions tell us about the importance of innovating during a downturn — in my next post.
(Pic: wili_hybrid cc2.0)
